Thursday 30 April 2020

April settles

US equity indexes closed broadly weak, sp -27pts (0.9%) at 2912. Nasdaq comp' -0.3%. Dow -1.2%. The Transports settled -2.9%.

sp'daily5



VIX'daily3



Summary

US equities opened on a weak note, and leaned weak into the afternoon, with the SPX printing 2892.

Meanwhile...


The Cramer touted... "Its embarrassing, its ridiculous, its necessary". On a positive note, the Cramer is at least right about the first two. Further, he was one of the first in late Jan/early Feb' who did recognise the looming Corona problems... even noting his canned goods stockpile.

The late afternoon saw a moderate recovery, as the sp'3000s remain viable, before another swing lower. Volatility picked up, the VIX settling +9.3% to 34.15.
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April ends with sunshine and showers

Full moon will be May 7th
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Wednesday 29 April 2020

Fed day gains

US equity indexes closed powerfully higher, sp +76pts (2.7%) at 2939. Nasdaq comp' +3.6%. Dow +2.2%. The Transports settled +2.6%.

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VIX'daily3



Summary

The day began on a curiously 'convenient' note. Q1 GDP data was due at 8.30am, but instead... news appeared about Gilead Sciences (GILD).


Incredibly, Liesman of CNBC argued the GDP news wasn't important relative to the Remdesiriv. Around 8.38am, the first print of Q1 GDP appeared... and it was a real ugly -4.8%. As things are, Q2 is likely to come in around -30% or so. So... it will officially be a recession... if not arguably depression.

US equities opened very significantly higher, and built powerful gains into the early afternoon.

Interesting note...


Kostin is seeking the 2400s, which is only a few percent yours truly.. who has minimum downside of the mid 2300s. For now.. a latter year recovery looks a stretch.. even if more stimulus bills are passed.
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The Fed was a broadly non-event, with the market settling powerfully higher.

Volatility melted lower, the VIX settling -7.0% to 31.23.   
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Tuesday 28 April 2020

Leaning weak ahead of the fed

US equity indexes mostly closed weak, sp -15pts (0.5%) at 2863. Nasdaq comp' -1.4%. Dow -0.1%. The Transports settled +1.1%.

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VIX'daily3



Summary

The US equity market opened at 9.30am EST, and closed at 4.00pm EST.
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*I believe the above comment doesn't contravene any of the policies from Google/Alphabet (GOOGL), in relation to recommendations from the World Health Organisation (WHO), aka the medical/public relations arm of the Chinese Communist Party (CCP).

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Monday 27 April 2020

The shameful PPP loans

US equity indexes began the week on a significantly positive note, sp +41pts (1.5%) at 2878. Nasdaq comp' +1.1%. Dow +1.5%. The Transports settled +2.8%.

sp'daily5



VIX'daily3



Summary

US equities opened on a positive note, helped by most other world markets, with price leaning upward into midday.

On the lunchtime show...


Gundlach appeared, noting he is scaling back into an SPX short. He does not believe any price action >3K is likely, and appears open to seeing an eventual break under the March low of 2191. Yours truly has minimum downside target of the mid 2300s.

The afternoon saw considerable chop, but managing a new cycle high in the closing hour.

Volatility was in melt mode, the VIX settling -7.3% at 33.29.


The shameful PPP loans

The Cramer was dismayed at a story in the weekend press on who was receiving the emergency government loans... which included Carnival (CCL).



On this matter... I'm 100% in agreement with the Cramer.
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Bullish spring green
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Saturday 25 April 2020

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -1.9% (Dow), -1.7% (NYSE comp' and Transports), -1.3% (SPX), to -0.2% (Nasdaq comp').


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

sp'500


The sp'500 saw considerable chop within 2727-2868, settling -37pts (1.3%) at 2836. Momentum ticked upward for a third week, and at the current rate is due to turn positive at the May 4th open. However, on balance, I would look for a stall around the key zero threshold. The subsequent down cycle will almost certainly be less deep, even if price marginally breaks the March low. This should also be reflected in the VIX, which should comfortably remain below the 85s.


