US equities saw moderate weakness overnight, and opened in minor chop mode. With sporadic 'spooky news' about Flynn, we saw some of the most dynamic intraday (not opening gap downs) action that we've seen in a very long time.
The market found support at the secondary gap zone of 2605/01, which is of course close to the psy' threshold of 2600.There was a distinct latter day recovery, on hopes the Senate will pass the tax bill this Friday evening.
To be clear, the most bearish s/t case would be a fill/tag of ALL five downside gaps to 2574/62. However, considering recent price action, anything <2600 looks overly difficult.
Volatility naturally soared on the spooky news, but notably became stuck in the mid 14s, fractionally exceeding the Nov'15th high. The key 20 threshold still looks out of range before year end. The market appears immune to 'standard' North Korean missile launches. For VIX>20, we'd need either far more severe political turmoil, or a North Korean atmospheric nuclear test.
My year end target of 2683 remains on the menu.
|A fine start to December in the metropolis|
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Goodnight from London
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