Saturday, 24 June 2017

Weekend update - US weekly indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.8% (Nasdaq comp'), +0.6% (R2K), +0.2% (sp'500), +0.05% (Dow), to -0.3% (NYSE comp', Trans). Near term outlook offers moderate weakness, but broadly, the US market remains super strong.


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

sp'500


The sp'500 climbed for a second consecutive week, settling net higher by 5pts (0.2%) at 2438. There was a notable new historic high of 2453.82. Underlying MACD (blue bar histogram) is fractionally positive, indicative of underlying market strength. The key 10MA is at 2406, and will offer support within the 2410/15 zone into end month.

Best guess: no sustained price action <2400 this summer. Technically, the 2500s will be viable as early as late July, but that will require almost everything to be Goldilocks. Equity bears will have their best chance of a 5% retrace in Sept'/Oct. The year end target of 2683 remains on track.

Equity bears have nothing to tout unless a break of core rising trend - from Feb'2016 is broken. Right now that stands around 2270, and is climbing by around 25pts a month. Within the 'delicate' period of Sept/Oct, things would turn exceptionally bearish on any daily close <2370. If that occurred, the first target would be the lower monthly bollinger.. currently around 1900.
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Nasdaq comp'


The Nasdaq continues to lead the way, settling higher by a rather significant 1.8% at 6265, which isn't that far below the recent high of 6341. Short term support is around 6100, and considering ongoing price action, the 6k threshold looks secure for the summer. The 7000s are highly probable before year end.


Dow


The mighty Dow settled higher for a fifth consecutive week, but by just 10pts (0.05%), settling at 21394. There was a notable new historic high of 21535. Underlying MACD is set to turn positive within 1-2 weeks, as the upper bollinger will keep prices restrained to around 21500/600 into early July. The giant psy' level of 20k is powerful support, and should hold for the rest of the year.


NYSE comp'


The master index settled -0.3% at 11733, but did notably break a new historic high of 11836. The mid term trend from Feb'2016 remains comfortably intact. Things only turn bullish if any price action <11500 in July or onward. The 12000s will be viable by late July/early August.


R2K


The second market leader - R2K, settled +0.6% at 1414, which is just 17pts shy of the recent high. Underlying MACD is set to turn positive within 1-2 weeks, and bodes for the 1420/30s. The 1500s are a realistic target by late September. Things only turn provisionally bearish if <1390, and that is admittedly not that far down.


Trans


The 'old leader' - Transports, settled net lower by -0.3% at 9388. Underlying MACD is set to turn positive within 1-2 weeks. Low energy prices are especially bullish for the fuel consuming transportation stocks, and thus further upside to the giant 10k threshold seems probable this summer. Things only turn bearish with price action under the May low of 8744. Even then, core rising trend will offer support around 8600 in August.
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Summary

All the main US indexes are holding within their mid term bullish trends from early 2016.

The Nasdaq is broadly leading the way, followed by the sp'500, Dow, and NYSE comp'

The laggards - Trans/R2K, are both close to breaking new historic highs.
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Looking ahead 

M - Durable goods orders
T - Case-Shiller HPI, consumer con', Richmond fed'
W - Intl' trade, pending home sales, EIA Pet' report
T - Weekly jobs, Q1 GDP (3rd/final)
F - Pers' income/outlays, Chicago PMI, consumer sent'.

*There are a handful of fed officials on the loose, notably, Bullard (Thurs, 1pm EST), who will be just a few miles away from yours truly in London, giving a lecture on the US economy and monetary policy.  

**Friday will be end month/Q2, and indeed.. the first half of 2017. There is high threat of an element of 'window dressing', which most certainly will favour the equity bulls.
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Have a good weekend
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*the next post on this page will likely appear 7pm EST on Monday.

Choppy end to the week

US equity indexes closed moderately higher, sp +3pts at 2438. The two leaders - Trans/R2K, both settled higher by around 0.7%. VIX settled -4.4% at 10.02. Near term outlook offers weakness to around sp'2415. More broadly, the 2500s are viable as early as late July.


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Summary

US equities opened in minor chop mode.. leaning a touch weak. The market hit sp'2431, and then it became apparent that some were already hitting the buy button. There was a moderate swing upward into the afternoon to 2441, before cooling to 2433, and then spiking upward into the re-balancing weekly close.

