Tuesday 1 July 2014

Closing Brief

It was a particularly bullish day for the US equity market, with new historic highs for most indexes, sp +12pts @ 1973 (intra high 1978). The two leaders - Trans/R2K, settled higher by 0.7% and 1.1% respectively. Near term outlook is bullish into mid July.



*I'll refrain from posting the smaller hourly cycle to close the day, seems little point. The bigger outlook is bullish, and I think many are still getting lost in the minor noise.

I've adjusted weekly'8b, basically pushing out sub'4 and 5 into Aug/Sept. Regardless of however you want to count this nonsense though.. the primary trend is unquestionably bullish.

time for kick off.... Belgium vs USA.

A full daily wrap at 8pm EST.

3pm update - a major day for the bulls

US indexes continue to hold significant gains, with just about all indexes having broken new historic highs. The bigger monthly charts are offering broad upside into Aug/early Sept - as especially suggested by the R2K.



*lousy Swiss failed to stop the Argentines. urghhhh

I noted one or two others kinda suggest it in recent days... but it looks like late July will offer a minor down wave of 2-3%.

Problem for those currently short, that 2-3% drop will probably be from somewhat higher levels. Whether that is sp'1990, 2000, 2010...difficult to say.

What is clear.. this is no market for a short trade.

Next problems for the bears...

Wed' Yellen at the IMF
Thur' half day...melt into the holiday weekend
Mon' sig' QE of $3bn


coming up at 4pm .EST... Belgium vs USA... and that will be a fine way to end the day.

2pm update - extra time for the Swiss

US indexes hold very significant gains, with new historic highs for the Dow, SP, Trans, NYSE Comp', and the R2K. Only the Nasdaq Composite is missing out..still 10% below the spring 2000 high of the 5100s. VIX remains crushed, and equity bears have nothing to look forward to in the immediate term.

R2K, monthly2', rainbow


The big monthly chart for the second market leader tells the story. We have the first green candle since last December.

Underlying upside power is increasing again, and we have taken out the March highs.

Just consider that the R2K has climbed around 12%... in the last six trading weeks.

back to the game.

1pm update - new highs for the old leader

The Transports - 'old leader' has broken a new historic high of 8278. The 8400/8500s look viable this month, which will likely equate to sp'1990s. VIX remains crushed, -4.5% @ 11.05. Metals remain a touch weak, Gold -$3.

Trans, daily


Little to add.


My own personal train wreck of WFM, +0.8%, but that is just not good enough, whilst the R2K is +1.4%.

time for the second half....

1.17pm.. R2K set to break new historic highs >1212..... incredible. What a start to July.

12pm update - Cheerleading the Swiss

Whilst US equities continue to build significant gains (no doubt helped by sig' QE of $3bn), there are far more important matters ahead. Argentina face Switzerland. Unquestionably, much of the world will be cheerleading the Swiss... not least the English, and those in Brazil.



*With new highs, I have adjusted weekly8b.

I'm starting to see late July as merely an opportunity for a sub'4...with further upside across Aug/early Sept.  Certainly, the monthly index charts are all offering upside of a further 3-4%

VIX update from Mr P.


Time for kick off.. .Go Swiss strikers... go!.

11am update - the powerful R2K

Whilst the sp'500 hits a new historic high of 1971, the real action is in the R2K. Having floored in the 1080s in early May, it is now some 11% higher..and looks set for the 1275/1300 zone in August. For the equity bears out there, this remains a terrifying index.

R2K, weekly


An incredibly powerful ramp from the 1080s, but then...it was expected.. not least after a series of very clear floor spikes - seen on the daily chart.

Monthly chart is offering the 1270s, and in August that will have risen to around 1300.

Notable strength: NFLX, +5.7% @ $465.. and headed for the big $500... no doubt.

11.36am.. sp'1974... rough day for the bears...and Yellen is due tomorrow.

10am update - R2K pushing into the 1200s

Whilst the sp'500 and Dow are both pushing higher, there is more notable strength in the R2K, which has just broken the big 1200 threshold, and looks set to break the March high of 1212. The monthly charts are offering the 1270s..although 1225/50 seems more realistic for July... or August.

R2K, daily


The 1080s now look a long... long way down.

With stocks like NFLX on their way to $500, there is no doubt the R2K will keep on pushing higher for another few weeks.

