Wednesday, 21 February 2018

Six years

US equity indexes closed on a very weak note, sp -14pts at 2701. The two leaders - Trans/R2K, settled +0.3% and +0.1% respectively, but way below earlier highs. VIX settled -2.8% at 20.02. Near term outlook offers a retrace to 2670/60s. There is a risk this will be greatly exceeded, as the mainstream are using the excuse of higher yields to panic.




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sp'daily5



VIX'daily3



Summary

US equities opened a little higher, and battled to build moderate gains into the afternoon. The Fed' minutes appeared at 2pm, and the algo-bots initially spiked the market to a new intraday high of 2747. However, as bond yields climbed, the mainstream used it as another excuse to panic.The sp' saw a mini implosion, swinging 46pts lower to settle at 2701.

Volatility naturally had a mixed day, crushed lower to a new cycle low of 16.97, but then seeing a mini ramp, to settle just above the key 20 threshold.

To be clear... a short term retrace does seem underway from last Friday's high of sp'2754. I'm looking for the 2670/60s, but its possible we will see a few days of sig' weakness beyond that, to come close to testing the recent key low of 2532.
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Six years

Feb'22nd will mark six years since I started regular online postings about the world's most twisted casino.

As well as my mini legion of paying subscribers, I do also want to thank a few of those people who first linked back to me in 2012, not least Chartrambler, Joe McVerry, and 'Albertarocks'. There are others, some of whom are still listed within my blog links lists.

Things have greatly changed here, since I took my intraday posting to a subscription basis in May 2016. I still endeavour to provide something useful here... if only a couple of charts with a few short paragraphs.

I have long intended to 're-brand' both my public and private sites to something that better describes me. In that... I've failed. I'm frankly... just exhausted. For the moment, the quirky online moniker of 'Permabear Doomster' still lives... but it (hopefully) won't be around forever.
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Open day Thursday?

I'm having technical problems with the server that hosts my subscription site. I might just post everything here tomorrow. We'll see.

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London

Tuesday, 20 February 2018

Leaning weak

US equity indexes closed broadly weak, sp -15pts at 2716. The two leaders - Trans/R2K, settled -1.5% and -0.9% respectively. VIX settled +5.9% at 20.60. Near term outlook offers cooling to around sp'2670, which would likely equate to VIX 25/30. M/t outlook remains bullish, with big target of 2950/3047, where things will get real interesting.


sp'daily5



VIX'daily3



Summary

It was a day of moderate chop, opening lower to sp'2717, recovering to 2737, but then breaking a new low in the afternoon of 2706. Volatility remains relatively elevated, with the VIX settling above the key 20 threshold. Further cooling to around sp'2670 is due within days, and that should equate to VIX within 25/30 zone.

To be clear, I do NOT expect 2532 to be broken, before a push to big target of 2950/3047 zone, where they are many key aspects of resistance. That will clearly take some months to play out.
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Bonus chart: TLT, monthly


The bond bulls should be very concerned at what is a decisive break of the multi-year upward trend. Inherently, a fall in bond prices leans to higher equity prices. Further, I would look for direct capital flows out of bonds and into equities.

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Saturday, 17 February 2018

Weekend update - US equity indexes

It was a powerfully bullish week for US equity indexes, with net weekly gains ranging from 5.3% (Nasdaq comp'), 4.3% (sp'500), 3.8% (R2K), to 3.6% (Trans). Near term outlook offers a retrace of 2-3%, but then resuming upward across March. More broadly, next big upside target is the sp'2950/3047 zone.


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

sp'500


The sp' saw a powerful net weekly gain of 112pts (4.3%) to settle at 2732, with a Friday peak of 2754. Note the weekly 10MA, which the market settled under for a second consecutive week.

Best guess: s/t cooling of 2.5% to around 2670, before swinging back upward across March. Big target remains the 2950/3047 zone, where the market will be extremely prone to becoming stuck. Considering the recent correction of 11.8%, the next bearish wave could be expected to be somewhat bigger, on the order of 15/20%. Again though, any subsequent rebound would likely be equally strong. The year end target of 3245 still looks good.

Equity bears have nothing to tout unless a bearish monthly close. For yours truly, this would equate to a monthly settlement under the monthly 10MA. That currently stands at 2574, and is rising by 30/40pts a month. It is possible we will see such a monthly close this summer, but I would expect a fast rebound within the following 1-2 months. The price action from summer/autumn 1998 is a good example.
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Nasdaq comp'


Tech is leading the way back upward, seeing a very powerful net weekly gain of 5.3% to 7239. S/t cooling to 7100/7000 looks due, before resuming upward across March. The 8000s look very viable by mid year.


