VIX climbs into end month

With equities falling into the May close, the VIX battled higher, settling +4.0% @ 13.84 (intra high 14.43). The VIX saw a net weekly gain of 14.1%. Near term outlook offers further equity weakness to the sp'2080s, which should equate to VIX 16s.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Suffice to add... the VIX climbed 3 days of this shortened 4 day week.

VIX 15/16s look due next week, if sp'2080s... but from there.. the equity market looks due another up wave into the next FOMC of June 17'th.

By then.. we could be looking at sp'2160/80 zone... which would certainly equate to VIX back in the 11s.. perhaps even 10s.
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more later... on the indexes

Closing Brief

US equity indexes ended the month on a moderately negative note, sp -13pts @ 2107 (intra low 2104). The two leaders - Trans/R2K, settled lower by -0.8% and -0.5% respectively. Near term outlook is for further weakness next week to around 2080. From there, renewed upside to 2160/80 zone in mid/late June.


sp'60min

Summary

*a naturally choppy closing hour, and it bodes in favour of the equity bears next Monday.
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... and another week.. and month comes to a close.

Without question, it was a month for the equity bulls, with net monthly gains for most indexes, along with a set of new historic highs in some, but most certainly, not all indexes.

June should be... rather interesting

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

3pm update - falling into end month

The micro bear flag is playing out, with US equities set to fall into the monthly close. Regardless of the exact close though, it has been a month for the equity bulls, with net monthly gains for most indexes, along with some new historic index highs.


sp'60min

sp'monthly

Summary

*as ever.. for the chart technicians.. the monthly closes will be rather important.. including the USD, precious metals, and Oil.
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Well.. its nice to see another bear flag play out as expected.

The only issue now is how many of the rats will want to bail into the weekend. I'd guess.. at least enough to offer a chance to settle under the sp'2100 threshold.
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updates... into the close


3.06pm.. sp'2107...   VIX 14.10....  still potential for further weakness into the close.. as the rats will surely want OUT.


3.15pm.. Its getting a little choppy.. but then its end month... sp'2111... still looking for further weakness into the close.

*metals set to close with minor gains, Gold +$2, Silver +0.2%


3.36pm... chop chop.. sp'2110... VIX 13.80s.... STILL seeking weakness into the close.

notable weakness, copper miners, FCX -2%, TCK -4%.... Copper itself is net lower on the month... it bodes badly for Gold/Silver this summer.


3.49pm.. end month chop... confusing many... but still... we're closing moderately weak.

*a big R2K re-balancing due.... 

back at the close !

2pm update - time for some latter day weakness

US equity indexes remain moderately weak, and look highly vulnerable to weakness for the remaining two trading hours of May. Price structure is a bear flag on the micro 5/15min equity cycles. USD remains a touch weak, -0.1% in the DXY 96.80s.


sp'60min

sp'daily5

Summary

*note the lower bollinger on the daily cycle... offering the low 2080s early next week.
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I realise some will be calling for new highs from the earlier floor of sp'2104, but broader upside looks unlikely until the Greeks come to an agreement later next week. As ever though.. any agreement will merely kick the can for another few months.. if not just weeks.

It should be clear to most now that Greece will initiate some kind of exit.. .whether a partial debt default.. and/or an outright switch back to the Drachma.

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*Oil is holding powerful gains of 4.3%.

There is the bi-annual meeting of OPEC next Friday June 5th... it would seem likely supply will NOT be cut, with WTIC Oil having ramped from the March low of $42s to the current $60.

