Weekend update - World monthly indexes

It was a powerfully bullish month for world equity indexes. Net monthly changes ranged from 22.5% (Russia), 5.6% (USA - Dow), to 2.9% (UK). With the ECB QE-pomo train set to arrive in the EU this March, most equity markets look set for continued gains into the early summer.


Lets take our monthly look at ten of the world equity markets.


Greece

Despite some real concern about an exit from the Euro, with a four month bailout extension, the Athex soared into end month, with a rather extreme monthly gain of 22.0%. First upside target remain the 1400s. A monthly close in the 1500s at any point this year will arguably confirm that the 2500s are viable in 2016.


Brazil

The Bovespa soared a very powerful 10.0%. Next upside is the 60k level, which is another 18% or so higher. If commodity prices can stabilise.. and start to climb this summer, the Brazilian market has a chance at breaking key resistance of around 65k. A hyper-bullish target of 100k by 2017 remains very valid.


France

The CAC continues to soar, with a net Feb' gain of 7.5% @ 4951 - the highest level since May'2008. The giant 5k threshold looks due in March. There is clear trend resistance around 5k, but with the ECB QE-pomo, there is viable accelerated upside into the 6000s this summer - back to the 2007 peak.


Germany

The economic powerhouse of the EU continues to roar, with an impressive gain of 6.6% into the 11400s. There is viable upside to 12k this spring. The Oct' spike floor in the 8000s now looks a very long way down... and will probably not be re-tested for some years.


UK

The UK market finally broke the Dec'1999 high, with a Feb' gain of 2.9%. The giant 7k threshold looks set to be achieved in March. From there... the 8500/9000 zone looks very likely this year. Any monthly close in the 7000s will arguably confirm an eventual move to the giant 10k level.


Spain

The ugliest of the EU PIIGS - Spain, managed a strong gain of 7.4% into the 11100s. Key resistance at the 12k threshold looks set to be tested by April/May. Any monthly close in the 12000s will offer a straight run to the 16000s within the next 9-15 months.


USA - Dow

The mighty Dow climbed a very significant 5.6% this February... with a new historic high of 18244. The upper bollinger will be offering the 18400/500s in March. 19K looks a little difficult until May/June. Any monthly close in the 19000s should clarify that Dow will be trading in the 23/26k range no later than spring 2016.


Japan

The BoJ fuelled Nikkei is soaring, with a net gain of 6.4% in the 18700s. The 20k threshold looks due by early summer. The only issue is when the current rally goes truly hyper. With continued (and accelerated) equity purchases from various central banks... the Nikkei is going to have a chance at the Dec'1989 high of 38957. That is of course a clear doubling from current levels.


Russia

Despite broadly weak energy prices, the Russia market saw a pretty extreme net monthly gain of 22.5%.. back into the 900s. However, if Oil fails to hold the recent WTIC Oil low of $43, then the Russia market will have a high likelihood of re-testing the 600s.. or even 500s. In terms of the grander multi-year cycle though, the Russia market is arguably in the process of building a solid multi-month floor (much in the style of late 2008/early 2009) before a massive push back over resistance - currently in the 1200s.


China

The China market saw renewed strength, with a significant net monthly gain of 3.1% into the 3300s. Key resistance in the 3500s looks set to be tested... and broken through. Any monthly close in the 3600s should clarify that 5K is due before year end... and new historic highs in 2016.


Summary

It was unquestionably one of the strongest months for world equities in some years. We have a number of indexes breaking new historic highs (Dow, DAX, FTSE). Even the basket-case economies of Greece and Spain saw powerful net monthly gains.

With the ECB QE-pomo train set to arrive in the EU this March... there is the threat of accelerated upside. All that seems to be missing is some strength in commodity prices.

Most world markets look set for broad upside for another two years. If we see a bubble peak in 2017, we could be looking at Dow 35/40k, DAX 20k, FTSE 12/14K, and Shanghai Comp' of 10/12k.

I realise those will be considered as 'crazy talk' by many, but then.. the central banks seem 100% intent on ramping asset prices for the foreseeable future. Indeed, the ECB have already stated that the QE-pomo program will last at least to Sept'2016.


Looking ahead

A pretty busy week is due...