Dow


The mighty Dow rebounded by 1028pts (4.25%) to 25219. S/t cooling of 500/600pts looks viable within the near term, before resuming upward to break new historic highs in the spring/early summer.


NYSE comp'


The master index gained a very significant 3.8% to 12874. Near term outlook offers some cooling of around 2%, before resuming upward. New historic highs (>13637) look very probable within 2-3 months, with the 14000s viable this summer.


R2K


The second market leader - R2K, gained 4.45% to 1543. Half of this week's gains could be eroded within 3-5 days, but then resuming upward into March. New historic highs (>1615) look very viable by late spring, not least if rates are raised March 21st (bullish financials) and if WTIC (bullish energy stocks) is close to the psy' $70 threshold. Right now, 'R2K @ 2K' still looks out of range until spring/summer 2019.


Trans


The 'old leader' - Transports, rebounded by a very significant 3.6% to 10502. S/t cooling of 200/300pts appears probable, before resuming upward with the rest of the market. Its notable that higher WTIC/fuel prices will be a significant downward pressure on the transportation stocks. However, US growth should be enough to negate this factor, although the Trans will likely lag the rest of the market across this year.
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Summary

A powerfully bullish week for all six of the main indexes.

Tech is leading the way upward, whilst the Transports is the laggard.

The recent downside was powerful, but the rebound is equally so, and indicative that US equities still retain underlying super strength. That view will be fully confirmed if the majority of indexes can break new historic highs in late spring/early summer.

Equity bears have nothing to tout unless most indexes see a bearish monthly close. Even then, I'm highly inclined to see that as just a washout, in the style of 1998 or 1987.  
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Looking ahead

There is very little on the schedule, within what is a 4 day trading week...

M - CLOSED
T - -
W - Existing home sales, FOMC mins (2pm)
T - Weekly jobs, leading indicators, EIA
F - -

*there are just a few fed officials on the loose, notably Dudley (Thurs'/Fri')
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Enjoy the three day holiday weekend
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*the next post on this page will likely appear 6pm EST on Tuesday.

Friday, 16 February 2018

Short term top

US equity indexes closed moderately mixed, sp +1pt at 2732. The two leaders - Trans/R2K, settled -0.5% and +0.4% respectively. VIX settled +1.7% at 19.46. Near term outlook offers a basic retrace of 2.5% to around sp'2670. More broadly, big target remains the sp'2950/3047 zone.


sp'daily5



VIX'daily3



Summary

US equities opened in minor chop mode, but then built moderate gains into late morning, breaking a new cycle high of 2754, some 222pts (8.8%) above last Friday's low. Pretty incredible. The 2754 high does appear to be a short term top, with the sp' seeing distinct cooling to fractionally negative in the afternoon.

Volatility opened fractionally higher, but cooled into the 12pm hour. With equities cooling in the afternoon, the VIX swung significantly upward.

Best guess: equity cooling to around sp'2670, which should see the VIX back in the 25/30 zone. More broadly, m/t bullish, with big target of sp'2950/3047 by late spring/early summer. Then things will get 'really interesting'.
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Sunshine to conclude a powerfully bullish week

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Thursday, 15 February 2018

A fifth day of gains

US equity indexes closed broadly higher, sp +32pts (1.2%) at 2731. The two leaders - Trans/R2K, settled higher by 0.7% and 1.0% respectively. VIX settled -0.7% at 19.13. Near term outlook offers chop into the opex/3 day weekend. A test near/at the recent sp'2532 low remains a high threat into end month.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, saw an early high of 2717, and then cooled back to around u/c. Yet again, the buyers appeared, pushing strongly upward into the afternoon. Today's high of 2731.51 is notably 198.82pts (7.8%) above last Friday's low.

Volatility saw a mixed day, seeing a high of 20.66, but settling lower for a fifth consecutive day in the low 19s. Considering a 3 day holiday weekend is ahead, the VIX will likely see further cooling on Friday.
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Bonus chart: Germany, monthly


With 9 trading days left of February, the DAX is currently -6.4% at 12346, notably still under the key 10MA. The German market is central to the EU, and how it settles the month should be seen as very important. Cyclically, its looking ugly, as a bearish MACD cross is due.
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Sunny skies for the equity bulls
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Goodnight from London
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Wednesday, 14 February 2018

Temporal inflation hysteria

US equity indexes closed broadly higher, sp +35pts (1.3%) at 2698. The two leaders - Trans/R2K, settled +1.0% and +1.8% respectively. VIX settled -22.9% at 19.26. Near term outlook offers the sp'2710/20s, which is where we'll likely get stuck. A re-test at/near last Friday's low of 2532 is on the menu next week.


sp'daily5



VIX'daily3



Summary

In pre-market, the sp' was higher by around 13pts. Then the CPI data was released - m/m +0.5%, the algo-bots freaked out, and swung the market to -35pts or so. By the time the market did open, declines only amounted to -10pts. Once again, there was a distinct turnaround, with the sp' settling significantly higher.

