VIX fails to breakout

Equity indexes saw moderate weakness across the day, but it was not enough to push the VIX into the 14s (intra high 13.99), settling +0.3% @ 13.31. Near term outlook is uncertain, and will be largely dependent upon whether the USD will cool into June/July.. or break back above the giant DXY 100 threshold.


VIX'60min

VIX'daily3

Summary

*a daily black-fail candle.. with a bearish spike, it certainly bodes more in favour to the equity bulls.
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A day of major disappointment for the equity bears, as entirely reflected in the VIX.

The big VIX 20 threshold looks out of range for some weeks. If the USD cools across June/July, equities will battle upward, and the notion of VIX 20s can be dropped until Aug/Sept.
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more later... on the indexes

Closing Brief

US equities closed moderately weak, sp -2pts @ 2120 (intra low 2112). The two leaders - Trans/R2K, settled -0.9% and -0.1% respectively. Near term outlook is increasingly uncertain. If the USD has maxed out in the DXY 97s, then renewed equity upside will be likely across June.. and probably into July.


sp'60min

Summary

*a closing hour of very minor chop, absolutely nothing for the bears to be pleased about.
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A tiresome Thursday.

A day when the equity bears failed to show any real downside power... as reflected in a VIX that was unable to break into the 14s.

The transports remains exceptionally weak, but as ever.. it is just one index.. and the broader market remains well within its primary upward trend.
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more later...on the lowly VIX

3pm update - tiresome Thursday

For the equity bears, it has been a tiresome Thursday, as most indexes are now battling to turn positive by the close. VIX is failing to show any upside power, and is now vulnerable to a red close. USD remains in cooling mode, -0.4% @ DXY 97. Gold +$2. Oil has turned positive, swinging from -2% to +0.2%.


sp'60min

Trans, daily

Summary

*Transports remains significantly weak, but certainly... the broader market isn't following.
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Little to add.

A failed down wave, any move above sp'2123/24 would negate what hope there is for the bears.
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3.38pm.. The chop continues... price structure is still a bear flag (just)... but really... it'd seem everything is now dependent on how the market interprets tomorrow's econ-data.. along with overnight Asian markets.
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2pm update - bear flag or higher low?

US equities remain moderately weak, sp -6pts @ 2117. Price structure is offering a bear flag, but it could certainly also be deemed a higher low from 2099. USD is in cooling mode, -0.3% @ 97.00s. Metals are a touch higher, Gold +$2, whilst Oil is -0.7%.. but well above the earlier low.


sp'60min

VIX'60min

Summary

It is getting somewhat tiresome in market land. 

Price action is increasingly choppy... if a touch on the weak side.

Worse case for the bears... some nonsense excuse tomorrow morning.. and we'll close the month close/at new highs (at least for sp'500).

Best case... overnight Asia weakness.. and lousy Friday morning (GDP/PMI) econ-data...with a break back under sp'2100.. opening the door to a move to 2080/75.
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My guess? Daily cycles are bearish.... and the Transports certainly supports that view.
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stay tuned.
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2.22pm.. Oh great... stockcharts has just gone nuts.. all the charts...

Urghh. Someone had better reboot the server.

1pm update - Trans breaks a new multi month low

Whilst the broader market is only moderately lower - and holding above the Tuesday low, there is significant weakness in the Transports, -1.2% @ 8338... back to levels from last October.  VIX continues to battle for a break into the 14s. Metals are flat, whilst energy prices are very weak.


Trans, daily

USO, daily

Summary

*USD is cooling, -0.2% in the DXY 97.13s. All things considered, Gold/Oil are not performing well today.
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So... Transports continues to fall.. despite Oil prices also falling. What to make of it?

Well.. they don't call it the 'old leader' for nothing. Dwell on that thought for an hour.
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notable weakness: oil/gas drillers, RIG -3%, SDRL -7%

strength: TWTR +1.9%.. a few 'bargain hunter' momo chasers?

12pm update - still moderately weak

US equities remain moderately weak, and unlike Tuesday, the bears aren't yet showing any significant downside power. USD has turned a touch lower, which has helped metals and Oil recover from early lows. VIX is battling to break into the 14s.


sp'60min

vix'60min

Summary

*action in the metals (and Oil) remains broadly weak.. I'm still short Gold, am waiting to exit on the next sig' wave lower. Maybe I'll get lucky tomorrow.
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Perhaps the equity market will see another wave lower this afternoon, but for now.. this is clearly not as good as some were seeking.

notable weakness: AA -1.4%... the lowest level since April 2014... seemingly headed for $10/9

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*Nat' gas report showed a much bigger build than expected of 112bcf  vs 92.

