Weekend update - World monthly indexes

It was an extremely bullish month for world equity markets, with net monthly gains ranging from 12.3% (Germany), 8.5% (USA - Dow), to 1.8% (Brazil). Notably, the US market managed an important close back above the 10MA, other world markets look set to follow into year end.


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

Greece

The third consecutive net monthly gain, with the Athex settling +7.2% @ 702. Next upside resistance is not until the 900/1000 zone... and that is around 30% higher.


Brazil

With commodity prices remaining weak, the Bovespa continued to struggle, with a relatively minor net monthly gain of 1.8% @ 45868. The Oct' candle is somewhat spiky, and a break back to the 43/42000s looks probable.


France

A powerful net monthly gain of 9.9%, with the CAC back on a charge for the 5000s. There is key declining resistance in the 5100s.


Germany

The economic powerhouse of the EU - Germany, saw a hyper powerful monthly gain of 12.3%, with the DAX close to re-taking the key 10MA (10995). A year end close in the 12000/12500 zone looks probable.


UK

Relative to most other world markets, the UK is still struggling, with a net monthly gain of only 4.9%. The 10MA in the 6600s will be a real challenge for the FTSE to break above... but it does look due. After that... it will be back to a case of whether the UK can break and hold the 7K threshold in spring 2016.


Spain

The ugliest of the EU-PIIGS - Spain, saw a net monthly gain of 8.4%, with the IBEX back in the 10000s. Key resistance remains the 12K threshold. A break above 12K will open up a hyper-bullish move to challenge the Nov'2007 high of 16040.


USA

The mighty Dow saw a net monthly gain of 8.5%, settling the month @ 17663. A retrace to the 17K threshold would be very natural in the first half of November, before resuming higher. A year end close >18K looks probable.

Underlying MACD (green bar histogram) cycle remained negative for an 8th month, but is starting to tick higher. At the current rate, it will take at least until January to see a bullish cross.

It would seem the May high of 18351 will be broken above within the next 2-3 months... after that.. next resistance is arguably not until the giant psy' level of 20K.. which would likely no earlier than April/May 2016.


Japan

The BoJ fuelled Nikkei saw a powerful net monthly gain of 9.7%.. back in the 19000s. A year end close >20K looks highly probable. By late spring 2016, the Nikkei could be trading around 23/24K.


Russia

The Russian equity market managed the first monthly gain since April, of 7.1% @ 842. Next resistance thresholds are 1000 and then 1200. With energy prices likely to remain weak into 2016, the Russian market will find it difficult to sustainably break >1K before late spring 2016.


China

The multi-month decline has come to an end, with a net monthly gain for the Shanghai comp' of 10.8%, settling @ 3382. The monthly 10MA (3690) will be important to break/hold over... by year end. On any monthly close >3800/900, first upside target will be 5K, with an equally valid target of the historic high of 6124.. by end 2016.


Summary

Without question, it was a monstrously bullish month for world equities, powering up and away from the lows of late August. The US and German markets remain strongest, whilst the commodity dependent nations - such as Brazil/Russia, continue to struggle.

Broadly... world equities look set for a moderate retrace of around 3-4% into mid November.. and then broadly climb into spring 2016.
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Looking ahead

The week will centre around the next monthly jobs data. A net gain of 150k or less would be another excuse to those at the Fed that int' rates still can't be raised as things just aren't 'quite perfect' yet. Any number >200k will likely give the market renewed concern of a rate rise at the Dec'16th FOMC

M - PMI/ISM manu', construction
T - Factory orders
W - ADP jobs, intl. trade, PMI/ISM ser' sector
T - weekly jobs, produc'/costs
F - monthly jobs, consumer credit

*there are a considerable number of scheduled appearances from various fed officials.. but nothing from Yellen.
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Back on Monday

Bits and pieces to wrap up October

October saw US equity indexes power relentlessly higher, with the sp'500 +159pts (8.3%) @ 2079. The Dow +1378pts (8.5%) @ 17663, whilst the Nasdaq +433pts (9.4%) @ 5053. WTIC oil ended the month +2.8% @ $46.59, whilst Copper settled -1.0% @ $2.32.


sp'500, monthly

A key closing back above the 10MA... very decisive.. and ongoing price action bodes for new historic highs (>2134) before year end.


Dow, monthly

An important close above the 10MA... the 18000s look due before year end


Nasdaq comp' monthly

A close above the monthly 10MA... already within a mere 3% or so from breaking new historic highs.


WTIC Oil, monthly2

The third consecutive blue candle... having again got stuck at the 10MA. With supply being an unresolved issue, Oil prices look vulnerable for the remainder of the year.


