Tuesday, 25 April 2017

Key breaks in Germany and France

US equity indexes closed significantly higher, sp +25pts at 2374. The two leaders - Trans/R2K, settled higher by 1.6% and 1.3% respectively. VIX settled -25.9% at 10.84. Near term outlook offers a few days of consolidation chop, but as things are, US equities are now set for net monthly gains.


spdaily5



VIX'daily3



Summary

With the market believing that 'President Macron' is a sure thing (Sun' May 7th), most world markets jumped significantly higher. Today saw the sp'500 approach big resistance of 2380/90. Regardless of any near term consolidation/chop, it does look like we'll see most indexes settle net higher for April.

With the election uncertainty out of the way, volatility collapsed, with a somewhat incredible daily close in the VIX 10s. Does anyone really think the key 20 threshold is viable any time soon?
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Germany and France soar

I recognise some (perhaps many) of you don't much care, but the implications for other markets - including the US are undeniable.

The German DAX broke a new historic high today, the door is now open to 14/15k.


The French market naturally saw the most powerful of gains... breaking the 2015 high.


A push to the 6000s is now on the menu, whether by year end or early 2018, it really makes no difference.

Goodnight from London
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Saturday, 22 April 2017

Weekend update - US weekly indexes

It was a bullish week for US equity indexes, with net weekly gains ranging from 2.9% (Trans), 1.8% (Nasdaq comp'), to 0.5% (Dow). Near term outlook offers chop into end month, with a more viable break to new historic highs in the sp'2400s, after the French election is out of the way.


Lets take our regular look at six of the main US indexes

sp'500


Despite some moderate Friday weakness, the sp' managed a net weekly gain of 19pts (0.8%), to 2348 - just over 2% below the March 1st historic high of 2400. Underlying MACD (blue bar histogram) ticked lower for a seventh consecutive week. The key 10MA remains short term resistance around 2359.

Its notable that core rising support in early May will be around 2260, and will rise to 2300 in early June.

Best guess: an attempt to clear resistance of 2380/90 (but failing) into end April. A break into the 2400s appears far more viable after round two of the French election (May 7th). A June rate hike would help inspire upside to the sp'2425/50 zone. The 2500s look a stretch before Aug/Sept. The year end target of 2683 remains on track.

Equity bears have nothing to tout unless a break of rising trend, and arguably (at minimum) a hit of the lower weekly bollinger, which is currently at 2225, and rising.
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Nasdaq comp'


The tech settled net higher by a rather significant 1.8% to 5910. Indeed, the Nasdaq was just 10pts shy of breaking a new historic high. Upper weekly bollinger is offering the 6060s, the 6100s appear a valid target for May/June.


Dow


The mighty Dow was the laggard this week, managing a gain of just 0.5% to 20547. Things will turn short term bullish with a break >20800. A push to the 21250/500 zone appears viable by late June. First big support is the 20k threshold, and this will intersect rising support in early June. The Oct'2016 low of 17883 looks an awful long way down.


NYSE comp'


The master index settled net higher by 0.6% to 11389. Price structure since late Feb' is arguably just a big bull flag. Bulls need a break above 11500 to provisionally confirm. Things only turn bearish with a break below rising trend, which in mid June will be around 11400.


R2K


The second market leader - R2K, had a very bullish week, settling +2.6% at 1379. There was a fractional break of short term declining trend. Things turn decisively more bullish with a break >1400, and then the recent historic high of 1414. Its notable that the upper and lower bollingers are now very tight. A big move is probable. Cyclically, the R2K is on the very low side, and another up wave is likely to begin.


Trans


The 'old leader' - Trans, is leading the way back upward, with a powerful net gain of 259pts (2.9%) to 9133. A break above the weekly 10MA in the 9200s next week would be rather bullish, and offer a run toward the upper bollinger in the 9500s. A grander move to 10k is on the menu... so long as the fed raise rates this June/July. Things only turn bearish if the March low of 8798 is taken out. Even then, that is still a long way above the Oct'2016 low of 7885.
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Summary

All US equity indexes remain near historic highs.

The Nasdaq remains the strongest index, with the Transports still trailing.

The mid term upward trend from early 2016 remains intact.
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Looking ahead

Round one of the French Presidential election is Sun' April 23rd. The result should be known before the US market opens on Monday. A 'definitive winner' is extremely unlikely, and instead, a second round for the leading two candidates will be held Sun' May 7'th.

Depending on the final pairing, its quite possible the market will be able to fathom who will become President. So... the Monday open could be rather dynamic.

M -
T - Case-Shiller HPI, New home sales, consumer con', Richmond Fed'
W - EIA Pet' report
T - weekly jobs, durable goods orders, intl' trade, pending home sales, EIA Nat' gas
F - Q1 GDP (first estimate), employment cost, Chicago PMI, consumer sent'

*Market consensus is expecting Q1 growth of 1.1%, which is indeed weak, but that has typically been the case for the first quarter.

**there are just three fed officials scheduled. Neither of the trio are likely important, and it remains clear there will be no policy change at the next FOMC of May 3rd.
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Have a good weekend
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*the next post on this page will likely appear Monday at 7pm EST.

Chop into the weekend

US equity indexes closed moderately mixed, sp -7pts at 2348. The two leaders - Trans/R2K, settled +0.1% and -0.3% respectively. VIX settled +3.4% at 14.63. Near term outlook is uncertain, and will be highly dependent on round one of the French elections this Sunday. Regardless of any near term geo-political scares, another big push to new historic highs remains due.


sp'daily5



VIX'daily3



Summary

It was a rather natural opex, with the market makers almost managing an optimal close around sp'2350/ SPY 235.00.

Volatility did lean a little higher, which is not surprising with the French election this Sunday. The key 20 threshold still looks out of range though, even if Le Pen is one of the top two candidates.

Goodnight from London
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*the weekend post will appear Sat' 12pm EST, and will detail the US weekly indexes