Friday, 28 July 2017

Weakness into the weekend

US equity indexes closed moderately mixed, sp -3pts at 2472. The two leaders - Trans/R2K, settled +0.4% and -0.3% respectively. VIX settled 1.8% at 10.29. Near term outlook offers a sig' wave lower to sp'2435 on Monday. Things would only get marginally exciting with any price action <2425, but that looks very unlikely.


sp'daily5



VIX'daily3



Summary

US equities ended the week with a fair amount of moderate chop. The settling candle was of the reversal type, but there is little reason to believe the market won't resume lower next Monday. Underlying MACD (blue bar histogram) cycle is set for a bearish cross late Monday, or certainly at the Tuesday open. Prime target remains sp'2435.

Things would get 'interesting' with any price action <2425, but that looks very unlikely. Keep in mind, today saw the Dow break (if fractional) a new historic high. Broader price action remains 'scary strong'.

As for volatility, the VIX saw a high of 11.30, but with a moderate equity recovery into the late afternoon, the VIX cooled. However, its notable that the VIX managed a fifth consecutive net daily gain, the best run since mid April. Further, the fact this occurred within a week where we saw VIX break a historic low of 8.84, is rather notable indeed.

Goodnight from London
--

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

Thursday, 27 July 2017

A very mixed day

US equity indexes closed very mixed, sp -2pts at 2475 (intra range 2484/59). The two leaders - Trans/R2K, settled lower by -3.1% and -0.6% respectively. VIX settled +5.3% at 10.11. Near term outlook offers a partial gap fill to sp'2435, before resuming upward in August.


sp'daily5



VIX'daily3



Summary

*note how the Tues/Wed' black-fail candles in the sp'500 were subtle warnings of today's break lower.
--

US equities opened very mixed, but with a notable trio of new historic highs for the sp', nasdaq comp', and the Dow. There was a very strong swing lower from 12pm onward, with the market filling the first, and secondary gap zones.

The third gap zone of sp'2435/25 remains set to be at least partly filled, before the market has a better chance at pushing into the 2500s.

Market volatility saw a morning low of 9.16, but with equities swinging lower, the VIX saw a mini explosion into the mid 11s. If sp'2430s, VIX will see the 12s.
--


A note on AMZN



Earnings were lousy, with headline EPS of just 40 cents, with operating costs +28.2% to $37.33bn. If you extrapolate, that makes for an annual $1.60, giving a PE of 625 with the stock around $1000.

see: https://finance.yahoo.com/news/amazon-profit-slumps-77-pct-201026358.html

Ms. Link - whom I've never been a fan of, noted how "... you buy Amazon for top line growth, not profits'. Well, being within the mainstream, I can't blame her for towing that party line, but the financial historians won't look kindly on that kind of batshit crazy investment opinion.

To be clear, I like the service, but as a company, its pure garbage. No significant profits, no dividends, and unquestionably, causing problems for thousands of retailers across the globe.

Its notable that one of the few who is actually deriving an income from Amazon is Bezos. Perhaps he'll make it to Mars via Blue Origin, before this South Sea-esque bubble bursts?
--


Here in the metropolis...

Sunshine between the showers
Goodnight from London
--

Wednesday, 26 July 2017

Fed day chop

US equity indexes closed moderately mixed, sp +0.7pts at 2477.  The two leaders - Trans/R2K, settled lower by -0.1% and -0.5% respectively. VIX settled +1.8% at 9.60. Near term outlook still offers a swing lower to the sp'2430s. Its notable though, that more within the mainstream are starting to tout the 2600/700s for year end.


sp'daily5



VIX'daily3



Summary

US equities saw a day of fed chop, with the sp' seeing a trading range of just 6.75pts. There were new historic highs (if only fractional) in the sp', nasdaq comp', and dow.

--
Bonus chart for poster 'Kin'...

NYSE comp'.


The NYSE comp' - or the 'master index', as I call it, settled with a black- fail candle, having fallen a touch shy of breaking a new historic high. Rising trend is currently in the 11770s. If that is broken, along with the 50dma, then yes... things would get interesting.

--

Its notable that today saw semi-regular guest Prof' Siegel tout another '10% of upside before year end'.