M - Pers' income/outlays, PMI/ISM manu' sector, construction
T - Vehicle sales
W - ADP jobs, PMI/ISM service sector
T - weekly jobs, product/costs, factory orders
F- monthly jobs data, intl' trade, con' credit
--

... back at the Monday open.

A powerful net monthly gain

US equities saw powerful net monthly gains in February. The sp'500 climbed 109pts (5.5%), with a new historic high of 2119. The Dow soared 967pts (5.6%), with a new high of 18244. The broader outlook remains starkly bullish.


sp'500, monthly

Dow, monthly

Summary

It has been a particularly difficult and tedious week. Despite net daily declines across Wed, Thurs, and into the Friday close... price action has been very subdued.

It remains a very complacent market.. but then... Mr Market is well aware that the ECB QE-pomo train will arrive in the EU sometime in March. That will be a hugely bullish underpinning to most world equity markets until late 2016.

There is simply ZERO reason why the market can't keep on climbing for another two years.

On that hyper-bullish note...       Goodnight from London
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*the weekend update will be on the World monthly indexes

Daily Index Cycle update

US equity indexes closed lower for the third consecutive day, sp -6pts @ 2104. The two leaders - Trans/R2K, settled lower by -0.6% and -0.5% respectively. Near term outlook offers the sp'2060s, before renewed upside into April/May.


sp'daily5

Nasdaq comp', daily

Summary

Suffice to say... despite all the cheer leading on clown finance TV about Nasdaq 5K... it again fell shy.

It looks like we have a short term top of sp'2119... with a minor retrace to the 2060s by next Wed/Thursday.
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Closing update from Riley


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a little more later....

Volatility melts across the week

Despite a touch of weakness into the weekly/monthly close, the VIX still continued to broadly slide, settling -2.5% @ 13.56 (intra low 13.29). VIX declined for the fourth consecutive week, with a net weekly decline of -5.2%.


VIX'daily3

VIX'weekly

Summary

*first upside break/target for the equity bears next Monday will be a daily close in the 14s. That is well within range, and looks due.
--

So.. a fourth week lower for the VIX, and the early Feb' high of 22.81 now looks a very long way up.

Sustained trading in the low 20s looks unlikely for some months.

At best... the 17/19s by next Wed/Thursday... which would equate to sp'2060s, where there are multiple aspects of support.
--

more later... on the indexes

Closing Brief

US equities settled a touch weak, sp -6pts @ 2104. The two leaders - Trans/R2K, settled lower by -0.6% and -0.5% respectively. Near term outlook offers a minor retrace to the sp'2060s.. where the 50dma will be lurking next week.


sp'60min

Summary

... and another rather tedious week in market land comes to a close.

All things considered, it looks like sp'2119 was a short term high. We look set to slide to the 2060s by next Wed/Thursday.. before renewed upside.

On no basis does it look like the market will be sustainably trading under the 2050 for some months.

Have a good weekend
--

*a full set of updates across the evening to wrap up the week

3pm update - a powerfully bullish month

Regardless of the exact close, it has been a powerfully bullish month for the US.. and most world equity indexes. The sp' is set for a net February gain of around 5.5%... totally negating the moderate weakness of January. Broader outlook remains strongly bullish... with the sp'2200/300s viable into the early summer.


sp'monthly

sp'60min

Summary

*the daily cycles are highly suggestive of weakness in the first half of next week.
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Soft support remains 2103/00 zone... a break under that offers 2065 next Tue/Wed.
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Notable weakness, CHK -2.9%

2pm update - minor weakness

US equities are seeing a touch of weakness... but the key sp'2100 threshold continues to hold. VIX is not offering any market concern, -2% in the 13.60. Metals appear weak, Gold +$4, whilst Oil remains broadly flat.


sp'daily3 - fib retrace

Summary

*the above fib retrace is subject to change of course, on any new high >2119.. but that looks increasingly difficult.
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So... micro chop...  with a touch of weakness. It remains very tedious price action.
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Notable weakness: AA -2.3%, CHK -2.5%

12pm update - still tedious

US equities remain in a state of micro chop. The only notable thing in the past few days is that the sp'500 has not broken another new high (>2119). Metals are holding gains, Gold +$8. Oil has turned negative, -0.2%. VIX remains in cooling mode, -2% in the 13.60s.


sp'daily5

VIX'daily3

Summary

Little to add.

