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.




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.



*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.

3pm update - nano chop into the close

US equities look set for continued nano-scale price chop into the holiday close. It remains notable that Oil has recovered all of the earlier sig' declines (-2.5%), and is trading a touch higher around the $42/43 threshold. Metals are mixed, Gold -$5, whilst Silver +0.2%.




... the last hour of a naturally quiet day.

back at the close

2pm update - rising support

As of the Friday open, equity bulls should be at least holding the sp'2085/80 zone. Broadly price pressure remains bullish, and the 2100s remain due. USD has cooled from earlier highs, now just +0.2% in the DXY 99.70s. Oil has recovered to -0.5%. Gold remains weak, -$4 @ $1070.



The nano chop continues.

A touch of weakness early Friday is viable....  but that in itself will merely offer another level to buy at.

A curious stock remains...

BAC, daily2

I've still yet to pick up BAC, having watched for the entire year. Key threshold remains $18. A monthly close above that.. and its a straight run into the 21/23 zone by summer 2016.

Hmm, what do you think?

1pm update - Oil continuing to recover

Whilst US equity indexes remain in nano chop mode, there continues to be a very notable recovery from opening lows in Oil.. currently -0.5%. Even a close at current levels would bode strongly bullish for Friday.. and into early December.



Current daily candle is a hollow-red candle... a clear reversal.

Underlying MACD (blue bar histogram) cycle is set to see a bullish cross this Friday... and Oil prices look set to at least test the 50dma.. in the WTIC $45s.

.. and that bodes well for the related energy stocks.

APC, daily

Frankly.. the $57s look like a super strong floor... the $70s are not a bold target by mid/late January. Clearly though, Oil has to hold $40.... and preferably.. make another push into the upper 40s.

VIX update from a somewhat late... Mr T.

back at 2pm :)

12pm update - naturally flat lining

US equity indexes have naturally started to flat line as anyone at least semi-human will not want to get involved ahead of the Thanksgiving break. USD has cooled a little from the giant DXY 100 threshold, +0.3% in the 99.80s. Metals remain a little weak, Gold -$3. Oil is -1.1%, but well above the earlier lows.


GLD, daily


*Gold, Silver, Copper, all remain broadly weak, and look set to break new lows.. and that will of course not help the related mining stocks... no matter how strong the broader market might be into year end.

So far today, the sp'500 trading range is 6.53pts... barely 0.3%... and it would seem the 2100s won't be hit until after the holiday.. or even more viable... early next week.

notable weakness..

Airlines, DAL/UAL, both -1.3%

Oil/gas drillers, RIG -1.3%, SDRL -3.9%...  but they still look vulnerable to upside in the near term.. along with Oil.

Meanwhile.. in London city...

About as good as could be expected for late November.

time to see what the cheerleaders on clown finance TV are trying to pump...

11am update - minor chop

US equity indexes are in minor chop mode... leaning on the bullish side, sp +1pt @ 2090, with a subdued VIX, -3.5% in the 15.30s. Oil is recovering from earlier lows, -0.9%.. with a clear reversal candle.. suggestive of upside to at least the $45s by early next week.


USO' daily2


*the reversal candle in Oil is pretty strong right now... any positive close would bode for sig' upside across the next few days.

Suffice to add.... its time for an early lunch :)

back soon.

10am update - subdued open

US equities open subdued, but then.. a holiday break looms. A daily close in the sp'2100s remains very viable... having seen a higher low of 2070. With the USD +0.5% in the DXY 100.00s, Oil is -2.4% in the $41s, ahead of the EIA report. Metals are weak, Gold -$6, with Silver -0.6%


USO, daily2


Santa @ the NYSE... Dr Evil @ Nasdaq ?

Equity bulls need to see the market react at least moderately favourable to the latest EIA oil report.. due at 10.30am.

Some algo-bot melt is possible today.. but.. in theory.. it won't likely be much.. as price action will likely get increasingly subdued. I guess that will offer me opportunity to highlight all sorts of things this afternoon.

PMI service sector: 56.5... nothing bad there.

New home sales.. 495k... a touch under expectations.. but better than the previous 468k.

Consumer sentiment: 91.3... a little weak.  Do we blame the weather for that?

.. back at 10.30am.. for the Oil report.

10.31am..  961k oil inventory surplus...  not horrific, but then... neither is it a negative number.

Consider the current daily cycle... I'd guess Oil will still manage to hold $40 in the near term... and proceed at least to $45.

.. as things are.. Oil is -1.5%.... battling to turn positive by the close.

Pre-Market Brief

Good morning. US equity futures are fractionally higher, sp +2pts, we're set to open at 2091. USD is on the rise, +0.4% in the DXY 99.90s. Metals are under pressure, Gold -$2. Oil is -1.8% in the $42s.. ahead of the EIA report.


WTIC Oil, daily


The sp'2070 low should comfortably hold.. and a break into the 2100s is clearly viable today.

In theory.. we should at least push to the 2110/20s next week/early December.

I realise some are looking for weakness into the FOMC of Dec'16th, but I'm highly suspicious the market might make a straight run for the 2150/70 zone.

re: Oil. Cyclically.. due to rally into next week. So.. even if today's Oil report shows another build... the price might well rally regardless. First target are the $45s.

Update from Mr C

The issue on stops and GTC orders... its very important, and I'll get around to covering it soon. There are a great many implications that most haven't been considered.

Doomer chat, Hunter with Mannarino

As ever.. make of that.. what you will.

Overnight Asia action

Japan: moderately weak, -0.4%.. still close to re-taking 20K
China: strength into the close... +0.9% @ 3647.

Have a good Wednesday

8.31am.. Jobless 260k....

Durable goods orders, +3.0%.. much better than expected, with positive revisions.

Pers' income/outlays... inline.

equities pushing upward, sp +3pts... 2092... the 2100s look due today.

Metals weakening... Gold -$5 to $1069... the low to break is 1062. Higher rates bodes bearish for the metals... the giant psy' level of $1000 looms.

Holiday week gains

It would seem the market found an excuse for a pre-holiday washout, achieving a higher low of sp'2070. Now it is merely a case of whether we'll see net weekly gains (>2089). Equity bears look very weak, and there is now threat of a straight up run to the 2150/70 zone by the next FOMC of Dec'16th.



A net weekly gain looks increasingly likely.. and indeed, we look on track to settle this week in the sp'2100s.. with new historic highs now seemingly due by mid December.

Looking ahead

There is a truck load of econ-data due...

Durable goods orders, weekly jobs (a day early)
Personal income/outlays, house price index
PMI service sector, new home sales
Consumer sent'
EIA oil report, Nat' gas report

Since Thursday is closed, price action in the latter half of tomorrow will likely be extremely muted.. as many traders will be not want to get involved ahead of the holiday.

So.. once we get the data out of the way.. by 11am.. indexes will likely flat line.

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed, sp +2pts @ 2089 (intra low 2070). The two leaders - Trans/R2K, settled -0.6% and +0.7% respectively. Near term outlook is for renewed upside into the 2100s... and to new historic highs >2134.




*airlines were under distinct pressure.. partly due to geo-political issues, but also arguably due to higher oil prices.

As for the sp'500, the 2100s look due within the next 1-3 trading days. The only issue is whether the November monthly close is a little above... or below the sp'2100 threshold.

Right now.. the underlying pressure is unquestionably toward the upside.

a little more later..