There looks to be upside to 65/67 by late June/early June. Sustained price action in the $70s looks VERY unlikely for the rest of this year.
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2.31pm.. sp'2108... with VIX back in the 14s.      90mins for the bears to spook the market with a monthly close <2100... along with VIX 15s

1pm update - a little chop

The sp'500 has seen a moderate ramp from 2104 to 2115... along with a VIX that has cooled back into the mid 13s. Broadly though, market looks set for some latter day weakness. USD appears floored, and looks set to close in the DXY 97s... which will put some downward pressure on most asset classes into the monthly close.


sp'60min

Trans, daily

Summary

*not surprisingly, the Trans remains the weakest index today.. having made another new cycle low in the 8200s.
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So.. an 11pt bounce to 2115... no doubt that has probably shaken out a fair few of the day-trading bears.

All things considered though, the market looks set for renewed weakness into the close. There is little reason why at least some of the rats won't be bailing ahead of the weekend.
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notable strength: tech, INTC +1.4%.. although off the earlier high

12pm update - weakness before the next can kick

US equities remain weak ahead of what will surely be another Greek can kick next week. Best guess... sp'2090/80 zone early next week - along with VIX 16s.. before another wave higher into mid June. A tag of the upper weekly/monthly bollinger (2160/80 zone) still seems probable.. before an intermediate top.


sp'60min

sp'daily6 - bol/keltner bands

Summary

*a rare look at chart daily'6, the point is that sustained action <2080 looks unlikely in the near term. Renewed upside to new historic highs (at least for the sp'500) looks due in mid/late June
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So.. it remains a reasonably good day for the bears... although still net monthly gains for most indexes.

A daily/monthly close <sp'2100 - along with VIX 15s looks very viable today. There is ZERO reason why anyone should be bullish into the weekend.

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VIX update from Mr T. 



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time for lunch :)

11am update - market unravelling

With a set of lousy econ-data, the market is under increasing pressure. The hourly equity cycle is offering downside into the monthly close, lower trend is offering 2090/88.. today, along with VIX 16s. USD remains fractionally lower in the DXY 96.90s.


sp'60min

VIX'60min

Summary

It is turning into a rather interesting day.

*anyone notice how Q1 GDP was actually trending on Twitter? Mainstream is getting a little rattled at what are multiple recessionary data points.
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Hourly MACD equity cycle is in the process of turning negative, and should remain so into next Monday.
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notable weakness: Alcoa (AA) -1.7% @ $12.46... on its way to 10/9 by the late summer.
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Bigger picture... Transports... its getting serious.. net monthly decline -3.7%...

A hit of the low monthly bol.. around 7K this summer.. or autumn (makes little difference) would open the door to ultimate bearish outlook.
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Oil is holding sig' gains of around 2%.. and that is helping the market.. with most energy stocks higher.

Eyes to the USD... if Euro sees some weakness later today.. higher USD.. with commodities to be pressured lower.


11.21am.. a little chop around sp'2109...

USD has turned positive, +0.1%... that is starting to pressure the precious metals a little.

The anomoly... Oil, +2.6%... and climbing

10am update - opening weakness

US equities have once again opened moderately weak, as both revised Q1 GDP (-0.7%) and the Chicago PMI (46.2) are of a recessionary nature. USD remains in cooling mode, -0.1% in the DXY 96.80s. Metals are holding minor gains, Gold +$3, with Silver +0.4%. 


sp'60min

VIX'daily3

Summary

*the Chicago PMI of 46.2 is truly DIRE, and bodes badly for Q2 GDP.
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Hourly MACD (blue bar histogram) is set to turn negative by late morning... with viable downside into early Monday.

Considering the econ-data.. and the current price action.. market looks set to fall across the day. The fact VIX h as already broken into the 14s is an extra sign things are swinging back toward the bears.
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Energy prices are mixed, Nat' gas continues to slide, -2%, whilst Oil is battling to hold +1%(so far, net lower for May by -2%)
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Transports is -0.6% in the 8200s... nothing bullish there.
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Arguably.. the only thing that could wreck today would be some more talk of a Greek 'kick the can' deal.


10.01am.. consumer sent... 90s.. vs prev. 95.     May is not turning out to be so great.


10.06am.. Oh jeez.. check this out...

Clown finance TV getting upset over sp -3pts?