Copper, monthly

Another month of moderate churn in the low $2s. Along with most other commodities, Copper will be vulnerable to renewed strength in the USD... sub $2 remains a very valid scenario into 2016.


USD, monthly2

A net monthly gain of 0.6% @ DXY 97.07. Price structure remains a giant bull flag. Underlying MACD (green bar histogram) cycle will be vulnerable to a bearish cross in Dec/Jan'2016. A break above the DXY 100 threshold still looks due - as the BoJ and ECB continue to print, along with the grander issue of increasing capital flows into the USA.


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October was a crazy month indeed. I had expected a move to eventually test the 10MA... and had hoped for a critical fail.. but no. The equity bull maniacs have re-taken control, and look set to battle to new highs.. probably into late spring 2016.

Goodnight from London
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*the weekend post will be on the world monthly indexes

Daily Index Cycle update

US equities ended the month moderately lower, sp -10pts @ 2079 (intra high 2094). The two leaders - Trans/R2K, settled lower by -0.1% and -0.3% respectively. Near term outlook is for a natural retrace to the sp'2020/00 zone.. where there are multiple aspects of support. From there... broadly higher into year end.


sp'daily5

Summary

Suffice to add... at the current rate, the daily MACD (blue bar histogram) cycle will see a bearish cross next Tue/Wednesday.

Sustained action - even given 2-3 weeks, under the sp'2000 threshold looks unlikely for the remainder of the year. At best.. a retrace to the 2020/00 zone before renewed upside.
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Closing update from Riley


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a little more later...

VIX claws higher into end month

With equities settling moderately lower, the VIX clawed higher into the monthly close, settling +3.1% @ 15.07. Across the week, the VIX settled +4.2%. Perhaps most notable, for the month of October, the VIX settled net lower by -38.5%.


VIX'daily3

VIX'weekly

VIX'monthly

Summary

*A rare look at the monthly cycle, but it does merit highlighting, as we've now seen the VIX collapse from 53.29 (Aug 24th) to 12.80 (Oct 28th).

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Suffice to add, the VIX is due an up cycle... and the Fed day spike low of 12.80 will likely not be hit again until December.

At best, an equity retrace to sp'2020/00.. and that might equate to VIX 'briefly' in the low 20s..
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more later... on the indexes

Closing Brief

US equities ended the month moderately lower, sp -10pts @ 2079 (intra high 2094). The two leaders - Trans/R2K, settled lower by -0.1% and -0.3% respectively. Near term outlook is for a natural retrace to the sp'2020/00 zone.. where there are multiple aspects of support. From there... broadly higher into year end.


sp'60min

Summary

*closing action.. new intraday lows.. as the sellers finally appeared....breaking the Thursday low.
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.. and October comes to a close. Essentially, all indexes proceeded straight up.. resulting in rather extreme net monthly gains.

Best guess remains.. a moderate retrace to around sp'2020/00 zone.. by mid November. Broadly.. the bigger bearish scenario is off the table.

Have a good weekend.
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*the usual bits and pieces across the evening to wrap up the day, week... and month.

3pm update - closing hour spooky weakness

US equities see an outright collapse wave from the new cycle high of sp'2094 to a near horrific low of 2084. Seriously though, a break under 2082 in the closing hour would be a minor victory to the bears.. and offer hope that the market has indeed maxed out.. with a natural retrace set to span 2-3 weeks.


sp'60min

sp'weekly1b

Summary

... the last trading hour.. of what has been an absolutely insanely bullish month.

So.. lets see if we can take out the Thursday low of 2082.. with a weekly close in the 2070s. That'd be something.

Regardless of the exact close.. we're still set for a fifth consecutive net weekly gain.
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notable weakness: DIS, -0.9%...

..updates into the close...  if we do break <2082.
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3.03pm.. ohh the humanity... look at the declines!    We've taken out the Thursday low!

Next soft target.. 2080... then the 200dma of 2061.
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3.09pm.. the 3 leader stocks, AAPL, DIS, INTC... relentlessly strong.. are all appearing to rollover...

notable weakness, BAC -1.7%...


3.17pm.. VIX +2.5% .. making a play for a minor net weekly gain in the 15s.


3.38pm... chop chop.. with sp'2084.. and VIX 14.95....

Just a touch of weakness into the monthly close... looks due.

2pm update - melting upward

With two trading hours left of an insanely bullish month, the sp'500 breaks a new cycle high of 2094.. a mere 40pts (2%) away from breaking a new historic high. Bearish thoughts of the 1800s.. or anything lower should have long faded from even the most bearish of bears.


sp'60min

Summary

Price action remains very muted... on what has been a truly bizarre month.