Nasdaq comp'



Dow



NYSE comp'



Trans






Summary

All five US equity indexes settled net lower for the week.

The Dow lead the way lower, whilst the Nasdaq comp' was very resilient.

More broadly, four indexes are holding under their respective monthly 10MA, the exception being the Nasdaq comp'.



Looking ahead

Another very busy week is ahead, not least with a monster-truck load of earnings, and an FOMC. Further Corona related news headlines, by the hundred. can be expected each day.

Earnings:

M - PPG, NXPI, FFIV, KDP, CNX, AMAT

T - AMD, GLW, F, MMM, JNPR, AKAM, FEYE, MDLZ, MRK, SBUX, NUE, PFE, VALE, BYD, DHI, PEP, GOOGL, CAT, CNC, LUV, UPS, HOG, JBLU, SIRI, TAL, YUMC, SAN, NVS, HSBC

W - GE, FB, QCOM, TSLA, RIG, HAS, MSFT, NSC, YUM, HUM, EBAY, GD, MA, BA, NOC, SPOT, ANTM, VLO, CME, ALGN, APRN, NOW, DB, TDOC

T - DOW, AAPL, MGM, TWTR, GILD, X, MO, TAP, COP, LNG, BAX, AMZN, V, KHC, CMCSA, WDC, MCD, ILMN, SWK, ABMD, COG, DNKN, GNRC, CX, NOK, AMGN, UAL

F - ABBV, CVX, XOM, CLX, PSX, BRK.B, CL, HON, EL, DISH, PCG
-

Econ-data:

M - Dallas Fed' manu' survey
T - Intl' trade, Case-Shiller HPI, consumer conf', Richmond Fed' manu'
W - Q1 GDP (print'1), pending home sales, EIA Pet' report

FOMC announcement (2pm), with a press conf' at 2.30pm. I would imagine questions will be taken via the phone. No change in rates can be expected. An update on QE can be expected.

T - Weekly jobs, pers' income/outlays, CPI, Chicago PMI, Fed' bal' sheet (4.30pm)
F - PMI/ISM manu', construction

*As Thursday is end month, I would expect more dynamic price action, on higher volume.
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Sunset in the city of mass hysteria

Final note

Net weekly declines, but in the scheme of things, it doesn't give any s/t clarity. Another burst upward still appears a threat, before a seemingly inevitable retrace/cooling wave. The mainstream cheerleaders appear resigned to 2600/500s, but yours truly is seeking (at least) the mid 2300s.

May is often a problematic month for equities, and even if we do print the 2900s within 1-2 weeks, that won't preclude the 2600s or lower, by end May.

The ultimate issue... how fast will the economic recovery be? If you assume Q2 GDP will be -30%, even a 15% recovery in Q3 will still make for a horrific net decline, as of the start of Q4.

The US/global economy has a very tough summer ahead, but that should offer many trading/investment opportunities... within the twilight zone.
-

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Have a good weekend
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*the next post on this page will likely appear 5pm EDT on Monday.

Friday 24 April 2020

Positive chop into the weekend

US equity indexes ended the week on a positive note, sp +38pts (1.4%) at 2836. Nasdaq comp' +1.6%. Dow +1.1%. The Transports settled +1.8%.

sp'daily5



VIX'daily3



Summary

US equities opened a little higher, but the gains were shaky, with indexes turning fractionally lower. The market saw a secondary wave upward into the late afternoon to sp'2842.

Volatility was in melt mode, the VIX settling -13.2% to 35.93.
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Another trading week settles

Cruising into the sunset

Summer is near
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Thursday 23 April 2020

Thursday swings

US equity indexes mostly closed fractionally mixed, sp -1pt (0.05%) at 2797. Nasdaq comp' -0.01%. Dow +0.17%. The Transports settled +1.4%.

sp'daily5



VIX'daily3



Summary

Equities opened on a positive note, and battled until in the 12pm hour. Details of a Gilead Sciences (GILD) study on Remdesivir saw a significant swing lower.

