Saturday, 23 June 2018

Weekend update - US equity indexes

It was a broadly bearish week for US equity indexes, with net weekly changes ranging from -2.7% (Trans), -2.0% (Dow), -0.9% (sp'500), -0.7% (nasdaq comp', nyse comp'), to +0.1% (R2K). Near term outlook offers further downside of 2-3%


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

sp'500


The sp' saw an intra week high of 2774, but settled -24pts (0.9%) at 2754, as last week's black-fail candle played out. Underlying macd (blue bar histogram) cycle has seen a rollover, and it bodes s/t bearish into end month/early July. Basic downside target is 2718, with secondary of 2671 - the partly unfilled gap from May 9th. More broadly, big target of 2950/3047 still looks on track for late summer/early autumn.


Nasdaq comp'


The Nasdaq saw a net weekly decline of -0.7%, but with a notable new historic high of 7806. S/t bearish with the broader market. The 8000s are clearly coming this summer. The only issue is whether the 9000s might sync with sp'3K.


Dow


The mighty Dow cooled for a second week, with a net weekly decline of a significant -2.0% to 24580. S/t bearish with the main market, as trade/tariff chatter is particularly impacting the international stocks, such as CAT and BA.


NYSE comp'


The master index cooled -0.7% to 12639. Price action since mid March has been rather tight, but leaning on the upward side. S/t bearish, with big support in the 12200s.


R2K


The second market leader - R2K, managed a fractional net weekly gain of +0.1% to 1685, with a new historic high of 1708. First support is around 1650.


Trans


The 'old leader' - Transports, saw a very significant net weekly decline of -2.7% to 10773. Higher energy prices look set to be a drag on the tranny across the summer. S/t bearish with first support of 10500.



Summary

A broadly bearish week, with five indexes lower, and one fractionally higher.

The Nasdaq comp' and R2K, broke new historic highs.

The Dow and Transports are struggling on trade/tariff chatter, and higher oil price concerns.

YTD price performance...


The Nasdaq continues to lead, currently net higher for 2018 by 11.4%, the R2K +9.8%, and the sp +3.0%. The Transports is +1.5%, Dow -0.5%, with the NYSE comp' -1.3% 
 --


Looking ahead

Key earnings: CCL (Mon'), LEN (Tue'), BBBY (Wed'), NKE (Thurs'), STZ (Fri')

M - New home sales
T - Case-Shiller HPI, consumer con', Richmond fed'
W - Durable goods orders, intl' trade, pending home sales, EIA report
T - Q1 GDP (third print), weekly jobs, stress test results part'2.
F - Pers' income/outlays, Chicago PMI, consumer sent'.

As Friday will be end month, Q2, and H1, I would look for increasingly dynamic and choppy price action into the weekend.
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Friday, 22 June 2018

A mixed end to the week

US equity indexes closed a little mixed, sp +5pts (0.2%) at 2754. The two leaders - Trans/R2K, settled -0.5% and -0.2% respectively. VIX settled -5.9% at 13.77. Near term outlook offers sp'2779 on Monday, before another rollover, as 2718 remains due.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, then saw some chop, not helped as the US President was posting once more on Twitter. Equities battled upward into the afternoon, but did see some distinct weakness in the closing minutes.

Volatility was notably subdued, with the VIX settling the week in the 13s. Near term outlook offers VIX 16/17s, assuming sp'2718, whether next week, or early July.

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Thursday, 21 June 2018

Typical Thursday

US equity indexes closed broadly weak, sp -17pts (0.6%) at 2749. The two leaders - Trans/R2K, settled -0.4% and -1.0% respectively. VIX settled 14.5% at 14.64. Near term outlook offers a bounce to 2779, before resuming lower to technical necessity of 2718 next week.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, and quickly unravelled to a morning floor of sp'2748. From there, upside to 2760, a cooling wave to 2749, and then resuming upward into late afternoon.

Volatility picked up, with the VIX seeing 15.18, the highest level since May 31st. There was some latter day cooling, with the VIX settling in the mid 14s. Near term outlook offers sp'2779, before another rollover. Prime target remains sp'2718, which will likely equate to VIX 16/17s.
--

Bonus chart: China


It was another rough day for Chinese equities, settling -1.4% at 2875. Its a case of technical open air to the Feb' 2016 low of 2638, and that is another 8.2% lower.
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Wednesday, 20 June 2018

Weak Wednesday bounce

US equity indexes closed broadly positive, sp +4pts (0.2%) at 2767. The two leaders - Trans/R2K, settled +0.1% and +0.8% respectively. VIX settled -4.2% at 12.79. Near term outlook offers technical necessity of sp'2718, which should equate to VIX 15/16s.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and clawed upward to an early afternoon high of 2774. Late afternoon saw a s/t cyclical rollover, with slight cooling. Its notable that the Nasdaq comp' and R2K broke new historic highs, and are a reminder of underlying m/t super strength in the US equity market.