All US indexes are set for the fifth consecutive net weekly gain.

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notable weakness

TSLA, -1.6%

Price action remains a real mess.. and the Aug' low of $195 looks vulnerable, if the broader market retraces to sp'2020/00 by mid November.

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back at 3pm

1pm update - the sun sets on October

US equities remain in nano scale churn mode... mere consolidation of what are extreme net monthly gains for the sp'500 of around 8.8%.. as reflected in equity markets across the world. For the moment, there is no sign of a turn.. although cyclically we are due a down wave into mid November.


sp'daily5

Summary

Little to add.

I realise some out there are still looking for another 0.5-1.0% to the upside before a turn... certainly possible, but things are looking tired, as reflected in a number of stocks like DIS, INTC.

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Here in London city....

Ironically, the sun finally appeared today.. a mere few minutes before sunset.

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back at 2pm

12pm update - minor declines

US equities remain in churn mode... leaning on the weaker side, as the daily cycles continue to slowly turn back toward the bears after what has been a truly bizarre 5 week hyper ramp from 1871 to 2092. It is notable that a number of the old leader stocks - such as DIS and INTC are looking distinctly tired.


sp'daily5

INTC, daily

Summary

Metals are increasingly weak, Gold -$5, with Silver -0.3%.. and that is with the USD -0.7% in the DXY 96.60s. Surprisingly, GDX has managed to build gains of 0.9%.. but those gains look unsustainable.
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First target for the equity bears should be to take out the Thursday low of 2082.. which is an entire 4pts lower. Considering the price action of yesterday and this morning though, a down wave of that magnitude looks lamely difficult.

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VIX update from Mr T.



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back at 1pm

11am update - nano churn

After a minor swing from sp'2092 to 2084 (ohh, the drama!)... we're right back to nano scale price churn. There would seem little to expect from the rest of today.. with the sp'500 set for a net monthly gain of around 8.8%. Commodities are leaning on the weaker side, Gold -$4, with Oil holding flat.


sp'60min

GLD, daily

Summary

The weakness in Gold is stronger than it might seem, as the USD is -0.6%.

For now, the miner ETF of GDX is managing to hold flat... but broadly... its not looking so great.
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notable reversal...

DIS, daily

Opening gains to $115.24, but the sellers are increasingly appearing.... earnings due next Thursday.

Best case downside is arguably the 200dma.. around $108. Anything much under that looks extremely difficult.. not least as the sp'500 is not going to fall to 2000 next week.

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time for lunch

10am update - opening micro chop

US equities open a touch higher, with the sp'500 testing the Thursday high of 2092. The daily MACD cycle is continuing to swing back in favour to the bears. USD is cooling, -0.4% in the DXY 96.80s. Metals are weakening already.. Gold -$3. Oil is back to flat.


sp'daily5

VIX'60min

Summary

*Chicago PMI: 56.2.. a real bullish surprise..  and well above the recessionary 50 threshold.
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Clearly, equity bears need to take out yesterday's low of 2082 to offer a provisional indication we have a short term top.

As things are... other than slight natural cyclical bias to the downside.. there is little to expect from today.. other than tedious micro chop.

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re: daily MACD (blue bar histogram) cycle. At the current rate, we'll see a bearish cross next Wednesday.
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Regardless of the exact close today, the net monthly gains have been extreme... and 'white flag' waving time was arguably a good 100/150pts lower down.

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time to shop.. back soon

Pre-Market Brief

Good morning. Equity futures are a little higher, sp +5pts, we're set to open at a new cycle high of 2094. USD is cooling, -0.3% in the DXY 96.90s. Metals are trying to rebound, Gold +$2. Oil +1.0% in the $46s.


sp'weekly1b

sp'monthly1b

Summary

Unless we see a sig' reversal later today.... the market is set for the fifth consecutive net weekly gain. It would seem the only issue is whether we close a little below... or above the sp'2100 threshold today

More critically, the market will see a monthly close above the 10MA.. and by a rather decisive 2% or so.

The equity bears failed to hold key resistance in October, and there is now little reason to believe it won't be a case of 'broad gains' all the way into late spring 2016.
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Over Asia action...

Japan: +0.8% @ 19083...  resilient.. with an Oct' close in the 19000s
China: -0.1% @ 3382... unable to hold the 3400s, but still... a net monthly gain of 10.8%
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Have a good Friday.

US Bonds update

Whilst equities traded in a very tight range, there was more notable movement in US bonds. TLT settled lower by a rather significant -1.5% @ $121.91. Broader price structure is increasingly tight, with various indicators suggestive that bonds are vulnerable.


