Friday, 21 August 2015

Pre-Market Brief

Good morning. Equity futures remain weak, sp -12pts, we're set to open at 2023. USD is notably lower, -0.5% in the DXY 95.40s. Metals and Oil are broadly flat. China continues to unravel, with the Shanghai comp' settling with a net weekly decline of -11.9%.


sp'weekly8 - the big retrace


*futures saw a low (as far as I am aware) -17pts... to an equiv' cash level of sp'2018 or so.

Re: weekly'8. Despite recent price action, I find the notion of the sp'1800s, never mind anything lower difficult to envision. On a arithmetic scale... first rising support is around 2025/2000... after that..  core support is 1725/00 by Oct'.... and that would be a clear 100pts below the lower monthly bollinger.

I find such a decline unlikely, as it would be highly suggestive that a key multi-year peak has occurred at sp'2134. In any case, we should have some clarity in October.

We have a very dynamic opex Friday ahead.

Best guess... a net daily gain, a weekly close around sp'2050 would be very natural, despite a weak open.

It won't take much across next Mon/Tuesday to drive the market to 2075/80... fill the gap, burn off the oversold condition... and then next wave to sp'2000/1975 - with VIX 20s... by end month.

Update from Oscar


Overnight China action: Ended the week on a down note, settling -4.3% @ 3507. The key low of 3373 looks set to be taken out... and then its the 3200/3000 zone. If world markets really get upset in Sept/Oct... a washout to around 2500 is possible.

What will be particularly interesting to see is how the Chinese leadership react. I'd imagine a break <3K will result in dawn raids at various residences where 'malicious short sellers' live.

What am I doing today? I don't particularly want to risk trading the long side for a bounce. I guess if I 'had to' trade something for a day trade, I would be long AAPL. As things are, I'm content to sit it out, and look for a major re-short from sp'2075/80 next week.

Have a good Friday

8.23am.. futures cooling... sp -16pts...  that will make for 2019... a mere 1% from the giant psy' level of 2000.

notable weakness:  DE -4.6%.. on earnings

NFLX -6%...  in the $106s.

FB -2.4%, TWTR -1.1% in the $25s (new historic low), the momo stocks are getting hit rather hard.

9.04am.. Lol @ CNBC... with the Cramer making an unscheduled appearence because of this 'severe down turn'... when really, we're barely 100pts... not even 5% below the historic high.

Can you imagine how these clowns will react when we're another 5-10% lower? 

9.36am.. Eyes sharp for a black-fail candle on the VIX... which opened in the 22.50s.