Volatility was naturally subdued, with the VIX melting lower, and settling in the mid 12s.
-

Bonus chart: China


The Chinese equity market also saw a weak Wednesday bounce, +0.3% to 2915. The price action so far this year is outright ugly.

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Tuesday, 19 June 2018

We're not there yet

US equity indexes closed rather mixed, sp -11pts (0.4%) at 2762. The two leaders - Trans/R2K, settled -1.7% and +0.1% respectively. VIX settled +8.4% at 13.35. Near term outlook offers minimum technical necessity of sp'2718.


sp'daily5



VIX'daily3



Summary

US equities opened broadly lower on further trade/tariff concerns. A morning low of 2743, and then bounce to 2765. Today's price action merely made for yet another lower high and lower low.

VIX saw the mid 14s, but settled in the mid 13s. Near term outlook offers sp'2718, which should equate to VIX 15/16s.

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Monday, 18 June 2018

Lower highs, lower lows

US equity indexes closed moderately mixed, sp -5pts (0.2%) at 2773. The two leaders - Trans/R2K, settled -0.2% and +0.5% respectively. VIX settling +2.7% at 12.31. Near term outlook offers sig' downside to 2734, with minimum technical necessity of 2718.


sp'daily5



VIX'daily3



Summary

Equities opened moderately lower, seeing an early floor of 2757. Once again, there was a latter day recovery, with the sp' settling just a little lower at 2773. The daily candle was a hollow red reversal, which is normally a sign of a s/t floor. However, we do have another lower high and a lower low, which is supportive of further weakness. Underlying MACD (blue bar histogram) cycle is set to turn negative on Tuesday, and that offers first opportunity of significant and sustained downside. In theory, 2734 is a magnet, with prime technical target of 2718. The latter really should be seen.

The R2K broke a new historic high, and is a reminder of underlying m/t market strength.

Volatility remains broadly subdued, with the VIX seeing the upper 13s, but settling in the mid 12s. The 15/16s look due in the immediate term.

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Saturday, 16 June 2018

Weekend update - US equity indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.32% (Nasdaq comp'), +1.24% (Trans), +0.68% (R2K), +0.02% (sp'500), -0.76% (nyse comp'), to -0.89% (Dow). Near term outlook offers cooling of 2-4%, before whipsawing back upward.


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

sp'500


The sp' broke a new multi-month high of 2791, but settled +0.02% at 2779. That notably made for a black-fail doji candle, and bodes s/t bearish. First support is basic 'technical necessity' target of 2718, with secondary of 2671. M/t outlook remains bullish, with big target of 2950/3047 by late summer/early autumn,


Nasdaq comp'


The Nasdaq climbed for a fourth consecutive week, breaking a new historic high of 7768, and settling +1.3% to 7746. S/t bearish, with big support zone of 7500/400. M/t bullish, with the 8000s clearly coming this summer.


Dow


The mighty Dow was the laggard this week, settling -0.89% at 25090. S/t bearish with the main market, soft support 24500/200 zone.


NYSE comp'


The master index settled -0.76% at 12734. S/t bearish, with big support 12500/400 zone. New historic highs >13637 look due in late summer.


R2K


The R2K climbed for a seventh consecutive week, breaking a new historic high of 1686, and settling +0.68% at 1683. S/t bearish with the main market, soft support 1630/20 zone. The 1700s look a given in July/August.


Trans


The 'old leader' - Transports, climbed for the fifth week of six, settling +1.24% at 11073. Recent weakness in oil prices especially helped on Friday. S/t bearish with the main market, but if WTIC $62s, the transports might trade flat, rather than actual sig' net weekly declines.
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Summary

A mixed week, with three indexes net higher, one effectively u/c, and two moderately lower.

The Nasdaq comp' and R2K broke new historic highs

Short term outlook offers 1-2 weeks of cooling, of around 2-4%.

The m/t outlook remains bullish, not least as the fed continue to regularly raise rates, which is bullish, especially for the financials.
--


Looking ahead 

M - Housing market index
T - Housing starts
W - Existing home sales, EIA
T - Weekly jobs, Phil' fed, FHFA house price index, leading indicators
F -
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Friday, 15 June 2018

Witchy Friday

US equity indexes ended the week on a somewhat mixed note, sp -2.8pts (0.1%) at 2779. The two leaders - Trans/R2K, settled +0.6% and -0.1% respectively. VIX settled -1.2% at 11.98. Near term outlook offers basic technical necessity of sp'2718.


sp'daily5



VIX'daily3



Summary

US equities opened moderately lower, spooked on further trade/tariff chatter. The sp' saw a morning low of 2761, before a mini ramp in mid afternoon. The closing hour saw a touch of renewed weakness.

