Saturday, 15 October 2016

A week for the bears

US equities closed moderately mixed, sp u/c @ 2132 (intra high 2149). The two leaders - Trans/R2K, settled lower by -0.2% and -0.3% respectively. VIX settled -3.4% @ 16.12. Near term outlook is bearish, with viable pre-election downside of around 3% to the sp'2070/60s.




The market opened confidently higher, but naturally became stuck within the little resistance zone of sp'2145/50. From there.. some cooling to 2133, with minor chop across the afternoon.

VIX was subdued across the day, with some moderate cooling into the weekend. Cyclically, the VIX is now on the low end, and will be vulnerable to spiking toward the key 20 threshold, not least if sp <2100.

No alarm bells... yet

I am well aware a fair few are still crash calling. We're now half way through the tricky month of October, and all we've seen so far is mostly moderate chop. Soon it'll be November, and the election will be out of the way.

At best, the equity bears look like they have a chance at a brief washout to test the 200dma in the sp'2070/60s.. with Dow 17600/500s.

sp'monthly3c - bare bones

Unless we see a monthly close under the 10MA - currently at 2083, price action is still broadly bullish.

Goodnight from London

*the weekend post will appear Sat' 12pm EST, and will detail the US weekly indexes