Utterly tedious week... and I know I'm not the only one feeling that way.
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VIX update from Mr P.


-
time for lunch..

11am update - minor chop

US equities remain in minor chop mode.. ahead of the weekend. A rally into the afternoon is very likely, and that would be enough to push the Nasdaq Comp' to the giant 5k level. Metals are holding moderate gains, Gold +$7, whilst Oil is trading broadly flat.


sp'60min

sp'daily5

Summary

*yeah, I'm late again.
--

Right now, best case for the equity bears... the market doesn't make any new highs today,  but really, that is pretty lame.

Underlying MACD (blue bar histogram) is still ticking lower, and at the current rate will see a bearish cross in about two days. So.. in theory.. we should see some degree of weakness no later than next Tuesday.

Retrace downside target remains sp'2065. Anything under 2050 looks highly unlikely for some.... months.

-
Notable weakness, CHK, -2.4% in the $16s.... merely continuing to implode.. after recent poor earnings.
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Update from an overly loud Oscar



--
back at 12pm

Daily Wrap

US equities saw another day of mixed chop, but with notable new highs in the R2K (1239), and the Nasdaq Comp' (4989). Near term outlook still offers opportunity of a minor retrace to the sp'2060s, but from there.. a straight run into the sp'2250/350 zone looks likely by mid summer.


R2K, daily

Nasdaq Comp', daily

Summary

The giant psy' level of 5k looks viable tomorrow. Regardless.. a challenge of the more important 5132 peak of March 2000 looks due within the next month or two. Once we see a monthly close in the 5200s, it opens up a straight run to at least the 6000s.

With the ECB QE-pomo train set to arrive in the EU next month... there is zero reason why the equity bears should have any hope of a sig' correction for some months.


The elusive retrace

sp'daily3 - fib levels

Right now, the mid sp'2060s look the most viable level. By middle of next week, anything under the 50dma looks out of range.
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Closing update from Riley


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Looking ahead

Friday will see a quartet of data, GDP (rev'1), Chicago PMI (market expects 58), consumer sentiment, and pending homes sales.

*there is a trio of Fed officials speaking at a monetary conf. in NYC...  Mr Market will be listening for any hints on rate rises this summer.
--

Goodnight from London

Closing Brief

US equities closed moderately mixed, sp -3pts @ 2110. The two leaders - Trans/R2K, settled -0.5% and +0.3% respectively. Near term outlook still offers a minor retrace, but downside now looks limited to around sp'2065.. which will likely equate to VIX in the 17/19 zone.


sp'60min

VIX'60min

Summary

... a rather disappointing end to the day for those in bear land. The sp'2100 threshold continues to hold, and thus there is no clarity that even a minor retrace is underway.

Each day of chop means the downside target will be raised.. and right now.. that would be the sp'2060s.

Have a good evening

-
Daily wrap at 8pm EST.

3pm update - close to a break

US equities are seeing renewed weakness, with sp -7pts @ 2106. A daily close <2100 would be just a moderate net daily decline, but would open the door to the 2065/50 zone next week. VIX is confirming a touch of market concern.. not least as energy prices are starting to implode, Nat gas -5.6%, and Oil -4.3%


sp'60min

VIX'60min

Summary

An interesting closing hour is ahead...

If we can get that daily close under sp'2100, it will open the door to the 2060s next week. The 2050s look increasingly tough... not least as the 50dma is rising each and every day.
-

Notable weakness: energy stocks, CHK -4.4%, BTU -6.3%, SDRL -2.7%

updates... into the close

2pm update - mixed chop

Equity indexes remain mixed, sp -3pts @ 2110, whilst the Nasdaq is holding fractional gains.. a mere 0.3% from breaking the giant 5k threshold. Metals appear maxed out on a bounce, Gold +$4. Oil continues to fall, -4.0% in the $48s.


sp'60min

Summary

Suffice to say.. it remains painfully tedious.
-

Notable weakness, CHK  *weekly cycle...

Nothing bullish in this one... looks set to return back to the lows from summer 2012.
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2.26pm... renewed weakness.. sp -5pts to 2108....  soft support at 2103/00...

A daily close <2100 would be significant.. and (finally) open the door to the target zone of 2060/50s. 