Volatility saw a spike in pre-market to 25.72, but then melted across the day, settling back under the key 20 threshold for the first time since Feb'2nd.
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Rate hikes and inflation


The market is currently expecting 2-3 hikes this year. Yours truly is holding to 4 hikes.This morning's pre-market reaction to the notion of higher inflation is a sign the mainstream are still very twitchy. Ironically, this is the same mainstream that have been seeking inflation >2.0% for around a decade.

Ohh, and to be clear, if the Fed don't raise rates this March 21st, that would merit provisional alarm bells. For the moment, I still think they will, but each point lower in the sp'500... will lower the probability.

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Tuesday, 13 February 2018

Yet another turnaround Tuesday

US equity indexes closed on a somewhat positive note, sp +6pts at 2662. The two leaders - Trans/R2K, settled +0.8% and +0.3% respectively. VIX settled -2.5% at 24.97. Near term outlook offers further upside of 1.5-2.0%, then things get real tricky for the bulls, as a re-test of the hyper-spike low of 2532 is probable.


sp'daily5



VIX'daily3



Summary

US equities saw a day of moderate swings, seeing an early low of 2637, but then battling upward into the afternoon. The daily gain is just part of a rally that will likely take the sp' back into the low 2700s. The 50dma - currently at 2720, will offer prime resistance.

Volatility saw an opening high of 27.82, but then melted lower across the day, settling in the upper 24s. Further cooling to near the key 20 threshold looks due within the next few days, before a probable swing back to around 30/35.
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Bonus chart: Japan, monthly


The Nikkei is currently net lower for the month by a powerful -8.0% at 21244. Any sustained price action <21k would be a break of key support, and would merit alarm bells. If the BoJ are going to spool up the printers, now would be the time.

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Monday, 12 February 2018

Multi-day bounce

US equity indexes closed significantly higher, sp +36pts (1.4%) at 2656. The two leaders - Trans/R2K, settled +1.6% and +0.9% respectively. VIX settled -11.9% at 25.61. Near term outlook offers further upside into the low sp'2700s, where things start to get complicated.


sp'daily5



VIX'daily3



Summary

US equities opened significantly higher, and after a cooling wave (almost to break even), resumed strongly upward. Today gives strong confirmation that last Friday saw a key low of sp'2532. The low 2700s seem a given by Thurs/Friday. Things will get increasingly tricky, with many aspects of resistance from the 2700s upward. We also have two upside gaps in the 2800s.

It was a mixed day for volatility, seeing an early low in the 26s, then swinging to the 29s, before further cooling to the 24s. What is perhaps most notable about the VIX lately, are not the recent hyper spike highs, but that its sustainably elevated. Just consider that last year only saw the 17s.

The next few days should favour the equity bulls, but lets be clear... there is a threat of something much more severe into March. More on that in a few days, once we're in the 2700s.
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Ray of light... for the bulls

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Saturday, 10 February 2018

Weekend update - US equity indexes

It was an exceptionally bearish week for US equity indexes, with net weekly declines ranging from -5.2% (SP'500, Dow, NYSE comp'), -5.1% (Nasdaq comp', Trans), to -4.5% (R2K). Near term outlook offers renewed broad upside, with big target of sp'2950/3047 by early summer.


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

sp'500


The sp' is currently net lower for February by -204pts (7.2%), currently at 2619. The key 10MA is at 2563, and was briefly broken under during the Friday session, for the first time since Nov'2016. Underlying MACD (blue bar histogram) cycle is ticking lower, but even at the current rate, a bearish cross is out of range until at least April.

Best guess: renewed upside, with big target of 2950/3047 by the early summer. Considering recent price action (a correction of 11.8%), if the market does get stuck around 3k, the next correction could justifiably be expected to be larger, on the order of 15/20%. More broadly, the year end target of 3245 still looks rather good.

Equity bears have nothing to tout unless we see a  bearish monthly close. For yours truly, that would equate to a monthly close under the monthly 10MA. That is currently at 2563, and climbing by around 35pts a month. On some reflection, its possible we might see such a bearish monthly close, but still hyper whipsaw back upward. A good example is 1998...


Note the spike high of 1190 in July, settling moderately red. August saw a massive washout, September was choppy, whilst October saw a hyper spike floor from a marginally lower low. The market then resumed powerfully upward into year end. That kind of pattern is something to keep in mind, if we do get stuck <3047 later this year.
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Nasdaq comp'


The tech is currently -7.2% for February. Friday saw the key 10MA fractionally broken, but we settled the week at 6874. The RSI has cooled from almost 90, back <70. Despite the powerful swing from 7505 to 6630, the broader outlook remains unchanged. The 8000s still seem viable this spring/early summer, with 9000s for year end.


