Friday, 15 January 2016

Pre-Market Brief

Good morning. US equity futures are sharply lower, sp -31pts, we're set to open around 1890 - just 12pts above the Thursday low. Oil is imploding again, -5.1% in the low $30s. Gold is catching a minor fear bid, +$7.



Q. why the big overnight drop?

1. Oil is clearly a problem, as it remains vulnerable to cooling to next support in the $25s.
2. INTC results were okay, but the outlook is not great
3. Overnight Asia/EU action... broadly weak
4. OPEX... ahead of a long 3 day weekend, the 'rats want to close out'.

Yesterday mornings price action was highly indicative of a short term floor, so unless 1878 is broken under today, the near term outlook will not change.

Again, it remains the case that anyone trying to play the bounces is going to be at high risk to an overnight snap lower.  The default trade remains to the short side.

If 1878 is broken today, then the 1750/25 zone will be back on the menu, but I'm guessing no... and with a long weekend ahead, I don't intend to get involved.

early movers...
INTC -6% @ $30.80
FCX -7%
AA -4% in the $6s... the $4s look due by early summer

GDX +1.1%
TVIX +13% @ $10.00
TLT +0.9%... as bonds rise.. and yields fall

Overnight action..

Japan: -0.5% in the 17100s
China: unravelling into the weekend, -3.5% @ 2900... well under the 3K threshold, on the way to the 2500s.
Germany:currently -1.2% in the 9600s.

awaiting a truck load of data...

Have a good Friday

8.04am... Citi (C) and Wells Fargo (WFC) results were a touch about expectations.

Most do not realise, C remains -90% from the pre-2008 collapse levels.  Even BAC still can't get a monthly close >$18.

Financials... stuck. Energy amashed. Miners..... obliterated.

Were it not for tech and the momo stocks, this market sure wouldn't have made it >2K

8.31am... Retail sales m/m  -0.1%...    lousy.

Empire state: -19.3     borderline apocalypse

PPI m/m -0.2%...   deflationary.. and the market won't like it.

sp -40pts... 1881.....   3pts from breaking the key low....

8.48am.. sp -42pts... 1879... and it looks like the Thursday low will be broken.

If <1878... equity bears should seek a VIX >27.39.. to confirm the renewed weakness

SNAP... as the low is taken out...

sp -46pts.. 1875.....    

sp-50pts... 1871....  4pts from the Aug' 2015 low

9.12am.. sp is holding powerful declines of -45pts... 1876....

Gold has build fear-bid gains, +$17... .but those never endure of course.

9.16am.. Industrial production, -0.4%...  lousy.  Utilisation 76.9....    lousy.

GDP Q4 is due in two weeks time.. to end the month... sub <1.0% looks a given.

9.31am.. sp -52pts....    VIX +20% in the upper 28s... confirming the move.

Window is wide open to 1750/25... not today... but next week it sure is viable.