With equities seeing some minor chop after the latest FOMC minutes, the VIX remained broadly subdued, settling +0.2% @ 12.88 (intra high 13.27). Near term outlook is for continued broad equity inside into the next FOMC of June 17th, which should equate to VIX remaining within the 15/11 zone.
VIX'60min
VIX'daily3
Summary
*a third consecutive black-fail candle... it does not bode well for those equity bears seeking significant downside in the near term. Indeed, it is indicative that every little equity down wave is being negated very quickly.
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VIX remains broadly subdued, as the equity market continues to periodically break new historic highs in at least some indexes.
The big 20 threshold looks out of range until at least mid June.
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US equity indexes closed somewhat mixed, sp -2pts @ 2125 (new historic high 2134). The two leaders - Trans/R2K, settled -2.0% and +0.2% respectively. Near term outlook remains broadly bullish, at least to the FOMC of June 17th.. which it would seem, will not see a rate hike.
sp'60min
Summary
*closing hour was a bit of a tease to the bears, swinging from sp'2131 to 2124, but yes.. in the scheme of things.. its nothing.
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A relatively quiet day in market land.
Certainly, with the sp'500 breaking a new historic high, there is little for the equity bears to be pleased about.
Transports remains very weak of course, but then one index does not maketh the market.
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After a little chop, the market is seeing some post fedspeak relief, with the sp'500 breaking a new historic high of 2134. VIX remains subdued, -1% in the 12s. USD is somewhat choppy, but still +0.2% in the DXY 95.40s. Metals tried to bounce, Gold +$2. Oil is holding sig' gains of 1.4%.. as inventories continue to decline.
sp'60min
Summary
*the Dow came within 1pt of yesterdays new high
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So.. its turned out to be just another day in favour of the bull maniacs.
re: FOMC minutes. It would seem June is broadly out for a rate hike, but given a few more months.. the FOMC of Sept 17th looks a prime opportunity for the first rate move.
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notable gains.. BABA... breaking into the 90s.
The big gap zone of 92/97 now looks easy... and from there... the giant $100 threshold.
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3.10pm... Airlines still struggling... UAL -9.5%...
3.22pm.. oh noes... indexes turn red... sp -3pts @ 2124..... how can this be allowed?
US equities remain seeing minor chop, with a touch of weakness. The smaller 15/60min equity cycles favour the bulls into the close. VIX is offering a brief jump to the upper gap zone of 13.75 though. USD remains higher for a third day, +0.3% in the DXY 95.50s.
VIX'60min
Summary
Its a little mixed right now. Equities look broadly okay.. the only hope for the bears is the VIX, which on balance will climb into the close.
... awaiting the FOMC minutes...
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notable weakness... airlines.. UAL
Pretty severe, having lost the 200dma. Next support is probably not until $52.50. More on that one later though... on my 'fair value' page.
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2.02pm.. Most Fed officials see June rate hike 'unlikely'
USD initially cools..... metals/oil jump... a little.
Equities still choppy...
............. but overall..... there is nothing in the minutes for the equity bears to get excited about.
2.07pm.. notable strength: BABA +1.7%.. making a play for the $90s
2.18pm.. sp' 2130... next level.. 32/33... new highs now viable.
notable weakness, Ford (F) -1.2%... part of the transports broader weakness
2.32pm.. a short-stop cascade underway... with new historic highs.... for the bears.. its just another day.
USD cooling, now +0.1%... with metals battling to build moderate gains, Gold +$3.
The broader equity market remains in minor chop mode, ahead of the latest FOMC minutes (due 2pm). Hourly equity cycles remain negative, but will offer renewed upside into tomorrow. The USD continues to climb, +0.4% in the DXY 95.60s. Metals remain flat.. and look vulnerable for the remainder of the week.
sp'60min
UUP, daily
Summary
Little to add.... as the market remains in chop mode.
notable weakness, TWTR -2.4%... nothing good about the near term outlook
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time for lunch.. back for the Fed press release
Whilst the broader market remains in chop mode (ahead of the FOMC minutes), there is some distinct carnage in the Transports, -1.9% , so far hitting an intra low of 8508. The widening discrepancy between the 'old leader' and the broader market is something most should be carefully watching.
Trans, daily
Trans, weekly'2, rainbow
Summary
*we have a clear break of the broader upward trend, that stretches all the way back to late 2012.
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So, what to make of this? The 'old leader' is not to be dismissed lightly. Although as some realise, whilst the Trans churned sideways across 2012, the broader market climbed.
notable weakness, airlines, DAL -6%, UAL -7%
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VIX update from the Godfather
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time to cook
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12.21pm.. Someone is hitting the sell button TWTR, -2.0%... daily chart is largely flat lining though... likely dead money into Q2 earnings.
Whilst the broader market is seeing minor chop, the Transports continues to struggle, with an early sig' decline of around -1.3% @ 8555. The smaller 15min cycle is offering the first sign of a turn... but still, it remains a very borderline situation, and the equity bulls should be at least moderately concerned.
Trans'15min
Trans'daily
Summary
*note the black-fail spike candle from last November.. marking a key high.
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Despite many months.. it is notable that the equity bears have had to battle extremely hard just to keep the transports trading largely sideways.
Best guess... Trans to resume UPWARD.. with a key break over declining resistance, currently around 8775.