The afternoon saw considerable chop, leaning on the weaker side, with the SPX settling fractionally negative.

Volatility was itself a little choppy, settling -1.4% at 41.38. The s/t cyclical setup favours the bears, and it could be expected, we should see some degree of 'rats selling into the weekend', as the lockdown continues.
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Another sunset closer to summer
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Wednesday 22 April 2020

Midweek bounce

US equity indexes mostly closed very significantly higher, sp +62pts (2.3%) at 2799. Nasdaq comp' +2.8%. Dow +2.0%. The Transports settled -0.1%.

sp'daily5



VIX'daily3



Summary

US equities opened significantly higher, helped via rebounding European markets and WTIC. Price leaned upward into the afternoon to 2815, with moderate cooling in the final ten minutes.

Volatility was in cooling mode, the VIX settling -7.5% at 41.98.
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Today's departure... partly funded by the BoJ

Sunset in the capital of mass hysteria
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Tuesday 21 April 2020

Blaming the bears

US equity indexes closed powerfully lower, sp -86pts (3.1%) at 2736. Nasdaq comp' -3.5%. Dow -2.7%. The Transports settled -1.6%.

sp'daily5



VIX'daily3



Summary

US equities opened very significantly lower, pressured by other world markets, and ongoing turmoil within the oil market.

Meanwhile...


It would seem the US Govt' will also bailout the energy sector, at least to some extent. I'd still expect some of the mid/small tier listed names to disappear, such as NBR, DO, CHK, and probably.. RIG.

The afternoon saw considerable chop, leaning rather weak.
Volatility picked up, the VIX settling +3.6% at 45.41.


Blaming the bears

In Monday evening's Corona press conf', the US President blamed the collapse in WTIC on the commodity bears.


It has long been the case that Trump has taken issue with those on the short side. Even as early as the election rallies in 2016, Trump would occasionally take a few swipes at anyone 'bearish USA'.

I can kinda understand Trump trying to place blame, but it sure as hell doesn't lay with those shorting oil or the related energy stocks. The reality is that almost all of the US energy sector has been operating at a sustained loss for many years. All that talk about the successful US shale/fracking industry is one giant LIE. 

I expect more such 'blame the bears' talk from Trump in the weeks and months ahead. They are an easy target, and some in the mainstream will gladly play along with that notion, rather than face the reality that the US energy sector simply isn't competitive to the rest of the world.
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Sunset in the city of mass hysteria
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Monday 20 April 2020

Monday Madness in WTIC

US equity indexes closed very significantly lower, sp -51pts (1.8%) at 2823. Nasdaq comp' -1.0%. Dow -2.4%. The Transports settled -3.2%.

sp'daily5



VIX'daily3



Summary

US equities opened very significantly lower, and after an attempt that saw the SPX come close to turning positive, there was renewed weakness into the late afternoon, pressured by the bizarre price action in WTIC.

Indeed it was a case of Monday madness for WTIC, with the May contract (which settles Tuesday, 2.30pm EST), at -$37.63.


Indeed, it was a truly incredible and historic day in commodity land, and it will make for some sideline entertainment to see how the May contract settles Tuesday afternoon.

Volatility picked up, the VIX settling +14.9% at 43.83. I would note the break above s/t declining trend, and that argues against the notion of the sp'2900s.
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Your views...


Pretty evenly split.


A clear majority don't expect new historic highs this year.



Indeed, 46% believe the low is in. Only 11% expect a broad collapse. For the record, I would be surprised if we don't at least challenge the 2100/2000 zone, and in theory, that should be within 2-3 months.
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It was just another day... in the twilight zone.

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