As a result, Nat' gas is lower by around -4%
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VIX update from Mr T



Hmm, some interesting, and important changes for VIX traders.
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time to cook... maybe

11am update - moderate weakness

US equities remain moderately lower, sp -7pts @ 2115. VIX is reflecting only a touch of concern, +3% in the 13.70s. USD is battling to hold the mid DXY 97s. Metals are a touch weak, Gold -$1. Oil is seeing sig' falls of -1.8%.. ahead of the EIA report (11am).


sp'60min

vix'60min

Summary

A marginally interesting morning.. but clearly.. its nothing for the bears to get excited about yet.

At the very least, bears need a daily close <2110.. along with VIX 14s... that would keep the door open to increasing weakness into the monthly close.
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 notable weakness: energy stocks, CHK -3%, SDRL -5%

strength: TWTR +1.9%... I've no idea why, although in the scheme of things, the stock remains utterly smashed since recent earnings.
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awaiting the Oil report....

11.02am.. a net fall of -2.8 million barrels... similar to last week.

Oil jumps 1% on the report... but still.. net lower by -1%

10am update - opening weakness

Equities open a touch weak, with the hourly cycle offering sp'2100 this afternoon. USD is clawing higher, +0.2% in the DXY 97.50s. Metals are weak, Gold -$5, whilst Oil is seeing sig' weakness, -1.5% in the $56s.


sp'60min

vix'60min

Summary

Well...  the setup is there.... now its simply a case of whether the bears have any sustained power to resume the downside we saw on Tuesday.

Commodities are naturally under particular pressure as the USD is threatening a jump into the DXY 98s later today.
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notable weakness: energy stocks, RIG -3%, SDRL -4%...as Oil continues to fall

Pre-Market Brief

Good morning. Futures are moderately lower, sp -5pts, we're set to open at 2118. USD is u/c in the DXY 97.40s. Metals are a touch weak, Gold -$1, whilst Oil -0.2%... ahead of the next EIA report.


sp'60min

sp'daily5

Summary

*awaiting jobs, pending home sales, and the EIA report.
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Early price action is much like Tuesday.

First downside target is the Tue' low of sp'2099... that is certainly a fair way lower, but looks very viable by the close.

If we do see a sig' net daily decline, it will bodes well for the equity bears tomorrow... to hit a target of 2080/75. That would make for a marginal net monthly decline.

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Overnight action.. China made a play for the 5K threshold... hit a new 7yr high of 4986, but then cooled. Late in the session there was a rather severe sell down, settling -6.5% @ 4620.

Yes, the decline is a powerful move, but with the SSEC having soared from 2K last summer.. these sort of brief and sharp drops are to be expected.. not least the higher it climbs.
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Update from Oscar



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Have a good Thursday

The USD variable

The USD saw a fractional net daily decline, settling -0.03% @ DXY 97.38 (intra high 97.88). There appear two scenarios for this summer, either renewed cooling to the secondary bearish target of DXY 90/89.. and then the 120s, or a straight up move to the 120s. Regardless of the near term, USD looks increasingly strong into 2016.


USD' daily'2, outlook

USD' weekly

Summary

I have had a fair few posters understandably tell me lately that the USD is not the be-all determinant for the US capital markets this summer.

I would absolutely agree that the USD is just one of many variables, but it is surely one of the most important, certainly in the top three.

Without question though, a stronger dollar puts downward pressure on most $ denominated asset classes. For anyone watching the precious metals or Oil recently, this is especially the case.


Two scenarios

More than anything, I want to emphasise that even if the USD cools across June/July.. perhaps as low as DXY 90/89, the broader trend remains exceptionally bullish.. at least to the DXY 120s. Whether that occurs in a hyper-spike before year end.. or not until late 2016, I really don't think it particularly matters.

Best guess for the near term? Some kind of Greek deal is reached.. with the can kicked another few months forward.. with the Euro rallying.. and the USD cooling.

If that is the case, then the precious metals will be helped a little, and more so.. WTIC Oil. There still appears possible renewed upside to $65/67 or so.

Best case equity upside remains at the monthly upper bollinger - currently in the sp'2170s. In the scheme of things though, we're only talking about another 2% higher.
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Looking ahead

Thursday will see the usual jobs data, pending home sales, and the latest Oil and Nat' gas inventory reports.
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Goodnight from London

Daily Index Cycle update

US equity indexes closed with somewhat significant gains, sp +19pts @ 2123 (intra high 2126). The two leaders - Trans/R2K, settled higher by 1.1% and 1.3% respectively. Near term outlook offers sig' weakness into the weekend, with a target of 2080/75.


sp'daily5

Trans

Summary

*Trans remains the big laggard, and remains under the old floor of the 8500s. First upside target is declining resistance in the 8700s, but that looks out of range for at least another 7-10 trading days.
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As for the sp'500, clearly, a day for the equity bulls.. but there still looks to be viable renewed downside to the 2080/75 zone within the next 2-3 trading days.

The 200dma is offering core support in the 2040s... with the giant psy' level of 2K unlikely to be broken for some months.
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Closing update from Riley



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a little more later...