I am starting to get real concerned that the current trend will not significantly break in late July, and instead, we'll just keep on pushing higher.. sp'2100s by early Autumn.


Even the piece of trash that is WFM is higher this morning.. although it actually turned red in the opening few minutes.  I need $42s .. and frankly, I don't think I'm getting that. 

10.12am... and welcome to the sp'1970s...

We're a mere 1.5% away from the giant 2000 threshold... incredible.

As it is, weekly charts are restrictive to 1975/80 this week... 2000 does not seem viable until late July/early August.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +5pts, we're set to open around 1965. With sig' QE-pomo of $3bn today, equity bulls have an opportunity to break new historic highs in the 1970s. Metals set to open a little lower, Gold -$4.



So.. a long and somewhat quiet day is probably ahead.

As ever, we have a few more games today to keep everyone distracted.

Video update from Carboni

Good wishes for Tuesday trading!

*one other thing, we have the Yellen talking to the IMF tomorrow morning. I'm unsure as to whether any of the media will be paying attention, but still...equity bears need to be mindful of it.

Daily and Monthly Wrap

US indexes saw a naturally quiet trading day, in what will likely be a very quiet week. More notable, it was the end of Q2 and the first half. The sp'500 gained 1.9% in June, with the R2K leading the way, climbing a rather powerful 5.1%.


R2K, monthly


*as for today, there really isn't much to add from earlier posts. There is viable downside to the low sp'1940s... but it is a holiday week, and with low trading vol', the market is more likely to melt upward... than down.

Unquestionably, it was another month for the equity bull maniacs, the fifth consecutive net monthly gain for most indexes.

The two issues for July appear to be..

1. Will we see sp'2000 along with VIX 9s

2. If Q2 GDP comes in weak (due July'30th.. which happens to be when the FOMC are due to announce QE-taper'6), how will the market cope, and would the FOMC halt the QE taper?

Today's Chicago PMI number of 62 certainly isn't suggestive of recessionary forces. Of course, the QE fuel continues to be reduced ($35bn from July 1'st), and that is no doubt having some degree of 'cool down' - at least for the financial sector of the economy.

A few bits and pieces to round up the month...

Since it is the end of the month, I wanted to highlight a few things, other than the indexes..

WTIC Oil, monthly'2, rainbow

A monthly gain of 2.4%, with Oil in the $105s. As has been the case since early 2011, Oil struggles in the 100/110 zone, and until we see a monthly close >110, I'd still be somewhat sceptical that the 2008 high of $147 can be challenged. No doubt, if social unrest.. and war consumes more of the middle east, then we might finally see a monthly close in the 110/120s.

Copper, monthly

A net monthly gain of 1.6% @ $3.19. The second consecutive monthly gain, and I have to wonder, are we in with a chance of testing $4 later this year? If Copper is in the upper 3s...or even the low 4s, that bodes for much higher equities.

USD, monthly'2

The world's reserve currency slipped a moderate 0.8% in June. The closing red candle is somewhat bearish for July. If we see the 78s, it'd offer the low 70s.. which would really cause havoc for US asset prices - in terms of 'HUGE' upside potential.

Underlying MACD (green bar histogram) cycle does look somewhat floored though. Dollar bulls need to target the 82s, which would signal a major trend change.

Closing update from Riley


Looking ahead

Tuesday will see the PMI and ISM manufacturing data, along with construction orders. That should be enough to move the market... at least a little.

Overall though, trading vol' won't likely be any higher than Monday, and things will surely get quieter still on Wed. Thursday will see the monthly jobs data, and we might see a brief hour or two of sig' vol' before the early close of 1pm.

*there is sig' QE-pomo tomorrow, $3bn... bears..beware!

Another month for the bears to forget

I'm kinda tired, and this post is already overly long. Suffice to conclude, June was merely another month for the equity bears to forget. Not only did we see new historic highs in a number of indexes, but even the battered R2K and Nasdaq saw strong recovery rallies.

I remain resigned to further upside, and until we see the sp' back under 1900, along with VIX 22s (which especially looks difficult), I can't get particularly hopeful.

Ohh, and yeah, I'm still in the trenches... WFM is proving to be my most annoying.. and stupid trade of the year so far. Hell, I only need $41/42 to recover at least something, but even that looks difficult by July opex.

Goodnight from London