Saturday, 18 May 2019

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -2.4% (R2K), -1.3% (Nasdaq comp'), -1.0% (NYSE comp', Transports), -0.8% (SPX), to -0.7% (Dow).


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

sp'500


The SPX saw a second consecutive net weekly decline, settling -21pts (0.8%) to 2869. MACD (blue bar histogram) cycle ticked lower for a third week. At the current rate, a bearish macd cross will be seen in the week commencing Tue' May 28th. The last such cross (Oct'2018) didn't work out so well for the bulls.

First major support is the 200dma of 2776. The equity bears need a bearish monthly settlement to have any real confidence. Right now, (under my criteria), that will require May to settle <2790s. Its clearly not that far down, and technically... the daily/weekly setup favours it
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Nasdaq comp'


The Nasdaq cooled for a second week, settling -100pts (1.3%) to 7816. Note the weekly RSI of 55s. Bears need to see a break under <50 to have confidence of 'interesting things' in June/July.


Dow


The mighty Dow was the most resilient index this week, settling -178pts (0.7%) to 25764. A bearish macd cross will be due at next week's open, and that is to be seen as a problem for the m/t equity bulls. First support 25200/000 zone, with secondary of 24500/400s.


NYSE comp'


The master index settled -130pts (1.0%) to 12657. Due a bearish macd cross within 1-2 weeks, which is a problem for the m/t equity bulls. The more cautious bulls would wait to chase above the Sept'2018 high of 13261. Gundlach is watching this index more than anyone.


R2K


The second market leader lead the way lower this week, settling -37pts (2.4%) to 1535. Due a bearish macd cross within 1-2 weeks.


Trans


The 'old leader' - Transports, cooled for the third week of four, settling -110pts (1.0%) to 10491. Due a bearish macd cross within 1-2 weeks. Big support psy'10k, with secondary of the 9800s.



Summary

All six of the main US equity indexes were net lower for the week.

The R2K is leading the way lower, with the Dow somewhat resilient.

Weekly price momentum is swinging back toward the equity bears. The technical setup for the remaining nine trading days of May is pretty bearish.

YTD price performance:


The Nasdaq comp' remains the market leader, currently net higher for 2019 by 17.8%. The Transports are +14.4%, the SPX +14.1%, and the R2K +13.9%. The NYSE comp' is +11.3%, with the Dow trailing, but still higher by a respectable 10.4%.
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Looking ahead 

Earnings:

M - 
T - HD, JCP, URBN, KSS, JWN, TOLL
W - TGT, LOW, LB, ADI
T - BBY, AMTD, HPQ, SINA
F - FL


Econ-data:

M -
T - Existing home sales
W - EIA Pet' report, FOMC mins' (2pm)
T - Weekly jobs, new home sales
F - Durable goods orders.

*As Monday May 27th is CLOSED for Memorial day, price action on the preceding Friday May 24th, can be expected to be very subdued.
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--

*the next post on this page will likely appear 5pm EDT on Monday.

Friday, 17 May 2019

OPEX swings

US equity indexes closed broadly weak, sp -16pts (0.6%) at 2859. Nasdaq comp' -1.0%. Dow -0.4%. The two leaders - Trans/R2K, settled -1.1% and -1.4% respectively.

sp'daily5



VIX'daily3



Summary

Equities opened moderately weak, tagged the gap zone of sp'2855/50, and then swung back upward to minor gains (intra high 2885). The late afternoon saw a rather classic case of 'rats selling into the weekend', as many s/t bulls are (understandably) twitchy about holding overnight/across the weekend.

Volatility was pretty subdued, with the VIX seeing a (cash market) opening high of 16.57, but then melting back lower to settle +4.4% at 15.96.

Goodnight from London
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Thursday, 16 May 2019

A third day higher

US equity indexes closed broadly higher, sp +25pts (0.9%) at 2876. Nasdaq comp' +1.0%. The two leaders - Trans/R2K, settled +1.2% and +0.6% respectively. Friday OPEX should lean to the bears.

sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and built strong gains into the early afternoon. The afternoon saw some choppy cooling, especially within the closing hour, but it still made for a third consecutive net daily gain.

Volatility was ground lower, with the VIX printing 15.16, and settling -7.0% at 15.29. The s/t cyclical setup will favour the equity bears for Friday OPEX, with the sp'2850s very much within range.
--

More lucky people fleeing the UK

Sunny... but chilly.
--
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Goodnight from London
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Wednesday, 15 May 2019

Midweek swings

US equity indexes closed broadly higher, sp +16pts (0.6%) at 2851. Nasdaq comp' +1.1% The two leaders - Trans/R2K, settled +0.2% and +0.3% respectively. Near term outlook offers yet another cooling wave ahead of Friday opex.

sp'daily5



VIX'daily3



Summary

US equities opened moderately weak, but saw a significant upward swing to moderate gains, as it was reported the US would delay tariffs on EU auto imports. The afternoon saw a high of 2858, just 6pts above yesterday's high. The closing hour saw some subtle cooling, as some bulls are still too twitchy to hold overnight.

