Saturday, 28 May 2016

Daily Wrap

US equity indexes ended the week on a moderately positive note, sp +8pts @ 2099. The two leaders - Trans/R2K, settled higher by 0.6% and 0.9% respectively. VIX cooled into the weekend, -2.3% @ 13.12. Outlook remains extremely borderline, as the market is a mere 1.7% from breaking a new historic high.


VIX, daily3


sp'500: the fourth net daily gain of the last seven trading days. A notable fourth day above the 50dma. Underlying MACD (blue bar histogram) is the highest it has been since late March - when sp' 2050s.

VIX: naturally melting lower into the long weekend, with a notable black-fail candle on Monday, followed by four net daily declines.

Update on the USD, weekly

A fourth consecutive net weekly gain. Underlying MACD is set for a bullish cross at the Tuesday open, and the DXY 96/97s looks highly probable in June.

It is a curious thought as to when the mainstream will start getting twitchy about the strengthening dollar. Similarly, the 'dollar doomers', what are they going to say as the USD (as seems inevitable) breaks above the DXY 100 threshold.. and keeps on going?

A big move is coming

Many now recognise that a big move is coming. Either the market is going to see a massive breakout to new historic highs, or the recent rally from sp'2025 is just another tease to the bulls, before renewed significant downside in June.

My best guess?  Considering an array of threats - not least the BREXIT vote, I'm still leaning for another wave lower.

Clearly though, if we break >2111, that will likely lead >2134, in which case, the short side trade is arguably dead for the better part of a year or two.

Yours... trying to be open minded.

Goodnight from London

*the weekend post will appear here (as normal), Sat' 12pm EST, and will detail the US weekly indexes