Monday 30 November 2015

VIX moderately higher

With equity indexes settling moderately lower, the VIX was naturally on the rise, settling +6.7% @ 16.13. Near term outlook offers renewed equity upside, at least to the 2115/20 zone, with 2150/70 before year end. Sustained action above the VIX 20 threshold looks out of range.


VIX'60min



VIX'daily3



Summary

Little to add.

VIX broke above declining trend... but even the 17s look out of range in the immediate term.

--

more later... on the indexes

Closing Brief

US equity indexes closed moderately weak, sp -9pts @ 2080. The two leaders - Trans/R2K, settled lower by -1.4% and -0.4% respectively. Near term outlook remains broadly bullish, at least to the sp'2150/70 zone, which appears highly probable.


sp'60min


Summary

*closing hour action: mostly chop, but with a notable new intraday low of 2080 at the close.
--

.. and November comes to a close.

Without question, after the hyper-gains of October, the equity bears managed to only pull the market down to sp'2019... and from there, we are making another attempt at new historic highs (at least in some indexes).

The sp'2100s seem extremely likely this week, and Mr Market will surely at least want to keep pushing to the 2115/20 zone.

-
more later... on the VIX

3pm update - another month comes to a close

November trading is set to close with the sp'500 moderately net higher, having solidified a higher low of 2019. December offers the 2115/20 zone in the immediate term, with new historic highs - 2150/70, before year end... whether the fed raise rates... or not. Oil is notably weak, -0.9% in the $41s


sp'monthly3


USO, daily2


Summary

*note the second consecutive green candle, it sure ain't bearish.
 --

A quiet start to the week... but price action will likely significantly favour the equity bulls as the week proceeds.
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notable movers...

TWTR -2.2%... as the momo chasers sure aren't interested in this mess

INTC +1.1%... underlying momentum remains very strong... even on a quiet day.

CREE +2.2%... broadly strong... from the $22s to 27s, set for the 29/30 zone.

--
back at the close

2pm update - battling to turn positive

With two hours left of the trading month, US equity indexes are battling to close marginally positive. Regardless of the exact close though, the equity bears FAILED to negate the hyper gains of October. The sp'2100s remain due.. with the 2150/70 zone viable as early as the next FOMC of Dec'16th.


sp'60min



Summary

Underlying MACD (blue bar histogram) cycle is starting to tick upward, and at the current rate, we'll see a bullish cross at the Tuesday open.

A challenge of the last key cycle high of 2116 looks due later this week. Any action >2120.. and it'll be a straight run to the 2150/70 zone.

Without question... this is no market to be short.
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BAC, daily2


Another failure to achieve a monthly close above the key $18 threshold... but Dec' looks probable.. so long as the Fed don't back out on a rate rise!

--
back at 3pm

1pm update - oil stocks upgraded

Whilst the main equity indexes remain mostly choppy, there is increasing attention on Oil stocks, as Guggenheim issued a buy on 23 stocks. Oil itself has cooled from earlier sig' gains, fractionally lower, around the $42/41 division.


RIG, daily



USO, daily2




Summary

Suffice to say, in the short term at least... oil and related stocks, look far more vulnerable to the upside.. than to break new lows.
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*I've eyes on BAC, price structure is an increasingly clear bullish pennant, but more on that later.

12pm update - moderately weak

US equity indexes are moderately lower, with the sp' breaking a new intra low of 2082. The sp'2100s look due.. but clearly... not for the November close. As things are, the sp'500 is still on track for a fractional net monthly gain.. due to settle somewhere in the 2085/95 zone.


sp'60min



sp'monthly


Summary

Not much to add, as the end month chop continues.

There are certainly some interesting individual movers though...

oil/gas drillers: APC +1,1%, RIG +2.8%   

CREE +1.5%.. still on track for the 200dma in the $29s

GDX +2.1%.. .as Gold holds moderate gains of $6.

--
VIX update from Mr T.