Volatility remained broadly subdued (intra high 13.16), with the VIX settling fractionally lower in the upper 11s. Near term outlook offers sp'2718, which should equate to VIX 15/16s. That will do nothing of significance to dent the m/t equity bullish trend.
-

Bonus chart: China, monthly


With trade/tariff issues, the Shanghai comp' is currently -2.4% at 3021, the lowest level since May 2017. S/t outlook is bearish, with the 3K long-stops set to be washed out.

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Thursday, 14 June 2018

Another day of mostly chop

 US equity indexes closed a little mixed, sp +6pts at 2782. The two leaders - Trans/R2K, settled +0.1% and +0.5% respectively. VIX settled -6.3% at 12.12. Near term outlook offers weakness into the weekend, with a quad-opex target of 2755, and 2718 next week.


sp'daily5



VIX'daily3



Summary

Suffice to add, it was another day of mostly minor chop, with the sp' unable to break/hold above resistance of 2789/91. However, the Nasdaq comp' notably broke a new historic high. Volatility remained subdued, and melted to the low 12s. Near term outlook offers cooling into the weekend, and that should carry across into next week.

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Wednesday, 13 June 2018

Powell on Parade

US equity indexes closed on a somewhat weak note, sp -11pts (0.4%) at 2775. The two leaders - Trans/R2K, settled -0.8% and -0.3% respectively. VIX settled +4.9% to 12.94. Near term outlook offers sig' weakness, a quad-opex settlement around sp'2755 would be particularly natural.


sp'daily5



VIX'daily3



Summary

US equities opened in chop mode, and broadly stayed that way into the 2pm press release from Print Central. As expected, the fed raised rates 25bps to a new target range of 1.75-2.00%. Most notable, is that fed consensus is for FOUR hikes this year. This is something of a surprise, although at the start of this year, yours truly did call for four hikes.

Fed Chair Powell

Volatility remained very subdued, settling in the upper 12s. Near term outlook offers the sp'2750s, with 'minimum technical necessity' of sp'2718, and that would arguably equate to 15/16s.
--

If you think higher rates are a negative, I strongly recommend you watch the following on a loop for at least one hour.


-

Coming in 2019...



... and Dumbo is clearly bullish Disney.  
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Tuesday, 12 June 2018

Tuesday chop

US equity indexes closed somewhat higher, sp +4pts (0.2%) at 2786. The two leaders - Trans/R2K, settled +0.3% and +0.4% respectively. VIX settled -0.1% at 12.34. Near term outlook still offers a retrace to sp'2718, although today's new historic highs in the R2K and Nasdaq comp' argue against it.


sp'daily5



VIX'daily3



Summary

It was day of mostly minor chop in equity land, with the sp' trading within 2789/78. However, the R2K and Nasdaq comp' both broke new historic highs, and are a reminder of underlying m/t strength.

Volatility was naturally subdued in the 12/11s, settling -0.1% at 12.34.
-

Bonus chart: Germany, monthly


The DAX is currently net higher for June by 1.9% at 12842. Note the divergence in the macd (black line) between spring 2016 and Jan'2018. For now, price momentum does favour the German bears, new historic highs will not be easy. The '5 wave counters' could justifiably call a mid/long term top from the Jan' high of 13596. NIRP from the ECB is certainly not helping, least of all, for the systemic risk to the EU, that is Deutsche Bank.
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Monday, 11 June 2018

Starting positive

US equities began the week on a slightly positive note, sp +3pts (0.1%) at 2782. The two leaders - Trans/R2K, settled +1.0% and +0.1% respectively. VIX settled +1.4% at 12.35. Near term outlook offers Tuesday weakness as low as sp'2760, with a more broader target of 2718.

sp'daily5



VIX'daily3



Summary

US equities began the week on a positive note, and after some fractional chop, clawed upward into the early afternoon to sp'2790 - the highest level since March 13th. The closing hour saw some moderate cooling to settle at 2782. The s/t cyclical setup for Tuesday is bearish, although we could certainly open higher on a Trump/Kim deal.

Volatility was itself very subdued, with the VIX settling fractionally higher in the mid 12s. A burst to the 15/16s is a valid threat, not least as the fed are set to raise rates.
--

Bonus chart: China, monthly


Chinese equities are still leaning on the weaker side, breaking a new low for the year of 3037. Clearly, if psy' 3K is lost, that'd lead to some mainstream concern, and spiral things somewhat lower.

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