Tuesday, 19 September 2017

Awaiting the Fed

US equity indexes closed fractionally mixed, sp +2pts at 2506. The two leaders - Trans/R2K, both settled -0.1%. VIX settled +0.3% at 10.18. Near term outlook offers a key turn, once the Fed are out of the way. A 4-5% main market correction to the 200dma remains on the menu.


sp'daily5



VIX'daily3



Summary

US equities opened fractionally higher, notably breaking two new historic highs for the Dow and NYSE comp'. With equities still leaning upward, market volatility remained very subdued, with the VIX again dropping into the 9s, but managing to settle fractionally higher in the low 10s.


As for the fed tomorrow...

I sure don't expect a rate hike, and neither does the mainstream. The only uncertainty is whether QT will be announced to begin. The plan was issued some months ago of course, and even if the Fed starts selling T-bonds and MBS back to the market, the amounts are insignificant, at least to begin with.

What will be interesting tomorrow afternoon is the Yellen press conference at 2.30pm. Even if the market initially spikes higher on 'omg, QT has begun!' hysteria, I would see the market at high threat of a sig' reversal, not least with each question that Yellen responds to.
--

Quartet of doom: Quakes, terrorism, hurricanes, and fire

--

A peaceful end to the day

--
Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to me.


For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html


Monday, 18 September 2017

Another quartet of highs

US equity indexes closed moderately mixed, sp +3pts at 2503 (intra high 2508) . The two leaders - Trans/R2K, settled -0.3% and +0.6% respectively. VIX settled -0.2% at 10.15. Near term outlook offers chop into the FOMC announcement this Wednesday afternoon. More broadly, a 4-5% down wave is still on the menu.


sp'daily5



VIX'daily3



Summary

US equities opened just a little higher, but it was enough to generate another quartet of index highs in the sp', dow, nyse comp', and the nasdaq comp'. Overall price action is pretty subdued though, and there is little reason to expect any drama between now and Wednesday 1.59pm.

The VIX opened fractionally higher, but almost immediately cooled into the 9s, last seen Aug'8th. A burst to the low teens seems very viable in the latter half of this week. The key 20 threshold is likely out of range until we're in the more 'dubious' month of October.
--

No sun for the equity bears

--
Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to me.


For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html

Saturday, 16 September 2017

Weekend update - US weekly indexes

It was a bullish week for US equity indexes, with net weekly gains ranging from 2.3% (R2K), 1.6% (sp'500, NYSE comp'), to 1.4% (Nasdaq comp'). Near term outlook offers minor chop into the FOMC. A cooling wave of 4-5% into early October is probable. Broadly though, the end year target of sp'2683 remains on track.


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

sp'500


The sp' settled higher for the third week of the past four, +38pts (1.6%) to a new historic high of 2500.23. Underlying MACD (blue bar histogram) cycle ticked up, and will be close to the key zero threshold next week, ahead of the FOMC. Seasonally, the setup favours a swing lower, and a failure to keep pushing upward from the zero threshold would be especially bearish.

Best guess: minor chop ahead of the FOMC, then a sig' swing lower, stretching into early October. A 5% down wave would see the 200dma tested (currently 2375). Considering 'everything', the market should see a swing back upward into end Oct', avoiding a bearish monthly close. The year end target of 2683 looks a stretch, but its still just about possible.

Equity bears have little to tout unless a sustained break <2400, with some daily closes under the 200dma. For a bearish monthly Sept'29 close, the bears need <2380, and that rises to around 2400 for Oct'31st.
--


Nasdaq comp'


The Nasdaq saw a net weekly gain of 1.4%, breaking a new historic high of 6464. Soft rising trend will be around 6270 next week. Core trend from early 2016 is still a considerable way lower, currently in the 5600s, and by end Oct' near 5800. There are multiple aspects of support within the 6000/5900 zone. Any price action <5900 seems very unlikely for the remainder of the year. Its notable that some cooling into October would take 7k out of range until at least early 2018.


Dow


The mighty Dow climbed 470pts (2.2%), breaking a new historic high of 22275, just a touch under the upper bollinger. Underlying MACD is set to turn positive next week, with the key 10MA offering support around 22k. In early October, key rising trend - from early 2016, will be in the 21300s. Key psy' levels are 21k and 20k. No sustained price action <21k is expected.


NYSE comp'


The 'master index' climbed 1.6%, breaking a new historic high of 12080. Underlying MACD is set to turn positive next week. A failure to keep pushing upward would be rather bearish, and offer a 5% down wave to around the lower bollinger in the 11500s. That would notably break the mid term trend from early 2016. Things would turn decisively bearish with a Sept' or Oct' close <11500, which would be under the key monthly 10MA.


R2K


The R2K was the leader this week, +2.3% to 1431, just 21pts shy of the July historic high. Underlying MACD is set to be near the zero threshold next week, as price momentum is swinging back to the equity bulls.

Its important to note that the R2K was the first - and so far only index, to decisively break the mid term upward trend from early 2016. Any new historic high would negate the break, and offer the 1500s within a few months. For a bearish Sept' close, the bears only need to settle the R2K <1380, which isn't that far down. That 'break threshold' will climb to around 1400 for the Oct'31st close.


Trans


The 'old leader' - Trans, climbed for a fourth consecutive week, +1.7% to 9546, just 2.2% shy of the July historic high. Like other indexes, underlying MACD is set to be near the zero threshold next week. In theory, the tranny could climb for another 3-5 weeks. However, seasonally, the setup favours the equity bears. First big support is the 9k threshold. Things would only turn bearish with any price action <8800.
--


Summary

A very bullish week for all six of the main indexes, with a quartet of historic highs in the sp'500, dow, nasdaq comp', and nyse comp'.

The Trans and R2K continue to lag, although both are only 2% from breaking their July historic highs.

The R2K remains the one index that decisively broke the mid term upward trend - from early 2016, but that issue would be negated with a new historic high.

Five indexes (R2K being the exception) have around 5% of downside buffer before doing any real damage to the mid term trend.
--


Looking ahead

M - Housing market index
T - Housing starts, import/export prices
W - Existing home sales, EIA Pet' report.

The FOMC announcement will be at 2pm. No rate hike is expected. Its also unlikely that QT (quantitative tightening) will begin until at least December. There will be a Yellen press conf' at 2.30pm, and that will likely last an hour.

T - Weekly jobs, Phil' fed, FHFA house price indx', leading indi'
F - -

*In addition to Yellen on Wednesday, there will be 3 fed officials on the loose on Friday, notably - George and Kaplan, at a conf' discussing global oil supply/demand.
--


If you value my work, subscribe to me.

For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html


--
Extra charts @ https://twitter.com/permabear_uk
 
Have a good weekend
--

*the next post on this page will likely appear 6pm EST on Monday.