--
time for tea :)

11am update - no significant downside pressure

US equities have likely seen the low of today @ sp'2084, with VIX maxing out at 16.19. A break into the 2100s looks due within the near term. USD continues to hold the giant DXY 100 threshold, on track for a net monthly gain of around 3%.


sp'60min



Summary

So.. a lot of chop... but it should be clear, there simply isn't any sig' downside pressure. It is merely a matter of time before Mr Market starts systematically running multiple sets of stops in the sp'2100s.

It is month end of course..  by definition... choppy... the real direction should come this Thurs/Friday.
--

notable strength... oil/gas drillers

APC, daily


The floor looks secure.. and the $70s look due.

--
time for an early lunch

10am update - opening minor gains

US equities open a little higher, as underlying price pressure remains to the upside. Sustained action <sp'2080 looks unlikely today.. and this week, as the sp'2100s look a given. Gold +$3. Oil +0.6% in the $42s.


sp'60min


VIX'60min



Summary

*Chicago PMI: 48.7... and that IS recessionary, a valid excuse for the Fed not to raise at the Dec' FOMC.
--

A fair bit of minor chop to start the week.... as Mr Market battles to pick a direction, and run with it.

Yes, the VIX looks like it wants to break up and out... but... I'm guessing. no.
--

notable opening weakness...

DIS,daily


.. and I like DIS at this level, having cooled from $120.

Pre-Market Brief

Good morning. US equity futures are a little higher, sp +4pts, we're set to open at 2094. A move to the sp'2110s looks due in the near term. USD is +0.1%... holding above the DXY 100 threshold. Metals are u/c, whilst Oil is -0.2%.


sp'60min


Summary

*Chicago PMI data (9.45am)... econ-bulls should be looking for at least 53/55.
--

A little overnight chop in futures land... with the smaller 15/60min equity cycles offering upside across today. A daily close in the 2100s is very viable.

Last weeks low of 2070 looks pretty secure... as the market now looks toward the ECB and the Friday jobs data.
-


Update from Oscar



--

Doom chatter from Hunter, with Martenson



Like many of the doomers, I think Mr M' has almost completely lost his mind in the last few years. Its the same spiel in almost every single interview, I suppose some will tout that 'he'll eventually be right'. For the moment though... its largely hysteria talk.
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Overnight Asia action

Japan: -0.7% @ 19747... unable to close >20K

China: an early afternoon low, -3.3% @ 3327, but seeing some 'magical' late day recovery, settling +0.3% @ 3345. For the month, the Shanghai comp' was +2.0%... sitting on old support.

Frankly, China bulls should be very relieved at how the day/month closed.
--

Have a good Monday

Saturday 28 November 2015

Weekend update - US weekly indexes

It was a very mixed week for US equity indexes, with net weekly changes ranging from +2.3% (R2K), +0.1% (sp'500), to -1.0% (Trans). Near term outlook remains bullish into year end.. and probably all the way into mid/late January.


Lets take our regular look at six of the main US indexes

sp'500


With it being a short trading week, it was not exactly surprising that the entire range for the week was a mere 25pts (2070/95). The weekly candle is offering a spike floor, and is suggestive of a push into the 2100s in early December.

Underlying MACD (blue bar histogram) cycle remains positive, and has viable upside all the way into next January. With the upper bollinger at 2161, there is plenty of room for the market to break new historic highs (>2134)... with the 2200s viable in January.

Equity bears have absolutely nothing to tout unless a break back under the key psy' level of 2000.

Best guess: year end 2150/70.. with 2225/50 by late January, then a moderate correction of 4-6%.
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Nasdaq comp'


The tech' saw a moderate net weekly gain of 0.4% @ 5127. New historic highs (>5231) look due within 1-3 weeks. From there.. next levels are 5500, 6K.


Dow


The mighty Dow saw a net weekly decline of 25pts (-0.1%).. but holding well within the upward trend from the Aug/Sept' lows. First target is the May high of 18351.


NYSE comp'


The master index settled +0.1% @ 10450. Further upside to the 10800/900s looks due into January.


R2K


The second market leader - R2K, lead the way this week, with a rather sig' net weekly gain of 2.3%, managing an important weekly close above the 1200 threshold. Further upside to the 1230/40s looks due.