Volatility remained subdued, and with an anticipated sleepy weekend ahead, the VIX even failed to stay out of the 9s... which was something of a surprise.
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Goodnight from London
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*the weekend post will appear Sat'12pm EST, and will fully detail the US weekly indexes

Friday, 23 June 2017

Leaning weak

US equity indexes closed moderately mixed, sp -1pt at 2434.  The two leaders - Trans/R2K, settled higher by 0.3% and 0.4% respectively. Near term outlook offers the sp'2415/00 zone.


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Summary

US equities opened in minor chop mode, clawing upward to 2441. There was a clear rollover into the close.

Market volatility remains broadly subdued, although the VIX is still managing to stay out of the 9s.

Near term outlook offers at least sp'2422/20, which should equate to VIX 12s. If sp'2415/00 zone, then 13/14s are viable. The key 20 threshold looks out of range until at least late September. The only wild card would be a weekend 'North Korean surprise'.

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Meanwhile... here in London city...


The 'Tower' story keeps on running.. see: http://www.bbc.co.uk/news/uk-40366646

The latest is there are around 600 'clad' towers in England, although no one yet knows how many are covered in the flammable version. I'd guess at least a quarter, as the flammable version is (naturally) cheaper.

Yours truly prefers nothing higher than a few floors, and simple unclad brick.

Goodnight from London
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Thursday, 22 June 2017

A midsummer's day market

US equity indexes closed moderately mixed, sp -1pt at 2435. The two leaders - Trans/R2K, settled lower by -0.1% and -0.3% respectively. VIX settled -1.0% at 10.75. Near term outlook offers the 2415/00 zone, which might equate to VIX 13/14s. Broadly, the 2500s are a given.. as early as late July.


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Summary

US equities opened in minor chop mode, and saw some moderate weakness to sp'2430 - fully filling the opening gap from Monday morning. There was an attempt to bounce in the afternoon, but it was pretty weak. A break <2430 will offer 2415/00 before the weekend. This was something that should have happened last week, but quad-opex was something of a hindrance.

Market volatility popped to 11.40 - with sp'2430, but settling in the 10s. Its something of an irony to note we've not traded VIX 9s in 9 trading days.
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Midsummer's day concludes

So many planes... bullish UAL?

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

Goodnight from London
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Wednesday, 21 June 2017

A little weakness

US equity indexes closed broadly weak, sp -16pts at 2437. The two leaders - Trans/R2K, settled lower by -1.8% and -1.1% respectively. VIX settled 4.7% at 10.86. Near term outlook offers short term weakness to sp'2415/00, but broader price action remains 'scary strong'.


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Summary

US equities opened a little lower, and leaned moderately weak across the day. Its notable that the Dow did break a new historic high of 21535. The very sig' downside in the Tranports though does bode for main market weakness of another 1-1.5% before the weekend.

Market volatility remains broadly subdued, still stuck in the 10s. There is a notable open gap of 13.25/14.75 from May 19th. To see VIX 14s, we'd likely need sp'2400/390s, and that sure won't be easy. In any case, the key 20 threshold looks out of range until at least late Sept/Oct.
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Midsummers eve

4.10pm EST

4.15pm EST

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

Goodnight from London
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Tuesday, 20 June 2017

Beginning positive

US equity indexes closed broadly higher, sp +20pts at 2453. The two leaders - Trans/R2K, settled higher by 0.6% and 0.8% respectively. VIX settled -0.1% at 10.37. Near term outlook offers weakness to the 2442/33 gap zone. More broadly, the 2500s are viable as early as late July.


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Summary

The week began on a rather positive note, with a trio of new historic highs in the Dow, sp'500, and the NYSE comp'. The closing hour was itself bullish with a new historic high for the sp'500 of 2453.82. This morning's opening gap of 2442/33 will surely be filled within the next few days. Its notable that the 50dma will soon be above the 2400 threshold.

Market volatility remained very subdued, but the VIX did notably hold the 10s.. despite new index highs. Near term.. the 11s look due with sp'2442/33. Things only get marginally interesting with a daily close <2433.
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A batwing drone under a hazy sun

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

Goodnight from London
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Saturday, 17 June 2017

Weekend update - US weekly indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from -1.0% (R2K), +0.1% (sp'500), +0.5% (Dow) to +0.9% (Trans). Near term outlook offers threat of downside of 1-2%, before clawing back upward into July for Q2 earnings. The year end target of sp'2683 remains on track.


