Wednesday 15 January 2014

1pm update - chop ahead of the Fed

Market has naturally slipped into minor chop mode ahead of the Fed beige book at 2pm. Most notable today are the strong gains in WTIC Oil, +2.1%. Those equity bears still clinging to vain hopes of <sp'1800, need to simply...go away.



Little to add.

Lets see how the market reacts to the Fed book of lies and delusion at 2pm.

Considering the huge amount of QE money sloshing around out there today, and the break into the 1850s..there is little reason why we won't see a further small up wave into the close.

12pm update - another set of new highs

Most of the US indexes have broken new highs, with sp'1850s..and a weekly close is very viable in the 1860s. VIX remains crushed...and looks set to remain low until the FOMC of Jan'29. Oil has built sizable gains of 2.0%, a key weekly turn might be taking place.


USO, weekly


What to say? New index highs..just another day in market land..and no doubt..the heavy amount of QE is helping negate what little sell side/profit taking there is.

Daily, weekly, monthly charts ALL offering the 1860s in the immediate term.

By mid February, monthly max upside will be around 1910/20. Great huh?

*doesn't look like any lunch time VIX update from optionmonster. I think even they have realised there is not much to say on a VIX that is stuck between 13/11.
Notable weakness: UAL, -2.5% (probably just cooling down from the recent gains). RIG, -1.4%, I've no idea on what is up with that. Any break <$47, and then 44/43.

11am update - new highs for the two leaders

The two leading market indexes - Trans/R2K, have both marginally broke new historic highs this morning - which considering the Monday drop, is very impressive. Metals remain weak, Gold -$3, whilst Oil continues to build gains +1.5%

Trans, daily



*I will cover Oil more is possibly flooring on the bigger weekly cycle.

Without getting lost in the minor waves, we could easily see some chop into the afternoon..ahead of the Fed Beige book.

Notable mover: DRYS, +4.6%... is the BDI rebounding today as well?

Weakness in NFLX...

Looks headed for the 300/280 zone..where the 200 day MA is lurking.

11.08am...and there are the 1850s..ladies and gentleman....along with VIX in the 11s.

I guess some of that $5bn of QE is starting to kick in.

10am update - pulling away

US equities continue to pull away from the Monday low, and the sp'500 is now within just a few pts of breaking new historic highs. With heavy QE today, the bears are facing the same old problem. Metals look especially weak, Gold -$7. Oil building gains, +1.0%



The Monday low of sp'1815 is now looking a long way down, and all those touting the 1700s need to go stare at a monthly chart for the rest of this week.

VIX is broken, and looks set to remain low for at least a week or two...probably into the next FOMC of Jan'29

Notable mover: TSLA

With the break into the 170s...its pretty clear highs look very viable. So long as earnings are fine (due mid Feb), the $200s - unthinkable just a few days ago, now look possible.

*keep in mind, we have the Fed beige book later (2pm)...and market could use that as the excuse to break new highs. A weekly close in the 1860s is just about viable.

10.07am... new historic highs on the R2K..and the Trans.

The two leaders are LEADING!...headline indexes to follow.

Lets see what all those touting the 1700s have to say about that..or maybe they're on radio silent mode again.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +3pts, we're set to open at 1841. Metals are a touch weak, Gold -$4, whilst Oil is up 0.7%. Equity bulls merely require just a little follow through to the upside, to fully confirm 1815 was a near term floor.



Well, we're set to see at least a little follow through to the upside this morning, and with very heavy QE today, bears should be very concerned that we'll be breaking into the 1850s before the Friday close.

Notable early movers: TSLA +4% @ 167, AAPL +1.5% @ 554

9.22am.. sp +5/6pts..we're set to break the 1842 high...and with the QE..1850s are viable today.

TSLA just keeps on building gains, +6%

Something else I just noticed.. BAC +2.7%.. I guess earnings were fine.

9.40am.. market pulling away...1815 WAS a floor....and 1850s look due.

TSLA has cleared old resistance..and looks set for new highs. Earnings in mid-Feb had better come in at least 'reasonable'.

More teasing at the casino

Mr Market has again teased the equity doomer bears with a one day special..only to be followed by an almost complete rebound. With the daily cycles ticking back upward, it would seem the market will be breaking new index highs in the coming days..and weeks ahead.




For the equity bulls, it was just another typical rebound from a 'one day bear special'. We've seen this sort of event dozens of times across the last few years...and it is certainly no surprise to me.

Those watching the VIX...with it slipping into the 11s for the second consecutive day, should indeed come to realise that this market has ZERO fear about the near/mid term.

A brief update on two of the PIIGS

As I've been suggesting for many months, if even the ugly PIIGS of the EU are rallying..then it bodes well for the stronger economies/markets of the USA and Germany.

Italy, monthly

Spain, monthly

Both indexes are looking strong this month, and you can see there is very natural resistance, but that is around 10/15% higher in both cases. I hold to the original targets of 22500 and 12000 respectively.

If those occur..then we're surely looking at sp'1950/2050 by April/May..before a very significant correction of probably 17/22% across just 2-4 months.

Looking ahead

There are a fair few things tomorrow. We have producer prices, Empire manu' report, but more importantly..the first Fed Beige book of the year (2pm). No doubt the market will jump on that if it sees a pleasing balance between 'economic growth' and 'no-taper'.

Once again there are two fed officials due to speak, one of which is Lockhart, whom the market used as an excuse on Monday to sell lower.

*there is VERY heavy QE-pomo of around $5bn...bears...should be frankly...terrified.

Goodnight from London

Video update from Oscar


Daily Index Cycle update

Equity indexes reversed most of the Monday declines, with the sp +19pts @ 1838. The two leaders - Trans/R2K, both settled higher by 1.3%. Near term outlook is for general upside, into the sp'1860/80 zone by end month.





*Trans/R2K look especially strong in terms of the rebound today.

Equity bears need to take a good long look at the above index charts. The broader up trend does indeed continue, and with the weekly/monthly charts offering 1860/80 this month...bears are again in real trouble of being ground down to dust.

Near term outlook is for the sp' to battle higher, into the 1860/80 zone by end month..when Yellen will take over from the Bernanke.

a little more later...