Saturday, 8 October 2016

The data is reasonable

US equity indexes closed moderately weak, sp -7pts @ 2153 (intra low 2144). The two leaders - Trans/R2K, settled lower by -0.9% and -0.8% respectively. VIX settled +5.0% @ 13.48. Near term outlook offers a push into the 2170s, as Q3 earnings start to pour in.




We saw a natural down cycle, flooring at sp'2144. There was a latter day recovery, but it wasn't anything of significance.

With indexes closing a little weak, the VIX managed a moderate net daily gain in the mid 13s... which is clearly still bizarrely low, considering the uncertainty of looming earnings and an election.

Market chatter from Schiff

As ever, make of that... what you will.

Another big data point

The monthly jobs data wasn't great at 156k, and was well below my target of >200k. Yet... neither was the number remotely dire.

It was merely 'reasonable', and that is arguably how much of the dozens of key econ-data points continue to come in. The US economy is not close to a recession... its merely ticking along, which is far better than most other world economies.

Fischer (not pictured), that is GS' Hatzius

The Fed's Stanley Fischer touted today's report as pretty close to Goldilocks. Indeed, the Fed don't want too high a number, nor one too weak.

This 'ticking along' is set to continue into 2017.. and probably 2018. However, the next recession... when it hits, will give us another bear market, probably on the order of 40/50%.

Ironically, I do hope we begin such a down wave from much higher... preferably around sp'3K. There will be multi-decade support of the sp'1500s, and that'd be the primary target. I kinda hope I'm still around to see it happen.

Goodnight from London

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