... equating to the sp'2720s and Dow 23900s. My year end target of 2683 remains on track, and is broadly shared by Oscar Carboni and Morgan Stanley.
-

Market volatility was stuck in the 9s until the fed press release, which then saw a flash-print of 8.84.. a new historic low.
--

Not the best of summer days


... and as the closing bell was about to ring... the grey horror clears for a few minutes of golden light. Yours truly should be somewhat far further south.

If musically inspired.. extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
--

If you think I'm worth at least $1 per trading day... subscribe.


... or you should be able to buy 2 shares of SNAP within the relatively near term each month.

Tuesday, 25 July 2017

The historically low VIX

US equity indexes closed moderately higher, sp +7pts at 2477 (intra high 2481). The two leaders - Trans/R2K, settled higher by 0.7% and 0.9% respectively. VIX settled u/c at 9.43. There are three open price gaps to the sp'2430s, and it'd be even more bizarre than VIX 8s, if those aren't filled within the near term.


sp'daily5



VIX'daily3



Summary

US equities opened moderately mixed, and battle slowly upward into the early afternoon, but that was enough to generate new historic highs in the sp'500, NYSE comp', and the R2K.

Its notable that the settling daily candle for the sp'500 was a black-fail doji. Those are suggestive of near term weakness. I fully admit I have been calling this for some days, but a retrace to at least partly fill the sp'2435/25 gap zone remains due. In the scheme of things, its only a small swing lower, 37pts (1.5%), and is entirely viable across just a few days.
--


Meanwhile...

In pre-market, the VIX printed 9.04, which was yet another new historic low. The actual intraday historic low was 9.05, with the VIX settling u/c at 9.43.

VIX, monthly - historic, 30yr


I have regularly touted - since last July, that the VIX-long trade is dead. Sure, we can see brief spikes, but the highs continue to be lower... with lower lows. Even if sp'2435 in the near term, that probably won't even be enough to generate VIX 13s.

For those curious on the background for the VIX... https://en.wikipedia.org/wiki/VIX
--

Hyper bullish sunshine
Goodnight from London
--


Monday, 24 July 2017

Starting weak

US equity indexes closed moderately mixed, sp -2.6pts at 2469. The two leaders - Trans/R2K, settled -0.4% and +0.1% respectively. VIX settled +0.7% at 9.43. Near term outlook offers a brief foray to the sp'2430s. Mid term outlook remains bullish, supported by 'reasonable' earnings, and an economy that is ticking along with 2.0% growth.


sp'daily5



VIX'daily3



Summary

US equities opened on a fractionally weak note, and saw minor chop - leaning on the weaker side, across the day. The trading range was a notably tight 6.78pts.

Market volatility remains exceptionally subdued, and its notable that the VIX broke a new HISTORIC low of 9.26 in the closing hour. Pretty incredible, as the 8s are clearly viable at any point.

Best guess remains: near term weakness to sp'2430s - with VIX 11/12s, before resuming upward.
--

Not exactly the best of summer days

Extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
--


Saturday, 22 July 2017

Weekend update - US weekly indexes

It was a somewhat mixed week for US equity indexes, with net weekly changes, ranging from +1.2% (Nasdaq comp'), +0.5% (sp'500, R2K), -0.3% (Dow), to -2.8% (Transports). Near term outlook offers brief cooling of around 1.5% to the sp'2430s, before making a more serious push to the 2500s in August.


Lets take our regular look at six of the main US indexes

sp'500


The sp' settled net higher by 13pts (0.5%) to 2472, with a notable new historic high of 2477. Underlying MACD (blue bar histogram) ticked higher for a second week, remains fractionally negative, and is due a bullish cross within 1-2 weeks. The key 10MA is at 2432, and by September, will be close to 2500.

Best guess: near term cooling to the 2430s, before resuming upward into end month. August looks set for further upward melt, with the 2500s highly probable by early September. A 5% retrace seems viable within the 'delicate period' of Sept/Oct. The year end target of 2683 remains on track, but will require at least one further rate hike, to help kick the financials upward.

Equity bears have nothing to tout unless the mid term upward trend - from Feb'2016 is broken. As of early August, that will be around 2370.
--


Nasdaq comp'


Tech continues to lead the way upward, with the Nasdaq settling +1.2% at 6387, with a notable new historic high of 6398. Price momentum is set to turn positive next week, as the 6500s seem viable by September. The 7000s are just about within range by year end. Does anyone seriously think we'll trade under 5k any time soon?


