Wednesday 2 July 2014

Closing Brief

US equities traded within a very narrow range across the day, the sp'500 settled +1pt @ 1974. There looks to be near term upside into the 1980/90s. The giant 2000 level - if it is going to be hit, looks more likely in August.. than July.



It was a very quiet day in market land...and this is most certainly not 'bear weather'.

There looks to be further upside, with a sig' chance of Dow 17k tomorrow... so long as the monthly jobs gains come in at least over 200k.

I'll post a full daily wrap later at 8pm EST.

Have a good evening.

3pm update - falling asleep into the close

US equities have traded in a extremely narrow range of 3.9pts for the sp'500.. that is a mere 0.2%. Thursday will at least see the monthly jobs data, and that should be enough to kick the market at least 0.5-0.75%... probably to the upside.



*price structure on the smaller hourly/15min cycles is a bullish pennant. It would offer the low 1980s tomorrow.

Weakness in the airlines remains the most notable sector today.

*my own train wreck of WFM remains moderately higher, +0.4%, battling for a close in the low $39s.

2pm update - sleepy midweek

US equities continue to see minor churn, with the sp' likely to close within the 1975/65 zone. VIX remains moderately lower in the 10.70s. There is notable weakness in Oil, -0.9%.



So...minor churn.

There remains distinct weakness in the airline stocks, UAL -5.8%, and will probably see a little follow through tomorrow.. even if the jobs data is 'rainbows and unicorns' in the 225/325k range.

time to cook!

1pm update - afternoon chop

US indexes continue to see minor chop - ahead of the monthly jobs data tomorrow morning. VIX remains crushed, -3% in the 10.70s. Metals remain a touch higher, Gold +$2, whilst Oil continues to slide, -0.8%.



*the attached count on the above should be taken somewhat 'lightly'. However you want to count this, primary trend is higher. Equity bears need a July monthly close <1900, and right now, I don't think that is viable.

Suffice to say, market is likely to close largely flat today.


VIX update from Mr P.

Notable weakness, airlines, UAL, DAL.

12pm update - the crushed VIX

Whilst equities are seeing slight gains, there is notable weakness in the VIX, -3% in the 10.70s. VIX 9s seem probable, and are certainly viable if sp' can claw its way into the 2000s. After all, since everything is fixed in the economy now.. there is nothing to fear!



Even the mid teens look difficult to reach in the immediate term. The 20s look completely out of range, even if we see a wave lower on weak Q2 GDP.

As things are, I certainly won't be long VIX until mid Aug/early Sept.

stay tuned.

11am update - Dow set for 17k

US indexes remain in minor chop mode, but with the usual underlying upward inclination. The mighty Dow looks set for 17k... whether today, tomorrow.. or next Monday. It should make no difference to the equity bull maniacs... the primary trend remains strong.

Dow, daily


Little to add.

Yellen is on the loose this hour... bulls should hope she stays mute on interest rate policy. Or... if they are lucky, talks about 'long term low rates'.

*WFM.. my train wreck remains moderately higher, and i'd really like a Thursday close in the mid/upper $39s... at least keeps open the hope of 41/42 next week.

10am update - interesting movers

The main indexes are seeing some minor chop, with the usual underlying upward pressure. There are some interesting individual movers already today, notably the airlines and retail. Metals are flat, whilst Oil is a little weak, -0.6%.

UAL, daily

WFM, daily


UAL is reacting to a similar drop in DAL, which marginally missed on June flight data.

I don't follow the individual companies that closely, but Delta is far superior to United.. from what I know.

*I remain long WFM, which has been my most annoying trade of the year so far. Underlying MACD (blue bar histogram) is arguably due for another wave higher. If so..then 42/43 is first soft target.

I'm sitting on an overly big option block.. and the clock is ticking (implosion July opex). I want to drop no later than end of next week. Right now, the 43s would be a 'dream' recovery.

I suppose at least I have the broader market trend on my side.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1975. Precious metals are a little higher, Gold +$2. Equity bulls look set to consolidate, if not moderately build further gains into tomorrows early (1pm) close.



*awaiting ADP, and factory orders data

The sp'1980/90s look a given... and as many others are also starting to believe, we could be headed 'straight up' into the 2100s (which could include a minor sell down in late July).

Yellen is due to speak at some IMF meeting at 11am... I'm unsure as to if the media/market will be giving that much attention.

For the resolute doomer bears out there...

Hunter.. with Quayle


No games today

Sadly, no more games until Friday, so today will be all about the market. Personally, I'm going to really miss the World cup when it concludes July'13th.The next time it comes around...  things could be really different, and we'll all be four years older.

Good wishes for Wednesday trading

Another day of historic highs

US equities started a new month with a broad array of new historic highs. The R2K is leading the way, and having broken the March high of 1212, looks to have upside to the 1250/1300 zone in Aug/early Sept. VIX remains crushed, and the upper teens/low 20s now look out of range until September.

R2K, monthly'2, rainbow



The above monthly chart should terrify the equity bears. Earlier today, we had the first green candle on the monthly 'rainbow' chart for the R2K since last December. The day closed 'blue', but there is no doubt the R2K will battle higher into next week.

The battered R2K has ramped around 12% across the last eight trading weeks, and there looks to be a further 4-8% of upside into Aug/early Sept.

What about the VIX?

The VIX was again crushed into the 10s today, but settled -3.6% @ 11.15. The weekly VIX MACD (blue bar histogram) cycle is at the low end, and I'd expect a minor spike in late July...15-17 would be a viable upside target.

As it is, I have little interest in attempting to trade such a minor VIX spike. Right now, I'd only consider going long VIX in mid August.. or early Sept.

Looking ahead

Wednesday will see ADP jobs, along with factory orders data. Perhaps more motivational for the market though, we have the Yellen talking at an IMF conference.

*next sig' QE is next Monday.

Pushing out the time frame

With price action as it is - along with a truck load of new index highs, I'm assuming we are still in sub'3 - not least supported by 12 green candles on the weekly 'rainbow' chart.


As ever, I do try to be flexible, and I'll continue to alter the outlook as best I can figure. 

Goodnight from London