Thursday, 31 March 2016

The important monthly close

As things are, even if the equity bears manage a sig' net Thursday decline of 20/25pts (which even to me, is being overly bearish), US equity indexes are set for powerful net monthly gains. Somewhat concerning, will be a very probable close above the 10MA.



With a Wednesday close of sp'2063, we're a clear 44pts (2.2%) above the 10MA of 2019.

A Thursday/March close under the 10Ma looks out of range, not least relative to ongoing price action. At best.. a March close in the 2040/35 zone, but even that looks a stretch.

Implications of a close above 10MA?

Well, it sure ain't good for those seeking much lower levels into the summer.

Things are extremely borderline, not least as the most recent 'marginally lower high' is from Dec'2015 @ 2081. Any price action above that level, and it would open the door to new historic highs into the summer.

Indeed, it is highly arguble that for those currently holding short, the white flag waving zone is sp'2080/85. It would seem largely pointless to hold into the 2090s.. as the market would likely just keep on pushing upward.

A brief update on:  WTIC oil, weekly'2

Today was interesting in that we saw a net build of 2.3 million barrels be considered by the market as a relief, yet early gains of almost 3% was fully reversed, with a net daily decline of around -0.4%.

The $40 threshold is clear resistance, and right now, I think we have a mid term high of $42.49.

Looking ahead

Thursday will have the usual weekly jobs. More important, is the latest Chicago PMI number. Market is expecting around 50. The econ-bears should be seeking anything under the recessionary threshold of 50. The 48s or lower would be.. useful.

*Fed official Evans is on the loose again, with the more threatening Dudley due in AH.

Goodnight from London