Dow


The mighty Dow saw a minor net weekly decline of -0.3% to 21580. Underlying MACD remains fractionally negative, but will surely turn positive within 1-2 weeks. Upper bollinger will be offering the 22000s in August. Things will only turn provisionally bearish if the Dow is trading <21k from September onward.


NYSE comp'


The master index settled +0.2% at 11924, with a notable new historic high of 11963. Broader price action remains very strong. The 12000s look a given by late summer. Things would only turn bearish if a break <11800, from Sept' onward.


R2K


The second market leader - R2K, settled higher for a fifth consecutive week, +0.5% at 1435, with a notable new historic high of 1452. Underlying MACD has turned fractionally positive for the first time since mid February. Core rising trend will be around 1410 next week. Many now seem resigned to the 1500s.. or even 1600s by spring 2018. I will continue to note that its ironic that I seem to be the only one suggesting 'R2K @ 2K'.


Trans


The 'old leader' - Transports, had the worse week since (at least) April, settling -2.8% at 9471. Its notable though that last week saw a new historic high, as the equity bulls have very little to prove. The psy' level of 10k remains probable by late September, especially if WTIC/fuel prices see another significant wave lower.
--


Summary

All US equity indexes remain within their mid term upward trends from early 2016

The US equity market is regularly breaking new historic highs in ALL six indexes

There is downside buffer of around 5-7% for most indexes, before multiple aspects of support would be challenged.
--


Looking ahead

In addition to a truck load of corp' earnings...

M - Existing home sales
T - FHFA house price index, Case-Shiller HPI, consumer con', Richmond fed'
W - New home sales, EIA Pet' report

FOMC: a press release will be issued at 2pm. No policy change is expected. There will NOT be a press' conf'.

T - weekly jobs, durable goods orders, intl' trade, EIA Nat' gas
F - Employment costs, consumer sent', GDP Q2 - market is seeking growth of 2.6%, against Q1 1.4%. Arguably, any number >2.5% will put renewed pressure on the fed to raise rates in Sept', or certainly by Dec'.

*the only fed official scheduled is Kashkari (Friday), whom has notably dissented against both rate hikes this year. 
--

If you value my work, subscribe to me.


Have a good weekend
--

*the next post on this page will likely appear 6pm EST on Monday.

Friday, 21 July 2017

Opex weakness

US equities closed moderately weak, sp -0.9pts at 2472. The two leaders - Trans/R2K, settled lower by -0.1% and -0.5% respectively. VIX settled -2.3% at 9.36. Near term outlook offers further weakness to at least partly fill the gap zone of sp'2435/25. Mid term outlook remains 'scary strong', as earnings are coming in reasonable.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, and saw chop across the day, but that was somewhat natural for what was option expiration. We have two entirely open gaps of 2463/60 and 2435/25. Some cooling to at least 2435 seems very probable by next Wednesday.

Market volatility remains very low, with the VIX settling lower for a third consecutive day.

Today's closing hour intra low of 9.30 is (I believe) the lowest EVER VIX.


The daily/weekly close of 9.36 is the LOWEST ever daily/weekly close. 
--

Sunshine before another storm

Goodnight from London
---

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

Thursday, 20 July 2017

A little cooling

US equity indexes closed moderately mixed, sp -0.4pts at 2473. The two leaders - Trans/R2K, settled -1.0% and u/c respectively. VIX settled -2.1% at 9.58. Near term outlook offers opex-chop into the weekend, with weakness to at least partly fill the gap of sp'2435/25 next week.


sp'daily5



VIX'daily3



Summary

US equities opened a little higher, with a quartet of new index highs for the sp'500, Nasdaq comp', nyse comp' and the R2K. There was an opening reversal, but it never lasted long, with equities challenging a new high in the late afternoon.. but getting stuck.

Market volatility remains very subdued, with the VIX still unable to break and hold the 10s. If sp'2435 next week, that should equate to VIX 11/12s. The low teens look out of range for the rest of the month.
--

Just another summer's day

Extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
--

Wednesday, 19 July 2017

Scary strong

US equity indexes closed broadly mixed, sp +13pts at 2473. The two leaders - Trans/R2K, settled -0.6% and +1.0%. VIX settled -1.0% at 9.79. Near term outlook still offers a retrace to sp'2435, but it should be clear, the 2500s are coming, with the 2600/700s probable by year end.


sp'daily5



VIX'daily3



Summary

US equities opened somewhat mixed - with notable weakness in the transports (via UAL and CSX), but by late afternoon, we had a quartet of new historic highs in the sp', nasdaq comp', nyse comp', and the R2K.