Trans


The 'old leader' - Trans, continues to struggle, with a net weekly decline of -1.0%. Underlying MACD cycle remains positive, but there is clearly still some underlying weakness. Equity bulls need to see sustained action back above the 200dma (8393). A break <8000 would be a VERY serious problem, and would open the door to downside..  at least to the 7500s.


Summary

Broadly, the upward trend from the Aug/Sept' lows remains intact for ALL US indexes.

The disparity between the two leading indexes - Trans/R2K, merits some attention though. If the Transports can't hold 8K.. it would arguably be an early warning of trouble for the broader market.

For the moment though, equities look set to continue pushing higher into early 2016.. with new historic highs in the Dow, sp'500, and Nasdaq. If that is the case, it is hard to imagine that even the Transports won't follow to some extent.


--
Looking ahead

A very busy and dynamic week is ahead, not least with the last key data point (monthly jobs), before the Dec' FOMC.

M - Chicago PMI, pending home sales
T - PMI/ISM manu', construction
W - ADP jobs, produc'/costs, EIA report, Fed beige book (2pm)

T - weekly jobs, factory orders, PMI/ISM service sector

*ECB policy meeting/press conf'.. where Draghi might well announce (or at least threaten) new QE initiatives.

F - monthly jobs, intl. trade, OPEC bi-annual meeting


*notable fed appearances

Yellen: Wed' talking to the 'Economic club of Washington'. Thurs' testimony to US econ' committee. The latter event will likely get blanket TV coverage.
--


No shorts for yours truly, at least in the near term.

As has been the case since I waved the white flag (sp'1950s)... I'm holding to a no-shorts policy. Lately, I'm merely taking sporadic long positions in individual stocks.

In my view.. with most US indexes set to close above the monthly 10MA for a second consecutive month, there is ZERO reason to be short. I would imagine the equity bears are effectively locked out of the market until late spring 2016.

Back on Monday

Another round of Chinese witch hunts

Whilst the US market ended the week on a naturally quiet note, there was serious upset in Chinese equities. With the communist leadership launching renewed witch hunts against anyone who dares suggest.. or actually short equities/commodities, the Shanghai comp' is looking vulnerable.


China, daily



China, monthly



Summary

It is not at all surprising to have read more reports that the Chinese leadership have launched a new round of witch hunts. It is though... very disappointing.

With the Shanghai comp' having successfully re-taken old support of the 3400s, it was getting rather close to re-taking the monthly 10MA (3713). Yet with a net Friday decline of -5.5% to 3436, November is instead going to end on a rather dowdy note.

If Monday closes net lower by more than -1.6%, it'll make for a bearish closing monthly candle.. with a very clear spiky top.. indicative of a significant failure to re-take the 10MA.


Implications of more witch hunts

Aside from merely distorting the natural buy/sell side in the market, the continued 'blame the shorts' will not solve the underlying structural problems.

China is still a rapidly evolving economy, but one that goes against the very basis of what the communists believe in. As has been the case since the 1980s.. it remains a very strange situation.

Goodnight from London
-

*the weekend post will be on the US weekly indexes

Friday 27 November 2015

Daily Index Cycle update

US equity indexes closed naturally subdued, but leaning on the positive side, sp +1pt @ 2090. The two leaders - Trans/R2K, settled higher by +0.5% and +0.3% respectively. Broadly, the market looks set to battle upward.. with new historic highs in the Dow, sp'500, and Nasdaq before year end.


sp'daily5



Trans


Summary

*first upside for the transports remains the 200dma.. currently @ 8393.
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The sp'500 looks poised for a break back into the sp'2100s, but there will be clear resistance in the 2115/20 zone.

Regardless of any sporadic sig' net daily declines in the days ahead, new historic highs in the Dow, sp'500, and Nasdaq look due before year end.

--
a little more later...

VIX knocked lower into the weekend

With equities closing subdued - but leaning on the higher side, the VIX settled -0.5% @ 15.12. Outlook into year end is offering a brief VIX spike higher.. but sustained action above the key 20 threshold does not look possible.