Volatility saw an opening high of 19.15, then cooled to the 16s, and settling -9.0% at 16.44.The s/t cyclical setup will favour the equity bears... not least on a Thursday.
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Koreans to the moon?

12c/53f, sunny... but it sure ain't warm.
--
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Goodnight from London
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Tuesday, 14 May 2019

Rebounding Tuesday

US equity indexes closed significantly higher, sp +22pts (0.8%) at 2834. Nasdaq comp' settled +1.1%. The two leaders - Trans/R2K, settled +1.4% and +1.3% respectively. Near term outlook offers a cooling wave.

sp'daily5



VIX'daily3



Summary

Tuesday opened moderately higher, but the gains were pretty shaky, and some stocks even turned briefly red. The morning saw increasing strength, with the market building very significant gains into the afternoon. The late afternoon saw some distinct cooling from 2852 to settle at 2834.

Volatility was ground lower, with the VIX settling -12.1% at 18.06. The s/t cyclical outlook favours the bears for a cooling wave to at least 2820.
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Meanwhile...

Here in the UK, as we're still part of the EU, yours truly will get to vote in another European election. The following arrived this morning from Change UK...


It shall forever remain ironic that all three of the main UK political parties campaigned against BREXIT in 2016. They sure didn't like the result, and did not follow through with exiting the EU in March 2019, as they repeatedly promised. Change UK is spearheading a push to see a secondary vote.... which I do see probable. A secondary vote would see the UK populace vote against any deal to leave.
--

Another lucky group departing

Full moon this Saturday

With NASA stating a pretty clear 'we are going...'



(voice-over by none other than Capt' Kirk.. aka.. Shatner). 2024 really isn't that far away. Between now and then, a great many launches from (amongst a fair number of others) NASA, SpaceX, Blue Origin, Ariannespace, India, even Israel.
--

... almost warm.
--
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Goodnight from London
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Monday, 13 May 2019

Irrelevant trade tariffs

US equity indexes closed powerfully lower, sp -69pts (2.4%) at 2811. Nasdaq comp' -3.4%. The two leaders - Trans/R2K, settled -2.8% and -3.1% respectively.

sp'daily5



VIX'daily3



Summary

US equities opened significantly lower on yet more trade concerns. Ongoing trade chatter from Trump, and early morning news of China retaliatory tariffs didn't help, with the market spiraling lower across the morning and continuing into mid afternoon.

Volatility picked up, with VIX 21.32, and settling +28.1% at 20.55. However, that was notably far below the early Thursday high of 23.38.


Irrelevant trade tariffs

China announced new/updated tariffs on 2,493 of US goods, set to begin June 1st. 

2,493 @ 25%
1,078 @ 20%
974 @ 10%
595 items to remain @ 5%

The early morning headline was 'Tariffs on $60bn of goods', but lets be clear, we're really only talking about (at most) around $10bn of increased tariffs.

Sorry, but the numbers we're dealing with are entirely IRRELEVANT for a $20 trillion US economy. Yes, some individual companies will have significant issues, but for most... its a non-issue.

The mainstream have little to no perspective on this, although that in itself shouldn't be surprising. If you think trade tariffs are the 'key to this market or economy', you're looking in the wrong direction.

I would accept there are secondary issues, not least one of confidence. Economic and market CONfidence is a very important issue, and its one reason why we've cooled from sp'2954 to 2801. For now, the US/China trade war is arguably just a skirmish, and I still expect an eventual agreement.

Until I see a bearish monthly close (most indexes settling under the monthly key 10MA) and a rate cut, I continue to see any cooling waves as such.
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How much is the tariff on this one?

A moment of peace

Full moon is just after opex, this Saturday
--
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Goodnight from London
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Saturday, 11 May 2019

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -3.2% (Trans), -3.0% (Nasdaq comp'), -2.5% (R2K), -2.2% (SPX), -2.1% (Dow), to -1.9% (NYSE comp').


Lets take our regular look at six of the main US indexes (monthly candle charts)

sp'500


The SPX saw a net weekly decline of -64pts (2.2%) to settle at 2881 (intra low 2825). More broadly, the SPX is still comfortably holding above the monthly key 10MA (2794).

Equity bears need a monthly close <2780s for a 'bearish monthly close'. Right now, that looks overly difficult. Some stocks - such as MSFT, DIS, and F, are all suggestive of at least another 3-4 months of main market upside.

