Wednesday, 4 May 2016

10am update - breaking lower

US equities continue to slide, with the sp'500 breaking the Friday low. Next support is around 2040 - where the 50dma is lurking. For the moment, VIX remains broadly subdued, +4% in the 16s. Oil is +2.5%, ahead of the latest EIA report.




re: VIX.. yes its still pretty subdued.. and is still not showing any real upside power.

The opening black-fail hourly candle is not exactly inspiring.

To counter that, underlying MACD (blue bar histogram) cycle is set for a bullish cross in the 10am hour.. and that would offer the sp'2030s today.

So.. opening declines... somewhat interesting, but there are multiple aspects of support from 2040, 39, 33.

Equity bears should be battling for the 2020s, which would offer some initial clarity that 2111 is a key mid term high.

Best bear case is a 38% fib retrace of the 1810-2111 wave... which would give the 1990s.. before next sig' bounce into 3rd week of May.

notable weakness, BAC, daily

As economic weakness bodes for no rate increase at the June 15th FOMC, BAC is struggling - along all other financials. Rising trend currently matches where the 50dma is, so a break <$13.70 would be significantly bearish.

stay tuned!

10.01am.. Factory orders:  1.1%... above expect'

ISM service sector: 55.7... above expect'

10.04am.. VIX sure is twitchy... gaps down at 10.00 precisely.... almost filling the opening gap higher...

Need to see >16.60 to confirm underlying market weakness

10.10am.. Eyes on the VIX... if it finally starts to show some upside power.. then equities headed sig' lower... to break the 2039/33 lows.

10.31am.. EIA report: net weekly 2.8 million barrel surplus.

Oil looks highly vulneralbe... target is USO.. $10.00...  and that would be equiv' to WTIC -10% from current levels.