VIX'60min



VIX'daily3



VIX'weekly


Summary

*net weekly decline of -2.3%
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Little to add.

The VIX was knocked lower into the weekly close.. as is often the case.

There is clearly plenty of time for the market to see another brief washout before year end, but what should be clear, sustained action above the VIX 20 threshold looks very difficult.

*I have ZERO interest in being long the VIX until late spring 2016... at the earliest.
--
more later.. on the indexes

Closing Brief

US equity indexes closed naturally subdued, but leaning on the positive side, sp +1pt @ 2090. The two leaders - Trans/R2K, settled higher by +0.5% and +0.3% respectively. Broadly, the market looks set to battle upward.. with new historic highs in the Dow, sp'500, and Nasdaq before year end.


sp'60min



Summary

.. and the short holiday week comes to a close.

Buy low.. sell high

On clown finance TV, one of the better host, Mr G, surrounded by children.

No doubt.. someone from Goldman Sachs would merely see such a picture, and wonder if they can be packaged into some kind of multi-tier credit default swap.
--

There really isn't anything to add... so I shall merely say...

Have a good weekend :)
--

*the usual bits and pieces across the evening.. to wrap up the day

12pm update - a mixed weekly close

US equities are set to close the week naturally subdued. In terms of net weekly changes, there is quite a strong disparity between the two leaders - Trans/R2K, currently -0.9% and +2.2% respectively. The 'old leader' sure is struggling.. despite broadly low energy/fuel prices.


sp'60min


sp'weekly1b


Summary

*I'll cover the weekly indexes in depth this weekend.
-

Suffice to add... despite the broad market naturally subdued.. there is plenty of action going on....

DIS -3.2%

Oil/gas drillers, RIG -2.6 , SDRL -3.2%

GDX -2.2% , as Gold -$13.

--
back at the close (1pm) to wrap up the week

11am update - problems in Disneyland

Whilst the main indexes are trading (naturally) muted.. there is very significant weakness in Disney (DIS), -3.6% in the $114s. Next support is the 113/112 zone. Sustained price action under the 200dma (109s) looks completely out of range... not least as Star Wars hysteria continues to grow.


DIS, daily


Summary

*note how DIS got stuck at the upper end of the price gap zone, from the earnings snap in early August. Kooky how that often happens, right?
--

The ESPN data sure wasn't pretty, but that is a small part of Disney, and I'd expect new historic highs.. whether late Dec', or early January.

I'll consider going long DIS next Monday.
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Oil remains weak... but holding the key $40 threshold...

USO, daily2



--
Meanwhile... here in London city...


This is as close to sunshine as it came today.

--
time for an early lunch

10am update - Gold breaking new lows

Whilst equities open with mixed chop, there is notable action in the precious metals. Gold is -$12, having broken a new multi-year low of $1051. The giant psy' level of $1000 looks an easy target... the only issue is whether that occurs before year end.. or early 2016. The related mining stocks are naturally being impacted.


GLD' daily



GDX, daily



Summary

For the gold bugs.. its about as bad a post-thanksgiving return to the market as possible.

Its not so much that Gold/miners are lower.. but that we're regularly breaking new multi-year lows. By definition... with new lows... there is zero sign of a turn.. and I'd expect Gold in the $900s next year.

As many recognise.. higher rates are bearish precious metals... and the related mining stocks.
--

Santa at the NYSE... again
--
time to shop....... back at 11am

Pre-Market Brief

Good morning. US equity futures are a little higher, sp +4pts, we're set to open at 2092. USD is +0.2% in the DXY 100.00s. Metals are naturally weak, Gold -$8. Oil is -1.8% in the $42s.


sp'60min


Summary

*market closes today at 1pm.
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There is threat of downside to the sp'2085/80 zone this morning... but regardless we're still broadly headed higher.

notable early movers...

DIS -2% in the $116s, on ESPN subscriber problems

Oil/gas drillers, RIG -0.9%, SDRL -3.1%.. as Oil is again weak

--
Notable stock....