2.30pm ... Oil is collapsing, -4.6% in the $48s... and this is certainly helping offer the chance of a key break.

Notable weakness: SDRL -2.3%... although earnings were certainly 'better than expected'

1pm update - it remains subdued

US equities remain largely subdued, although still achieving new highs in a few indexes. Metals are holding moderate gains, Gold +$5, but looks vulnerable into the Friday close. Oil continues to slide, -3.1% in the $49s. VIX is showing zero sign of market concern, -1% in the 13.60s.


sp'60min

GLD, daily

Summary

*another black-fail candle for Gold, and some weakness into the Friday close looks very viable. Regardless, February was a bad month for the gold bugs.
--

Not much to add... it remains a very dull market. I'm resigned to broad upside into late April/early May... and then the first chance of a more sig' drop.

Notable weakness: CHK -4.9% in the low $17s, unravelling... and looks ugly to the 12/10 zone this summer.
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time for a late lunch... back at 2pm

12pm update - price action remains the same

It is just another day in market land.. a touch of weakness in early morning, but with underlying strength.. being reflected in new highs in the R2K and the Nasdaq Comp'. VIX remains subdued in the mid 13s. Gold is holding moderate gains of $5. Oil remains very weak, -2.6% in the $49s.


sp'60min

sp'daily5

Summary

*yeah... I'm somewhat late today, but then, where the hell is everyone else lately? It'd seem the algo-bot melt is killing the financial blogosphere.
--

So... its still a case of minor chop... but grinding broadly higher. The R2K sure isn't showing any sign of stopping. There is a touch of weakness in the Transports, but really.. its negligible.

Without question, until we're back under sp'2100, there is no clarity that a retrace is even underway. At best... it looks like bears might hit 2065/50 zone, but even that looks increasingly difficult next week.
-

Notable weakness, CHK -3.8% in the low $17s, continuing to fall after recent earnings.. target remains $12/10 zone by late summer.
--

VIX update from Mr S... aka the Godfather


--
time to shop.. back at 1pm

Daily Wrap

US equities closed moderately mixed, sp -1pt @ 2113 (intra high 2119). The two leaders - Trans/R2K, settled -0.5% and +0.1% respectively. Near term outlook continues to offer a minor retrace to the 50dma.. in the sp'2050s next week. The broader trend remains powerfully bullish... with Nasdaq 5000s due.


sp'daily5

Nasdaq Comp' daily

Summary

Suffice to say... it remains a case of new historic highs... each day.

At best.. equity bears have a small hope (as arguably reflected in the VIX) of a minor retrace to the sp'2060/50s by mid March.
-

Closing update from Riley


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Looking ahead

Thursday will see the usual weekly jobs, CPI, Durable Goods, and FHFA house price index.
--

Goodnight from London

Closing Brief

US equities closed moderately mixed, sp -1pt @ 2113 (intra high 2119). The two leaders - Trans/R2K, settled -0.5% and +0.1% respectively. Near term outlook continues to offer a minor retrace to the 50dma.. in the sp'2050s next week. The broader trend remains powerfully bullish... with Nasdaq 5000s due.


sp'60min

VIX'60min

Summary

*awaiting earnings from RIG
--

Suffice to say... pretty tedious day, but at least.. the Yellen is out of the way until the next FOMC meeting of March'18th.

Until we break under sp'2100, there still isn't any clarity that a moderate retrace is underway.

If <2100, then target zone is 2065/50 within the next 2 weeks... that might equate to VIX maxing out in the 18/19s.
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Daily wrap at 8pm

3pm update - weakness into the close

US equities have turned a touch weak, having broken new historic highs a little earlier. Market is being lead lower by AAPL, having got stuck against the upper rising trend. Metals are holding minor gains, Gold +$3. Oil has built rather powerful gains of 3.7%, but is broadly flat on the week.


sp'60min

AAPL, daily

Summary

*I refer anyone to the 'fair value stocks' post on AAPL I did yesterday evening. I am certainly broadly bullish on AAPL, but its natural for a pull back to the 125/20 zone. The latter would likely equate to sp'2060/50s in early March.
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So... was sp'2119 a short term high? Until we break <2100... difficult to say.

