Wednesday, 3 May 2017

The breakaway gap

US equity indexes closed moderately mixed, sp +2pts at 2391. The two leaders - Trans/R2K, settled +0.9% and -0.6% respectively. VIX settled +4.7% at 10.59. Near term outlook offers a push to the sp'2410/20s, assuming AAPL earnings are at least 'reasonable'.




It was another rather subdued day in US equity land, with the sp' seeing a tight trading range of just 7pts.

There remains a large gap of sp'2370/48 - from the opening jump after round'1 of the French election. Such gaps almost always get filled, but there are exceptions. A key short term issue is indeed whether the market has to first cool to 2348, before it can more solidly advance across the summer.

What might be the excuse? Well, we do have round two of the French election this Sunday, but on balance, Macron will surely win. I'm not aware of any underlying polling data that suggests Le Pen can garner 1 in 2 of the electorate. It seems too difficult a challenge.

Were Le Pen to win though.. then yes, we'd flash drop to 2350/40s this coming Sunday night, before whipsawing back upward.

Here in the metropolis...

I guess you could say it was... a bearable day.

*extra charts in AH @

Goodnight from London