KBIO, daily


This is the stock that wrecked trader JC. I'd not looked at it in a week, and it seems it exploded again... from 14 to the $40s. Insane short-squeeze.
--

Overnight Asia action

Japan: subdued, -0.3%. Still not able to re-take the 20K threshold.

China: quiet open... but then a MASSIVE upset as China goes after brokerages... -5.5% @ 3436. This is a seriously bad end to the week.. and with one day left of the trading month... the November close will not be bullish.
--


What am I planning today?

I've eyes on a few things... but might sit it out until after the weekend. Certainly though... I will NOT short anything... least of all the main indexes.

Have a good Friday.
 --

8.11am.. Gold breaks a new multi-year low... -$12 @ 1058.. as the short term long-stops are taken out. Next support is clearly the giant psy' level of $1000

the related miners are naturally being dragged lower, GDX -1.3%


8.20am.. Gold -$15 @ $1054.... what a truly lousy post-thanksgiving return to the market for the gold bugs. 

Thursday 26 November 2015

King Dollar flirting with DXY 100

Whilst equities saw a day of nano scale price chop, there was notable strength in the USD, which briefly traded back above the giant psy' level of DXY 100 (intra high 100.23). A November monthly close >100 looks a little difficult.


USD, monthly



USD, weekly



Summary

Price structure is a clear giant bull flag, as better seen on the weekly/monthly charts.

The DXY 100 threshold is clearly huge resistance.. and we did see some notable cooling from DXY 100 today.


Re: Interest rates...

If no rate rise... USD will dramatically cool.... there is little doubt of this.

If a rate rise... USD might still see a brief cooling, as a 'sell the news' event. Broadly though, the USD should merely put in a higher low (likely 96/95) in Dec/Jan, before breaking and holding DXY 100.

--

Looking ahead

Thursday: US markets are closed, but the rest of the world will certainly be open.

Friday: no scheduled data.... with the market closing early at 1pm
--

Goodnight from London

Daily Index Cycle update

US equity indexes closed mostly subdued, sp -0.3pts @ 2088. The two leaders - Trans/R2K, settled u/c and +0.8% respectively. Near term outlook offers further upside into the 2100s, with new historic highs in the sp', Dow, and Nasdaq before year end.


sp'daily5



Trans



Summary

Suffice to add... a very natural day of nano scale price chop... as most traders were leaving for the Thanksgiving break.

The sp'500 looks set for the 2100s... the only issue is when we'll see the 2150/70 zone.. not if.
--

Closing update from Riley



--
a little more later...

Wednesday 25 November 2015

VIX melts lower into Thanksgiving

Whilst US equities saw a day of nano scale price action, the VIX naturally melted lower into the holiday break, settling -4.6% @ 15.19. Near term outlook offers further equity upside into the sp'2100s... and that will likely equate to VIX going sub-teens in early December.


VIX'60min



VIX'daily3



Summary

The equity market was naturally very subdued, and in such cases, the VIX melting lower was not at all surprising.

VIX looks set to remain broadly subdued.. and likely hit the 12/11s... before year end. The only issue is whether we'll see another brief burst to test the key 20 threshold.

As things are... both such events are not mutually exclusive.

--
more later... on the indexes

Closing Brief

US equity indexes closed mostly subdued, sp -0.3pts @ 2088. The two leaders - Trans/R2K, settled u/c and +0.8% respectively. Near term outlook offers further upside into the 2100s, with new historic highs in the sp', Dow, and Nasdaq before year end.


sp'60min


Summary

*a touch of weakness into the close, but well above first support of the lower hourly bollinger @ 2078 or so.
--

A daily range of 6.7pts... just 0.3%... not surprising though... as a lead into the holiday.

The smaller 15/60min cycles offer opportunity for minor weakness to the sp'2085/80 zone on Friday morning, but from there... renewed upside.. at least to the 2110/20s.

-
To all my American readers out there... have a good Thanksgiving holiday break.

--
*the usual bits and pieces across the evening.. to wrap up the day.