Thursday, 8 December 2016

The Transports follows

US equity indexes closed broadly higher, sp +29pts @ 2241. The two leaders - Trans/R2K, settled higher by 2.5% and 0.9% respectively. VIX settled +3.6% @ 12.22. The market is due a retrace, but for now... with new historic highs being regularly achieved, there is little sign of it.


sp'daily5



VIX'daily3



Summary

Well, today was particularly bizarre. The market opened with very minor mixed chop, a touch of weakness to sp'2208, but then grinding higher, and accelerating into the afternoon.

We saw a quartet of new historic highs: dow, sp, R2K, and most notable... Transports.

VIX naturally broke a new cycle low of 11.33, the lowest level since August. However, there was a distinct divergence to equities, with the VIX closing in the 12s. The 14s are within range before the weekend, with 15/16s more viable early next week.

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Transports, monthly


With a new historic high of 9383, it was a particularly strong day for the 'old leader'. Its notable the upper bollinger is still around 9000, and its difficult to see the tranny keep on pushing in the near term. In any case... 10k seems a given into spring 2017.

Goodnight from London

Wednesday, 7 December 2016

Where are the 2138 people?

US equity indexes closed broadly higher, sp +7pts @ 2212. The two leaders - Trans/R2K, settled higher by 0.6% and 1.1% respectively. VIX settled -2.9% @ 11.79. Near term outlook threatens some cooling to the 50dma, which will soon be in the 2160s. Broadly though, the market looks strong, with a year end close somewhere around 2230.


sp'daily5



VIX'daily3



Summary

Suffice to add, a day of moderate chop, leaning on the upside. Most notable, a new historic high for the second market leader - R2K, of 1353.

With the market mostly trading choppy, the VIX was further ground lower, breaking into the 11s, the lowest level since early Sept'.

On balance, a move to test the 50dma in the 2160s still seems probable, but that will now only likely equate to VIX 15/16s. Even the 17s look a stretch ahead of the fed raising rates.
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I'll end tonight with a question...

Where are the people who were touting the importance of the Fibonacci extrapolation number of sp'2138?

Remember how for MANY years - some as early as late 2009, highlighted the fact that if you extrapolate from the 2007 high to the 2009 low.... the 1.618x fib' gave 2138.

sp'monthly5b - fib numbers


Last year saw the market get decisively stuck, with a May 2015 high of sp'2134. Clearly, it was reflective and evidence that 2138 WAS important. We saw two sig' down waves, the first in Aug', and then another in Jan/early Feb'.
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This past July saw the May 2015 high decisively broken.

At that time I did note that the next number of importance was around sp'3K...  3047.34 to be precise.

Where are those same people who touted 2138 for years? Why aren't they now highlighting sp'3K as the next natural target ?

Similarly, for the Dow...

Dow, monthly3 - fib numbers


Its partly why this past weekend I noted there is a viable upside target of 25/26k by late 2017/early 2018.

Anyway... its something to reflect on, and I sure don't see anyone else highlighting this.

Goodnight from London

Tuesday, 6 December 2016

New week, new historic high

US equity indexes closed broadly higher, sp +12pts @ 2204 (intra high 2209). The two leaders - Trans/R2K, settled higher by 0.4% and 1.8% respectively. VIX settled -14.0% @ 12.14. Near term outlook offers high threat of a retrace to the 50dma in the sp'2160s. Broadly though, the market is super strong, as reflected with today's new historic Dow high.


sp'daily5



VIX'daily3



Summary

Despite the resignation of Italian PM Renzi, the US market managed to reverse overnight declines, and open moderately higher.

Indeed, with the uncertainty of the Italian and Austrian votes out of the way, the VIX was crushed back to the low 12s.

For now, it still seems highly probable that the market will see some cooling to the 50dma in the sp'2160s.. which should (in theory), equate to VIX 16/17s. The key 20 threshold looks out of range for the remainder of the year.
 

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Dow, monthly2


A new historic high of 19274, as the Dow is almost 1000pts above the key 10MA. The upper monthly bollinger around 19300 will keep the market pinned below 20k into year end. However, does anyone seriously think we're not going to see the giant psy' level of 20k hit early next year?

Goodnight from London