Market volatility remains broadly very subdued, with the VIX still unable to escape single digits. If sp'2500s... might we see the 8s in late August/early Sept' ?
--


Scary strong

I could babble on about dozens of variables, not least how other world markets are trading. I'll merely suggest anyone go stare at the following for a few minutes...

sp'monthly3


Note the upper monthly bollinger, that will be offering the 2500s in August. Further, note the key 10MA, currently at 2326.. and ticking upward by around 25pts a month. Unless we see a monthly close under that, the equity bears have nothing to tout.
--

Post storm sun

As ever, extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
--


Tuesday, 18 July 2017

Word games

US equity indexes closed moderately mixed, sp +1pt at 2460. The two leaders - Trans/R2K, settled lower by -0.7% and -0.3% respectively. VIX settled +0.7% at 9.89. Near term outlook offers weakness to the sp'2435/25 gap zone, before resuming upward into opex.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, flooring at sp'2450, with a moderate latter day recovery, clawing slowly upward into the close. Short term price structure offers a baby bear flag, and the market really should cool by 25pts within the next two days.

Market volatility remains broadly subdued, with the VIX settling fractionally higher, but still stuck in the 9s. If sp'2435/25 zone... VIX 12s.. on a stretch. Even the 13s look out of reach this week.
--


Word games

I was going to end the day with a mini rant about the 'biggest and brightest' - as inspired by one of my twitter followers, but Oscar Carboni's latest video has swayed me to briefly highlight the issue of word games.

Do you notice how the word 'prediction' is almost taboo these days?

Instead, people use all manner of synonyms:  outlook, forecasts, scenarios, 'best guess', or in the case of Mr Carboni... a 'projection'.

I was never one for word games, I call things as I see it, regardless of whether it might piss off some of you, not least the infamous 'gold bugs'.

Even someone like Martin Armstrong - whom I'd suggest anyone to at least periodically follow, appears too fearful to use the P word. Instead, he goes with the F word. 

Yours truly endeavours to provide the best 'predictions' out there. Some turn out real good... some not so good, but yes.. they ARE predictions. If you'd prefer I use the term 'projections' or 'forecasts'.... you're at the wrong site.

*If you are curious to see the original comments between myself and Mr C, see https://youtu.be/C9OF6RS5zP8  
--

Here in the metropolis..

Pre-storm gloom

As ever, extra charts in Ah @ https://twitter.com/permabear_uk

Goodnight from a PREDICTIVE London
--

Monday, 17 July 2017

Still on track

US equity indexes closed moderately mixed, sp' u/c at 2459. The two leaders - Trans/R2K, settled -0.5% and +0.2% respectively. Near term offers a minor retrace to the sp'2435/25 gap zone. Most now recognise the 2500s will seen this summer, then its merely a case of whether the year closes in the 2600s or '700s.


sp'daily5



VIX'daily3



Summary

It was a pretty sleepy day in equity land, with the sp' seeing a trading range of just 5pts. Volatility remained subdued, but the VIX did finally manage a net daily gain, if still in the 9s. Near term, high confidence of a retrace to the 2435/25 zone - with VIX 11/12s, before renewed upside.
--


At the start of the year I posted this...

sp'monthly6b



Week after week, month after month, I've touted the end year target of sp'2683. Nothing has changed, the original target remains on track. The market has teased the bears with minor retraces of a few percent, and we're typically 5% above the key 200dma.

Keep in mind, the kooks will be coming out of the woodwork in a few weeks time, as a solar eclipse will occur (Aug'21st) across North America. The dollar doomers continue to spout their nonsense on Youtube, with some of the more infamous precious metal bugs still touting $500 silver and $50k gold.

The bulls only have to trade flat across the 'delicate time' of Sept/Oct. which is always a vulnerable time for the market, as some realise a painfully long six months of chilly grey gloom is ahead.

Right now, there is still zero reason to think the mid term trends will be broken any time soon.

Goodnight from London
--