Who is writing those headlines?
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10.10am..  Unless the bull maniacs can get a positive Greek headline within the next 30/90mins... we'll be trading around sp'2100 by this afternoon.


10.25am.. VIX remains relatively subdued in the 13.60s.... need to see sustained 14s...

notable strength: semi-cond'   INTC +2.0%


10.31am... Market unravelling.. sp'2112...

10.45am.. sp'2109.. with VIX pushing upward... 14.15,    a daily close in the 15s looks due.

Pre-Market Brief

Good morning. Futures are largely flat (ahead of GDP data), we're set to open at sp'2120. USD is fractionally lower @ DXY 96.90s. Metals are broadly flat. Oil has early gains of 1.2%.


sp'60min

sp'monthly3c

Summary

*futures were sp -9pts at one point, but with more Greek chatter... jumped back to evens.
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Equity bears should keep in mind that even if somehow the market closes significantly lower today by 1%, most indexes would still settle May with a net gain.
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Update from Oscar



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Have a good Friday.
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...awaiting GDP and PMI data.... should give prices a kick... one way or the other.


8.30am Q1 GDP (first rev): -0.7%... not pretty.... broadly inline with market exp.

Equity reaction is muted...    the only real mover was Gold.. flipping from -$2 to +4

USD has turned fractionally positive.
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Overnight action in China was indeed crazy... opening to the low 4400s - on rising support.. but closing -0.2% in the 4600s. No doubt some will still be looking for 5K in the near term
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8.39am... sp -3pts... 2117.  Bears just need to break -0.5% lower to build enough downside momentum to cause some problems into the weekly close.

As ever, its a case of how many of the rats might want to bail ahead of the weekend.


9.34am... Relatively muted open.. sp -2pts... 2112 is the low to break...

Who wants to buy ahead of the Chicago PMI ? Hmmm

.. eyes to the VIX... looking for a break into the 14s.
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9.45am.. Chicago PMI: 46.2      vs. market exp' 53.1

Absolutely DIRE number... a RECESSIONARY number for May.. so that ain't pretty for GDP Q2

VIX breaks into the 14s...   things are starting to get moderately interesting

China maxed out at 5K ?

Whilst the US market saw a day of moderate weakness, the more dynamic action was in China, having seen a natural bearish reaction from the giant psy' level of 5K. The net daily decline of -6.5% to 4620 (intra high 4986) was certainly severe, but such pull backs are to be expected.


China, daily

China, monthly

Summary

The Thursday session for China certainly merits a mention.

Having hit a new 7yr high of 4986, the market saw an initial rejection.. a few hours of churn.. but then a sharp closing hour sell down, with a net daily decline of -6.5% @ 4620. Such severe daily declines are to be expected, with the Shanghai comp' having seen a hyper-ramp from last summer.

Has China maxed out at 5K? Short term... that could very well be the case. Indeed, with the break above 3400 the natural target has always been 5K.. rather than 4K... or 6K.

A full retrace to the key breakout level of the 3400s is viable at any point this summer. However, on the bigger time frame, new historic highs >6124 look a given - whether late this year.. or in 2016.
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As for US equities...

sp'500, monthly

A net monthly gain looks a given, even if there is sig' weakness on Friday. Considering the recent new historic high of 2134, the equity bears have nothing to tout right now. The broader trend remains intact.
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Looking ahead

Friday will see GDP (first rev), market is expecting a downward revision to -0.8% from +0.2%. It would be pitifully ironic if the market ramps on a 'better than expected' negative GDP number tomorrow.

Data also due: Chicago PMI, market expects a non-recessionary 53.1. Anything under 52 would likely spook the market, and be a renewed warning about Q2 GDP.
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Goodnight from London

Daily Index Cycle update

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'daily5

Trans

Summary

Suffice to add, despite the continuing significant weakness in the 'old leader' - Transports, the broader market is holding together very well.
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a little more later..