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

sp'500


A weekly trading range of 25pts (1.0%), settling +1.4pts (0.1%) at 2433. The key 10MA is at 2395, and will offer support around the 2400 threshold next week. Note the rising lower bollinger, currently at 2299, which also intersects with rising trend from Feb'2016.

Best guess: short term weakness to around the 2400 threshold, the 2390s on a stretch, before clawing back upward into July and across the summer. A retrace of around 5% is due in Sept/Oct. Broadly, a year end close in the mid/upper 2600s appears very much within range.

Equity bears have nothing to tout unless a break under multiple aspects of support, currently 2280/300, and rising by around 25pts a month.
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Nasdaq comp'


The Nasdaq has broadly lead the US market higher, but is clearly seeing some short term weakness, with a second consecutive net weekly decline, settling -0.9% to 6151. It is notable that underlying MACD (blue bar histogram) cycle will turn negative at next Monday's open. The 6K threshold will offer initial support. No price action <5900 can be expected in the near term. The 7000s seem a given before year end.


Dow


The mighty Dow broke a new historic high this week of 21391, settling +0.5% at 21384. A bullish MACD cross is due next week, as the upper bollinger will be offering the 21500s for end June. The 22k threshold is just about within range by end July, but that will clearly require Q2 earnings to come in at least marginally 'better than expected'. The 23000s are a valid target by year end, but that will require no retrace much above >5% in Sept/Oct, and at least one, if not two, more rate hikes.


NYSE comp'


The NYSE comp' broke a new historic high of 11811, climbing for a fourth consecutive week, settling +0.2% at 11772. Underlying MACD has turned positive for the first time since late March.Things only turn bearish if a break <11500 from July onward.


R2K


The second market leader - R2K, was the weakest index this week, settling -1.0% at 1406, but that is just 27pts below last week's historic high. There are a few aspects of support around 1390. Things only turn a little bearish <1360. Underlying MACD cycle remains negative, but price momentum is continuing to claw back toward the zero threshold.


Trans


The 'old leader' - Transports, was the strongest index this week, settling +0.9% at 9414, which is just 2.4% below the historic high of 9639 from February. Underlying MACD is set to turn positive cycle next week, and bodes for the 9600/700s in July/August. The giant 10k threshold looks highly probable by late summer.
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Summary

All US equity indexes remain within their upward trends that stretch back to early 2016.

The US equity market is still regularly generating new historic highs, usually lead by the Nasdaq.

There is downside buffer of around 5% for most indexes, before core support is at risk of being broken.
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Looking ahead

There is very little of significance scheduled, and that will give the Mr Market more time to dwell on geo-political issues.

M - -
T - -
W - Existing home sales, EIA Pet' report
T - Weekly jobs, FHFA house price index, leading indict', EIA Nat' gas report
F - New home sales

*there a fair few fed officials on the loose, notably vice-chair Fischer (early Tuesday), and Bullard (Friday).
--

If you value my work, subscribe to me.


Have a good weekend
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*the next post on this page will likely appear 7pm EST on Monday.

Chop into the weekend

US equity indexes closed fractionally mixed, sp +0.7pts at 2433. The two leaders - Trans/R2K, settled +0.1% and -0.2% respectively. VIX settled -4.8% at 10.38. Near term outlook offers weakness to sp'2400/2390s, before renewed upside into early July for Q2 earnings. Broadly, the US market remains 'scary strong'.


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Summary

There is little to be said about today. Being quad-opex, it was a day of moderate chop, with all indexes settling close to flat.

Volatility remained subdued, but the VIX did notably manage to stay out of the 9s.

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So many towers... so much flammable cladding

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

Friday, 16 June 2017

Cooling into quad-opex

US equity indexes closed moderately mixed, sp -5pts at 2432. The two leaders - Trans/R2K, settled +0.2% and -0.5% respectively. VIX settled +2.4% at 10.90. Near term outlook offers further weakness to at least 2410. The 2390s - where the 50dma is lurking, would be 'best bear case', before another big push upward into Q2 earnings.


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Summary

US equities opened broadly lower - lead by the Nasdaq, with a morning low of sp'2418. There was then a rather typical latter day recovery.  Still, it was a second consecutive net daily decline for most indexes, and on balance, the market looks set for further weakness.

The VIX spiked to 12.01 in the morning, and then cooled into the afternoon. The 13/14s seem due with any price action to sp'2410/00, and certainly with the 2390s.

