Tuesday 29 December 2015

VIX resumes cooling mode

With equity indexes closing significantly higher, the VIX was naturally back in cooling mode, settling -4.9% @ 16.08. The near term outlook offers sp'2090 by the Thursday/2015 close, and that will likely equate to VIX in the 14/13s. The 20 threshold looks out of range until at least late January.




Suffice to add, VIX looks set to remain subdued in the remaining two trading days of 2015, and probably the first 2-3 weeks of 2016.

*I have ZERO interest in being long the VIX in the near term.

more later... on the indexes

Closing Brief

US equity indexes closed significantly higher, sp +21pts @ 2078 (intra high 2081). The two leaders - Trans/R2K, settled higher by 0.7% and 1.0% respectively. Near term outlook is for a year end closing around sp'2090, with marginal new historic highs for the Dow, sp', and Nasdaq in Jan/Feb'.



A day for the equity bulls, as the broader trend (see daily/weekly charts) reasserted itself.

It clearly remains very light volume, and that almost always favours the bulls. Tomorrow and Thursday will very likely favour the bulls, but with smaller scale price action.

Best guess.. a Thursday/2015 close around sp'2090. The 2100s look due next week.

more later, on the VIX

3pm update - significant gains

US equity indexes have built sig' gains, with the sp +22pts @ 2079.. the highest level since Dec' 9th. Next resistance is around 2090.. and that will likely restrain the market until next week/year. VIX is naturally subdued, -4% in the low 16s. The 14/13s look due by the Thursday close.


USO' daily2


*oil is certainly helping the market.. as it is just below next resistance. The $40 threshold looks due for WTIC within the next week or two... and that should be enough to kick the sp'500 to 2110/20s.

Little to add...

I'm tired........... back at the close

2pm update - fractional break

The sp'500 and the Nasdaq are the first two indexes to achieve fractional breaks above the Dec' 16th FOMC high. Considering it remains holiday trading conditions, the algo-bots will have high opportunity to melt the market upward to around sp'2090 by the Thursday close.


Nasdaq comp',daily


It remains pretty quiet out there in market land. Most are understandably just waiting for the Thursday closing bell, with another 3 day holiday weekend due :)

For the moment, there remains zero reason to be shorting anything.. even Oil.

Indeed, look to the next set of oil inventory reports. Another net draw down would give Oil the excuse to push another $1 higher.. and continue the attempt to hit the $40 threshold by mid January.

Of course... NOTHING has been resolved in terms of over supply, and the same is true of the mining industry.

Capitulation is yet to occur.

Meanwhile.. DD are sending an early new year message to those in Delaware.

As even the cheerleaders on clown finance TV recognise, the merger of Dupont and Dow Chemical is going to lead to sig' job losses.

Collectively, the two companies employ around 110/120k. It is probably safe to assume high level management will wish to knock at least 15/20K off that number by late 2016.

1pm update - battling to clear the FOMC high

US equities are holding borderline significant gains, with the sp +17pts @ 2074. A break above the FOMC high of 2076 looks highly probable... whether by today's close or Wed/Thursday. The bigger issue remains on any break to new historic highs (in the headline indexes).. will the market be able to hold such gains?




*as things are, we're still net lower on the month, but by the Thursday close, we'll likely be at least a few points above the Nov' close of 2080... and a clear 30pts above the key 10MA.

That would make for the third consecutive close above the 10MA... although other world markets continue to look ugly... even the German DAX.

notable weakness...

TWTR -0.4%... now one of the most unwanted stocks. How long until Dorsey quits being p/t CEO at that train wreck?

strength: QCOM +3.1% in the $51s..  as some are no doubt looking ahead to next earnings season.. a mere 10 trading days away!

stay tuned

12pm update - naturally.. a bit stuck

The sp'500 has clearly got stuck in the 2075/80 resistance zone. However, the bigger daily/weekly cycles are bullish, and underlying price pressure should be enough to achieve a break through, whether today or tomorrow. VIX remains very subdued, -3% in the 16s.




Without getting lost in the minor noise, it should be clear that there is open air to at least 2090 in the immediate term.. and given a few weeks, the market should have a good opportunity to tag the upper bollinger in the sp'2150s or so.

notable weakness, DIS -0.5% in the $106s. Did Star Wars stop making money today? Is that the reason?

CREE -3.1%. I can't find any adverse news on that one. Will we not need lighting in 2016.?

VIX update from Mr T

time for tea

11am update - unicorns in a sunny sky

US equities continue to build gains, with the sp' breaking into the 2075/80 resistance zone. As things are.. a year end close in the 2080-90 zone looks probable... along with VIX 14/13s. Oil is certainly helping the market mood, holding sig' gains of 2.7% in the $37s.




So.. we've tested the FOMC high of 2076... and now its a case of whether we close a little above... or below it.

Considering the bigger daily/weekly cycles, a Thursday close >2076 looks very likely. That would be a great relief to the mainstream who are clearly desperate to see at least a few indexes close net higher on the year.