TLT, daily

TLT, weekly

TLT, monthly2

Summary

*yes Doug, this post is due to you.
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I realise few care, but the bond market does have relevance for those who only trade equities.

Often is the case, bonds can lead equities, or provide indirect confirmation of an equity turn/move.
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What next for bonds?

Daily cycle... a clear black fail candle at declining resistance a few days ago, confirmed with today's sig' decline.

Weekly: the third consecutive weekly candle with a somewhat spiky top... bearish

Monthly: another blue candle, trading under the monthly 10MA.... a lower high... bearish
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Broadly, bonds look highly vulnerable to much lower levels - first target for TLT would be the $100/95 zone, not least if the Fed does eventually raise rates.. even if only a little.

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Interest rates...

Fed rates, with sp'500

It should be obvious to almost anyone that the US Federal reserve has always been REACTIVE to events, it has never been proactive. Rates have always been raised too late in each economic cycle, and it remains hugely ironic that each time the Fed does cut rates, it is a key signal of impending economic/market doom.
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Closing update from Riley



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Looking ahead

Friday does have an array of data... pers' income/outlays, Chicago PMI, employment costs, consumer sent'

The market is expecting a PMI of 49.2... which by definition is fractionally recessionary.

*Fed official Williams is due to speak at 10am on the 'direction of interest rates'.  I would imagine the market will take some notice of that.
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Goodnight from London

Daily Index Cycle update

US equities closed somewhat mixed, sp -0.9pts @ 2089. The two leaders - Trans/R2K, settled +0.8% and -1.1% respectively. Near term outlook remains seeking a break lower... with at least the sp'2050s viable next week. Primary target by Nov' opex will be around the sp'2000 threshold.


sp'daily5

Trans

Summary

Little to add..

All equity indexes are due a retrace, having seen a massive ramp across the last 5 trading weeks.

First target is the sp'2020/00 zone.. which frankly.. is not that bold a target.
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a little more later...

VIX clawing upward

Whilst equities closed moderately mixed, the VIX was battling across the day to hold minor gains, settling +1.9% @ 14.91 (intra high 15.46). Near term outlook offers an equity snap under soft rising support, with first target of the VIX 18/20 zone next week.


VIX'60min

VIX'daily3

Summary

Little to add.

VIX remains broadly subdued, and it is clearly going to take an sp -30pt day to give the VIX the first opportunity to make an attempt to clear the key 20 threshold.

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more later... on the indexes

Closing Brief

US equities closed somewhat mixed, sp -0.9pts @ 2089. The two leaders - Trans/R2K, settled +0.8% and -1.1% respectively. Near term outlook remains seeking a break lower... with at least the sp'2050s viable next week. Primary target by Nov' opex will be around the sp'2000 threshold.


sp'60min

Summary

*closing hour action: a sporadic nano-scale burst to the upside... breaking a fractional new cycle high of sp'2092.
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A surprisingly subdued day after the FOMC swings, with the sp'500 trading within a tight range of just 9pts.

Frankly, I wish it was Friday afternoon.. but then... I try not to wish my life away.

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more later.. on the VIX

3pm update - 7.2 points

US equities remain in a rather bizarrely tight trading range of a mere 7.2pts. Price structure is arguably still one of a topping formation..  snap level at the Friday open will be sp'2075. VIX is holding minor gains of 2.6% in the 14.70s.


sp'60min

Summary

So.. err... 7.2pts... its not exactly exciting, is it?

Tomorrow can only be more dynamic.. yes?

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notable strength...

AAPL, +1% in the $120s

AAPL is managing to continue climbing after good earnings.... but it looks way over stretched.. and will be vulnerable as the broader market rolls over into next week.
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back at the close.

2pm update - metals having real problems

Whilst US equities remain moderately weak (awaiting a snap <sp'2075)... there is notable weakness in the precious metals. Gold -$10, with Silver -2.6%, having seen a powerful reversal yesterday at the 200dma. Outlook is bearish.. and if correct, that sure doesn't bode well for the related mining stocks.


GLD, daily

GDX, daily

Summary

Broadler price structure on the weekly charts is a giant bear flag.. and is highly suggestive of new multi-year lows.

Gold looks set for the $1000 threshold.. and frankly.. if interest rates are raised at the Dec' FOMC, the gold bugs are going to end the year being utterly destroyed.
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*there will come a grand turning point in the metals/miners.. and I'll sure as hell be the first to tout it.. but for now... it remains a waiting game.
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back at 3pm