Friday is quad-opex, and such days are inherently choppy. If the market trades lower to 2410/2390, there will be extremely high probability of a key floor being put in, with yet another latter day recovery. Bears... beware.
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Bullish hazy summer sun

Meanwhile... in the metropolis

Some of the populace are starting to get real pissed, as the Grenfell Tower fire story continues to develop. There are a great many issues involved, not least the lack of sprinkler systems, and why many thought it was fine to wrap entire buildings in flammable plastic blocks.

see: http://www.bbc.co.uk/news/uk-40294993

The current death toll stands at 17, but there is background chatter that it might eventually be in the 75-125 range. There is zero mainstream talk (that I'm aware of) about the burnt out husk of a tower being torn down, but I can't imagine it won't be.

There are even still fires within the tower. http://www.bbc.co.uk/news/av/uk-40295505/london-fire-flames-still-visible-at-tower

As noted... it has to be torn down, but what about all the hundreds of others built in the 1960/70s? None of them merit retrofit, they should simply be pulled. Just two years ago, this article highlighted the growing trend of building high rise apartment blocks...

http://www.dailymail.co.uk/news/article-3032452/More-200-tower-blocks-planned-London-s-skyline.html

I've no issue with most of the designs, just don't wrap them in flammable plastic blocks!

Goodnight from London
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Thursday, 15 June 2017

Post hike depression

US equity indexes closed moderately weak, sp -2pts at 2437. The two leaders - Trans/R2K, settled lower by -0.7% and -0.6% respectively. VIX settled +2.1% at 10.64. Near term outlook offers a washout in the 2410/2390 zone. Broadly though, the 2500s remain highly probable, no later than September.


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Summary

US equities opened fractionally higher, with the Dow and NYSE comp' breaking new historic highs. Yet.. there was a reversal from the open, and after a little micro chop with the press release from Print Central at 2pm, equities leaned increasingly weak. The closing hour saw an intra low of 2428, before a micro ramp to close fractionally lower.

Volatility was mostly subdued, but VIX did see the 11s in the afternoon. The 13/14s look due if sp'2410/2390s by Friday.
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1970s construction in the UK

I was awake until sunrise last night, mostly due to watching a few live feeds of the London tower block fire. In the 1960/70s, the UK built a huge number of low quality tower blocks. The designs were absolute garbage, and it only took a few years for them to start decaying and become areas of utter social and economic horror.

Grenfell tower: http://www.bbc.co.uk/news/uk-40272984

Last night's fire was at one of the recently refurbished ones. One of the trends is to cover the concrete with plastic coverings. Naturally (as also seen at 'The Torch' in Dubai), such coverings can catch fire, and spread like.. well, wildfire.

Listening to some chatter last night, there was the common mistaken belief that such towers have sprinkler systems. No. Most don't, especially anything built before 1990. Even worse, the designs are such - as was the case with Grenfell tower, there is only one entry/exit.

With at least a dozen having died, I'd imagine that particular tower will be torn down, along with many others in the coming years.

A city of mid rise tower blocks
Yours truly would prefer a literal bunker by the sea - much like the picture in the top left of this page. That remains a distant hope.

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

Goodnight from London
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Yours truly is battling hard to provide the most balanced appraisal and outlook out there.


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Wednesday, 14 June 2017

Time for another rate hike

US equity indexes closed moderately higher, sp +10pts at 2440 (intra low 2431). The two leaders - Trans/R2K, settled higher by 0.7% and 0.5% respectively. VIX settled -9.1% at 10.42. Near term outlook offers a washout within the 2410/2390 zone, before the broader trend reasserts itself. The 2500s appear a given by late September.


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Summary

US equities opened moderately higher, and clawed higher all the way into the closing hour. There were new historic highs for the Dow and NYSE comp'.

Volatility was under particular pressure, with the VIX knocked lower by a very significant -9.1% to the mid 10s. Its possible we'll see a flash print of the 9s on Wednesday, but a foray to the 13/14s seems very viable before the weekend.
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Special note about tomorrow

The short-term cyclical setup favours the equity bears tomorrow, and more so, for Thursday.

If the market does see another sig' wave lower, look for many within the mainstream to blame the equity weakness to the fed raising rates. That would be a gross mis-attribution. First, the rate hike is expected. Second, the short term cyclical setup for Wed/Thursday will favour a wave to the downside.

Tomorrow will be rather interesting!

*Extra charts after 7pm EST @ https://twitter.com/permabear_uk

Goodnight from London
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