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notable weakness, airlines, DAL -5%.. UAL -6%...
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**Oil inventories saw a net decline of -2.7 million barrels... for now... it certainly favours another wave higher into the WTIC 65/67 zone.. and that certainly won't help the transports!
11.35am.. Ohoh.. Trans -1.8%.... its starting to get real ugly 8517..... the 8400s would be a major problem
US equities slip moderately lower in early trading, but as usual, there just isn't any sig' downside power. USD is building gains for a third day, +0.2% in the DXY 95.40s. Metals are a touch higher, Gold +$1. Oil is holding gains of 1.2%, ahead of the EIA report at 10.30am
sp'60min
Trans, daily
Summary
*once again... Trans remains especially weak.... arguably, any move <8500 would be a major problem. Best guess... a break >8800... along with sp >2140s by end month.
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A pretty quiet open... we should see some more dynamic action this afternoon with the FOMC minutes (2pm).
notable weakness, airlines, DAL/UAL, both lower by a very sig -4.5%
strength: YHOO +3% in the $42s... but looking very vulnerable
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stay tuned
10.01am.. Trans -1.1%... 8580s.. this is getting pretty close to the border
Huge sell side vol' in the airlines... UAL -5.2%.... getting ugly
Good morning. Futures are flat, we're set to open at sp'2127. The USD continues to rally, +0.2% in the DXY 95.40s. Metals are vainly bouncing, Gold +$1. Oil is similarly trying to rebound, +0.5%, ahead of the next EIA report.
sp'daily5
Summary
So we're set for a quiet open. Not much is due today... just oil inventory data and the FOMC minutes. By the afternoon, hourly equity cycle will be prone to swinging upward again.
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early mover: YHOO, +2.7% in the $42s.
Yesterdays chart highlights the closing hour carnage... as market became concerned about possible tax changes that might affect its Alibaba holding...
5min
A real train wreck of a stock... one I have never traded.. nor would. Although I will keep an eye on YHOO today, if only for entertainment purposes.
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Update from a returning Oscar
Not surprisingly, Mr C is looking for a holiday reversal, I suppose a brief drop of 1-2% is possible before another swing higher into mid June. In any case.. its minor noise, whilst the broader trend remains intact.
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Doomer chat, Hunter with Kirby
Some truly kooky chatter, as ever, make of that... what you will.
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With the USD rallying for a second consecutive day, +1.2% @ DXY 95.36, commodities were under some downward pressure. WTIC Oil settled -3.9% @ $57.99, Gold -$16, with Silver -3.0%. USD looks set to make a play for the 96s within the near term, but a key floor is not likely yet in.
USD, weekly
WTIC Oil, weekly'2
GLD, daily
Summary
To be clear, last week did not feel like a key floor/turn in the USD. My best guess is for renewed weakness after what will probably be a 1-2 week bounce. A key floor in the DXY 90/89s looks due.. before a hyper-ramp to the 120s.
As for Oil... it remains a tricky commodity to project an outlook, but if the USD makes a lower low in June/July, then WTIC has a fair chance of renewed strength to the mid/upper $60s. I do not expect sustained action in the $70s this year.
Finally.. the precious metals..which still look set to break new multi-year lows. Key support for Gold is $1130, which equates to GLD in the 109s. Broader target remains Gold $1000, with Silver 12/10.
*I remain short Gold - via GLD, am seeking an exit in the 113s before this weekend.
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Looking ahead
Wednesday will see the latest EIA oil report, but far more importantly.. the FOMC minutes (due 2pm). The algo-bots will no doubt be very prone to snapping the market one way or the other.
*Best guess... the broader upside continues into the sp'2140/50s before end month. By the FOMC of June 17th, the sp'500 could be trading in the 2170s.. which would also be an important hit of the upper bollinger on the giant monthly cycle.
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The hyper bullish scenario
Since the market broke and held the sp'1500s in summer 2013, I've been resigned to broad upside.. rather than the original deflationary target of sp'500/Dow 5K or so.
One of my Youtube subscriptions - Mr H, posted the following today. It is provoking, and will no doubt annoy many of the more resistant uber-doomers...
Dow 54k is indeed a viable scenario.. even across just a couple more years. Armstrong (whom most of you will know I often agree with), is similarly open to a hyper-bullish scenario of Dow 40K in 2017.
As ever, things can always change (not least if War or natural disaster), but with low/negative rates, continuing QE from central banks across the world, there really is only one place for most of the money to go... the global equity market.
*it was nice to hear from a few of you today, whether via Disque/email/messenger. Things can be a little quiet sometimes, as this crazy market has driven so many good people away.
US equity indexes closed moderately mixed, sp -1pts @ 2127 (intra
high 2133). The two leaders - Trans/R2K, settled lower by -0.8% and -0.1% respectively.
Near term outlook remains bullish into the next FOMC of June 17th... at
which point the sp'2170s are viable.
sp'daily5
Dow
Trans
Summary
*notable new historic highs in the Dow (18351), and the sp'500 (2133).
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So, the broader market is still periodically breaking new historic highs. The laggard remains the Transports, which was especially notably today considering the significant net daily decline in WTIC Oil of -3.9% @ $57.99.
Best guess.. the Trans to break above declining resistance.. >8800, along with new Nasdaq making new historic highs >5132.
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