Dow


The mighty Dow is currently net lower for the month by -1958pts (7.5%) at 24190. Unlike some other indexes, the Dow hasn't tagged the key 10MA. Note the upper bollinger in the 25800s. Keep in mind the key 2.6x Fibonacci extrapolation number of 26702. Any price action >26800s would be decisive, and offer next big target of 34/35k. Clearly, that is out of range until well into 2019.


NYSE comp'


The master index is currently -7.2% at 12405. The key 10MA was tested, and we're seeing initial signs of a spike floor. For some bullish confidence, a Feb' settlement >12900/13k would be useful.


R2K


The second market leader is currently -6.2% for the month, at 1477, having spiked from 1436. Indeed, there is major price support around 1450. The equity bulls should be seeking a monthly close >1530/40s.


Trans


The old leader - Transports, is currently net lower for the month by a powerful -7.6% at 10136. The key 10MA was briefly traded under on Friday. Equity bulls should be seeking a Feb' close >10600/700s.
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Summary

All US indexes have seen the most bearish price action since Jan'/Feb 2016

Technicals - such as RSI, have greatly cooled from multi-decade/historic highs.

Equity bears still have nothing to tout unless the majority of indexes see a monthly settlement under their respective key 10MAs.
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Looking ahead 

Notable earnings from AMAT, CSCO (Wed'), and DE (Fri').



... along with a fair amount of econ-data this week...

M - US T-budget
T - -
W - CPI, retail sales, bus' invent', EIA report
T - Weekly jobs, phil' fed, PPI, empire state, indust' prod', housing market indx.
F - Housing starts, import/export prices, consumer sent' *OPEX*
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Have a good weekend
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*the next post on this page will likely appear 6pm EST on Monday.

Friday, 9 February 2018

Spike floor from the 200dma

US equity indexes closed significantly higher, sp +38pts (1.5%) at 2619 (range: 2532/2638). The Dow and Nasdaq comp' both gained 1.4%. The two leaders - Trans/R2K, settled -0.2% and +0.9% respectively. VIX settled -13.1% at 29.06. Near term outlook offers initial upside to the sp'2720/30s.


sp'daily5



VIX'daily3



Summary

US equities opened positive, but then took yet another powerful swing lower, breaking yesterday's low, and spiralling downward. The 200dma was taken out, but then the market saw a spike floor of 2532, and then began to battle choppily upward. There was a late afternoon surge upward, settling +1.5% at 2619, a very significant 87pts above the low.

Volatility was itself very volatile, with the VIX hitting the 41s, but then rapidly cooling as equities hyper spiked. The weekly close in the 29s still makes for a very elevated VIX.

Preliminary thoughts on next week: a basic 2-3% of upside, as the bears get ground out, with the old 'dip buyers' starting to return. 
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Bullish UV light.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
 --
 *the weekend post will appear Sat'12pm, and will detail the US equity indexes.

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Thursday, 8 February 2018

Ugly Thursday

US equity indexes closed powerfully lower, sp -100pts at 2581, notably breaking the Tuesday morning low of 2593. Dow -1032pts (4.1%) at 23860. Nasdaq comp' -274pts (3.9%) at 6777. The two leaders - Trans/R2K, settled -3.8% and -2.9% respectively. The VIX settled +20.7% at 33.46.


sp'daily5



VIX'daily3



Summary

US equity indexes opened a little choppy, but then started to slide... and just kept on falling. It was frankly... a damn ugly day, with the sp' breaking the Tuesday morning low of 2593, settling at 2581. This is 291pts (10.1%) below the Jan' high of 2872. We're seeing a main market correction for the first time since Jan/Feb'2016.

With equities powerfully lower, volatility naturally picked up. However, its notable that the VIX settlement in the 33s, is way below the Monday afternoon high of 46.34. Its one of a number of divergences, that subtly suggest that the most bearish equity downside was on Monday afternoon.

I can understand if some are getting seriously spooked, and wondering if we're in some kind of far larger crash wave. All of this... sparked by mainstream chatter about average earnings +2.9%, and the US 10yr >2.80%. I will add, even yours truly is starting to get just a little bit twitchy.
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Bonus chart: China, monthly


The Shanghai comp' is currently -6.3% at 3262, the lowest level since Aug'2017. Are the PBOC on holiday or something? China bulls should be desperate to see a recovery to at least settle February above the 10MA in the low 3300s.

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Goodnight from London
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