Giant psy'3K is a natural and valid target this summer. The next big Fibonacci extension is 3047. I don't see that being exceeded in the ongoing wave that began late Dec'2018 from 2346, and would instead look for the market to (ideally) get stuck within the 3020/3030s.
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Nasdaq comp'


The Nasdaq comp' saw a net weekly decline of -3.0% to 7916. Whilst last week did see a new historic high, this index has some rather problematic technical divergences when seen on a grander perspective.


Dow


The mighty Dow saw a net weekly decline of -2.1% to 25942. More broadly, note the macd (blue bar histogram) cycle, which is rolling back lower, and that is a real problem for the m/t equity bulls. Technically, pretty ugly, with a monstrous RSI divergence from Jan'2018.


NYSE comp'


The NYSE comp' - the index favoured by Gundlach, was the most resilient this week, settling -1.9% to 12788. The NYSE is still holding the key 10MA, but there remains a very serious technical divergence, as especially seen on the RSI. As Gundlach himself notes, the Jan'2018 high was followed by a key lower high in Oct'2018, which has not been surpassed in the current rally. The bulls should be increasingly desperate to clear >13261.


R2K


The second market leader settled -2.5% for the week to 1572. More broadly, the R2K is just 12pts above the key 10MA. Price momentum remains outright bearish, although is slowly swinging back toward the bulls. A bullish macd cross will not be easy.


Trans


The 'old leader' lead the way lower this week, settling -3.2% to 10602. More broadly, the tranny is holding just above the 10MA. Even if the headline indexes (SPX, Nasdaq comp', Dow) can break new historic highs into the summer, the transports will likely struggle, not least if WTIC/fuel prices see another wave higher.



Summary

All six of the main US equity indexes were significantly lower for the week.

The Transports lead the way lower, whilst the NYSE comp' was relatively resilient.

More broadly, all six indexes are currently net lower for May, but all are holding above their respective monthly 10MA.

YTD price performance:


The Nasdaq comp' continues to lead, currently +19.3% for the year. The R2K is +16.6%, Transports +15.6%, and the SPX +14.9%. The NYSE comp' is +12.4%, with the Dow lagging, but still net higher by a considerable +11.2%
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Looking ahead 

Earnings...

M - TCEHY, TTWO
T - RL, TLRY
W - BABA, M, CSCO
T - WMT, NVDA, PINS, BIDU, AMAT, IQIYI
F - DE

Econ-data...

M -
T - Import/export prices,
W - Retail sales, empire state, indust' prod', busi' invent', housing market indx. EIA Pet'
T - Weekly jobs, housing starts, phil' fed
F - Consumer sent', leading indi'  *OPEX*
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Have a good weekend
--

*the next post on this page will likely appear 5pm EDT on Monday.

Thursday, 9 May 2019

Ongoing trade concerns

US equity indexes closed on a weak note, sp -8pts (0.3%) at 2870 (intra low 2836). Nasdaq comp' -0.4%. Dow -0.5%. The two leaders - Trans/R2K, settled -0.1% and -0.3% respectively.

sp'daily5



VIX'daily3



Summary

Wednesday evening saw Trump hold another rally...


... talk of 'they broke the deal' gave the algo-bots yet another excuse to whack futures lower. Equities opened broadly weak, and quickly took out the Tuesday low of 2862. Late morning saw a low of 2836, just 2pts shy of fully filling legacy gap of 2848/34. The lunchtime hour saw a powerful swing upward on more Trump trade chatter, with the afternoon seeing the SPX coming close to turning positive.

Volatility broke a high of 23.38, the highest print since Jan'4th, back when Print Central was in the early phase of threatening to end QT. VIX settled -1.5% at 19.10. The s/t cyclical setup favours the bulls for early Friday... when UBER are set to list.

--
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Goodnight from London
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Wednesday, 8 May 2019

Turbulent on trade

US equity indexes closed a little weak, sp -4pts (0.2%) at 2879. Nasdaq comp' -0.3%. The two leaders - Trans/R2K, settled -0.3% and -0.5% respectively. Near term outlook offers another swing lower, before possible trade news on Friday.

sp'daily5



VIX'daily3



Summary

The day began with pre-market trade chatter from the Trump...


... that helped give futures a kick upward, with US equities opening in moderate chop mode, and that was how it remained for the day.

Volatility remained relative elevated, seeing a high of 21.71, but settling +0.4% at 19.40.

Thursday will inherently favour the equity bears, as does the s/t cyclical setup. There is support with the 50dma at 2858, and a legacy gap of 2848/34. Its entirely possible we see down wave to the latter by late Thurs/early Friday, but still hyper surging on 'positive trade news' into the Friday close. For the record, I do expect some kind of US/China trade agreement, not that it matters to the US/global economy. There are a great many grander issues than tariffs.
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Into the unknown

Turbulent skies for a turbulent market
--
Extra charts in AH (usually around 7pm EDT) @ https://twitter.com/permabear_uk

Goodnight from London
--
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For details and the latest offers, see: permabeardoomster.com