Regardless, were I only looking at the AAPL, INTC, and HD charts, I'd say a minor correction is underway.. even on a day when the indexes have broken new highs.
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*it is also notable that the VIX has turned positive, swinging from 12.86 to 13.90s. A daily close in the 14s would offer initial confirmation of an equity cycle top.
-

updates into the close... not least if we continue to slip lower.


3.04pm... Ohh the humanity.. the Nasdaq might actually close red for the first time in 11 days.

Notable weakness: AA -5%.... carnage in the aluminium stocks.


3.12pm.. minor chop... but for now... a red close looks due.... being confirmed via VIX.

*earnings due at the close... RIG.       SDRL due at the Thursday open


3.23pm First soft support on the hourly sp'2105/03....  things really only see some clarity once <2100.

Notable weakness:  airlines, UAL/DAL, both lower by around -2.5%...  as Oil prices climb.


3.38pm... a little chop... but still weak.

A red Nasdaq close.... would be clearly a concern... do we move to crash alert yet?

Notable weakness: AAPL -2.8%.. seemingly headed for the low 120s.

2pm update - higher and higher

Mr Market hits another wheel barrow of short-stops, jumping to a new historic high of sp'2019. VIX is reflecting the absolute market confidence, -5% in the 12.90s. Metals are holding minor gains, Gold +$2, but looking vulnerable to closing red. Oil is higher by 2.4%


sp'daily5

Summary

Seen on the bigger daily cycle, it remains algo-bot melt mode.

First key support remains the daily 10MA.... which itself is rising very fast.

--
Notable weakness: AAPL -1.3%


2.32pm.. typical turn time... market appears to want to turn red..... lead lower by AAPL, INTC, and even HD.

Notable weakness, aluminium stocks.. CENX -12% (lousy earnings).... AA, -4%


2.40pm.... rollover in progress... lead by AAPL, -2.6%... see 'fair value' post >>>>

12pm update - utter tedium

US equities are in nano chop mode, with marginal new highs for some indexes. The Nasdaq comp' is higher for the 11th consecutive day... a mere 0.5% from hitting the giant 5k threshold. Metals are holding minor gains, Gold +$5. Oil has re-built gains of a somewhat significant 1.4%.


Nasdaq Comp', daily

GLD, daily

Summary

Aside from a few dynamic movers like HPQ and CHK.. it is simply another day of tedious algo-bot melt... to the upside.
-

VIX update from Mr P.


--
time for lunch... back at 2pm

11am update - micro chop

As the Yellen continues to answer questions from intellectual giants such as Maxine Waters, the equity market remains in micro chop mode.. with some indexes already turning back positive. Gold is +$3.. but looks particularly weak. Oil is similarly weak, +0.1%... set to turn negative.


sp'daily5

Summary

*the questioning from Waters remains utter train wreck TV. I'm fuzzy on exactly what district of the USA she is representing.. but really... I can only imagine what Yellen is thinking at times of those who question her.
--

So... micro chop.. but there is some action out there...

Notable weakness...

CHK -11.4% on lousy earnings.

HPQ -9.9%.. post earnings

... a loss of the key 200dma, as Mr Market mulls the longer term outlook for one of the 'once great' tech giants.

10am update - time for more Yellen

US equities open a little lower, but until we're back under sp'2100.. it is nothing for the equity bears to even get moderately excited about. Yellen is set to address the US congress for the next 2-3 hrs, and Mr Market will be closely listening. Gold opens +$4, but looks set to turn red. Oil is similarly losing early gains.


sp'60min

Summary

... so... here we go again....  another few hours of the CEO of Print central.

Time for a valium, wine.. or something.

--
Notable weakness...

CHK, -10% on lousy earnings.

Seen on the bigger weekly chart... downside target zone remains 12/10.. by mid/late summer. I am a fan of the company..  but there looks to be very viable downside of a further 35/45%.

*the late summer looks to be 'shopping cart time' for a great many of the commodity related stocks (for those that think we rally in a hyper-bubble into 2017 or so).


10.36am.. Is it me.. or is Yellen starting to get annoyed?

VIX has been smacked lower... despite minor equity declines... to the 12s.


10.39am... Oh noes.... here she is...

Representing the American people

Train wreck TV.  The film 'still alice' comes to mind.