Tuesday, 15 December 2015

Transports break the August low

Whilst the sp'500 broke a new cycle low of 1993, before settling +9pts @ 2021, there was notable weakness in the 'old leader' - Transports, which hit 7406, the lowest level since April 2014. For now, the Transports continues to warn of longer term trouble for the broader market.

Trans, weekly

Trans, monthly


Last week confirmed a very large bear flag... and today merely adds to the continuing train wreck that is the Transports index. For now... there is ZERO sign of a turn/floor.

In any bounce into early 2016, first upside target is the 8K threshold, but that is a full 500pts (6% higher), and looks very difficult considering the current bearish rate of trend.

**Bonus chart

WTIC oil, monthly2

An outright bearish red candle on the monthly chart, having broken a new multi-year low of $34.53. Keep in mind that the Feb' 2009 low was $33.55... so we're real close to testing a core low. Energy bulls really can't get confident until the first green candle above the monthly 10MA.. and right now.. that looks out of range until next summer.. at the earliest.

Update from Oscar

I realise some of you can't stand Oscar and get annoyed I highlight him on my pages... but do watch this !

I certainly think the '20 month issue' is interesting, although I'd place far more emphasis on the issue of the next rally.

I am entirely in agreement with Oscar on the notion that the next rally MUST break new historic highs in at least the headline indexes (Dow, sp, Nasdaq). If not... it will be a major failure, and we'll be looking at severe downside in 2016.

I'm reminded of a number of market commentators who continue to believe QE4 is inevitable. Notably... Dalio, whom Bloomberg gave extensive exposure to a few months ago.

How about sp'1500s.... and the Fed spool up the printers again? As an aside, if Gold was around $900.... that would also make for a near perfect multi-year low (inc' for the related mining stocks).

Looking ahead

Tuesday will see the latest CPI data, Empire State, and housing market data.

In terms of price action.... best guess... early morning strength... then a lot of chop for rest of the day, as the market moves into a holding pattern ahead of the Wed' afternoon announcement/press conf'.

Goodnight from London