Meanwhile.. here in London city

A pretty good late afternoon... and remaining mild.

time for an early lunch

10am update - pushing for the FOMC high

US equities open broadly higher, with the sp'500 making a serious push to break above the FOMC high of 2076. A daily close in the 2080s would bode very bullish for the first half of January. Metals are holding minor gains, Gold +$2. Oil is strongly rebounding, +2.5% in the $37s... first target remains the $40 threshold.




The opening gains clearly negate yesterday's baby bull flag, and hopes of 2042/36 can be dropped.

Right now, there seems little point in considering any shorts until market is brushing against the monthly upper bollinger.. currently in the 2150s.

New historic highs look due in the 'headline indexes' - Dow, sp', Nasdaq,  whilst Trans/R2K are a long way from achieving that.

*Watching clown finance TV, its rather amusing to see how super bullish they are today. Yesterday they were in a particularly dowdy mood on fears of a net yearly decline.

time for some sun... back soon

Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +11pts, we're set to open at 2067. USD is a little higher, +0.2% in the DXY 98.10s. Metals are bouncing, Gold +$4. Oil is +1.2% in the $37s.



As thing are, the opening gains are going to fully negate the baby bear flag.

It would seem the window to see further weakness to sp'2042/36 has shut.

Instead we're headed straight to 2080/90 for the Thursday/year end close.

Overnight Asia action...

Japan: +0.6% in the 18900s
China: +0.8% @ 3563

Have a good Tuesday

8.40am  sp +15pts... 2071... and putting beyond any doubt now.

Next up... the FOMC high of 2076... and that is clearly in range this morning.  So.. a daily close in the 2080s is just about possible.

Submit your outlook for 2016

US equities look set to close the year very mixed, with the sp'500 fractionally higher, but the 'old leader' - Transports, is currently net lower by a very bearish -18%. Yet.. what about 2016? It is time to submit YOUR outlook for 2016.

sp'monthly6 - key scenarios for 2016


It remains the case that the equity bulls should be desperate to attain another monthly close above the monthly 10MA. Any close in the 2040s or lower, would be a real problem, and be highly suggestive the Aug' low will be tested within a few months.

As things are, I'm still guessing we'll manage sp'2080/90 for the Thursday/2015 close.

re: Scenario. I'm very biased toward C. It'd be great to see some serious market volatility in 2016 with a major washout to sp'1600/1550.

Current price action in the US - and many other world markets argues strongly against A.

.. and the central banks won't allow D, right?

Scenario B would be the rather boring outcome, maybe we'll see that?

Looking ahead

Tuesday will see Case-Schiller HPI and consumer confidence.

Your target/outlook for 2016

With just three trading days left of 2015..  I'm now open to taking your predictions for 2016.

Two aspects to submit (latter is optional)

Primary -  2016 year end target for the sp'500. Submit a specific number, rather than a range.

Secondary - anything else you want to note, whether another US/world index, a commodity, individual stock, or even an economic trend. No more than a paragraph or two. Brief notes only please!

How to submit...

The best way to submit a target (and any related notes)... is via the DISQUS comments system. If you don't yet have a DISQUS account... go get one. See HERE

You are free to email me (see CONTACT page - left column) but if you do... please let me know what 'display name' I should use, to go with your target/notes, for publishing.


1. Prize? The only prize is that of being more right than anyone else, not least yours truly!

2. I will publicly post your sp'500 target, along with your DISQUS name, Twitter handle, the website that you represent, OR any other name of your choice.

3. You are welcome to adjust/re-submit an entry up to midnight (UK) Jan'3rd 2016.

4. I aim to post the full list of entries the weekend of Jan 2/3 2016.

What is my target for end 2016?

I've not settled on a number yet, but it'll likely be dependent on whether US/world equity markets settle above.. or below their respective monthly 10MAs.

In addition to a post on the 2016 predictions, I will post a full review of the 2015 predictions, this coming weekend.

Goodnight from London

Daily Index Cycle update

US equities closed moderately weak, sp -4pts @ 2056 (intra low 2044). The two leaders - Trans/R2K, settled lower by -0.7% and -0.6% respectively. Near term outlook offers the 2042/36 zone, before making a push to 2080/90 for the Thursday/year end close.




*It is notable that the 'old leader' - Trans, is almost a full 700pts (around 9%) below its 200dma. It sure doesn't look likely that we'll see sustained action >8300 any time soon.

Equity bulls should be mindful that the old leader remains very weak, and that is with consistently lower energy/fuel prices. 

From a pure cyclical perspective, the underlying MACD (blue bar histogram) cycle is still on the low side, and renewed upside into year end/early 2016 looks due.

The ultimate issue is whether the market can break new historic highs (at least in some indexes), and whether it can hold such levels.. or completely unravels. Current price action is increasingly suggestive that the US (and other world) equity markets are facing a major problem in 2016.

Update from Riley

a little more later....  with a request to YOU !