Saturday 30 April 2016

Weekend update - World monthly indexes

It was a very mixed month for world equity indexes, with net monthly changes ranging from +8.2% (Russia), +0.5% (USA - Dow), to -2.2% (China). Most world markets remain broadly bearish from the spring/summer 2015 highs. Outlook into the summer is for a powerful down wave of around 20%.


Lets take our monthly look at ten of the world equity markets

USA - Dow


The mighty Dow battled to 18167 - just 1% shy of the May'2015 high (18351), but cooled into the April close, settling +0.5% @ 17773.

Underlying MACD (green bar histogram) ticked higher for the second consecutive month, but remains negative. Considering current price action, a bullish cross looks unlikely in May. 

Best guess: short term downside to the 17500/200 zone.. then a bounce into mid May.. before losing the very important 17K threshold by end May. 

A break under 17K will open up a test of the Aug'2015 low of 15370. If that fails to hold, there is 'fast and furious' downside to the 14000/13800 zone, and then 12500/400s.


Germany


The economic powerhouse of the EU - Germany, saw a moderate gain of 0.7% @ 10038, having cooled from an intra month high of 10474. The monthly 10MA will be in the 10500s in early May, and it would seem the DAX will remain stuck under it, if not eventually losing the 10K threshold.

Those equity bears seeking broader world equity market weakness, should be seeking further DAX weakness to the 9400s by end May. From there, next downside target would be rising trend around 9K. Any price action in the 8500s would be highly suggestive of the 7000/6500 zone.


Japan


Like most other world markets, the Nikkei unravelled into end month, as the BoJ refrained from announcing any further increase in QE, resulting in a net decline of -0.5% @ 16666. The important 10MA will be around 17500 to begin May. There is viable downside to the 13-12K zone... which is a clear 20% lower.


China


The Chinese market continues to struggle, with a net monthly decline of -2.2%, settling @ 2938, notably under the 10MA of 3165. Renewed downside to the 2300/200s looks probable within the next few months.... regardless of any further easing from the PBOC. Things only get 'real interesting' on a monthly close under the giant psy' level of 2K. For now.. that looks difficult, as the communists leadership will fight every single point decline.


Brazil


The Bovespa climbed strongly for a third consecutive month, settling +7.7% @ 53910. Next resistance is the 56-58K zone.

Brazil remains problematic, but has clearly benefited from the recent rally in commodities. If commodities start to cool, much of the recent gains are going to be negated. Equity bears should be seeking a monthly close back under 45K. If that is achieved, there is viable downside to 30K.

Can the summer Olympics* inspire hope amongst the Brazilian populace, and indeed the world? There is the deteriorating Zika viral issue, and ongoing political turmoil, either of which would be a valid excuse for renewed equity downside this summer.

*it is notable that the Chinese Olympics of Aug'2008 - which despite being a huge (and inspiring) success were followed by a financial collapse wave.. mere weeks later.
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Russia


The Russian equity market climbed for the third consecutive month, settling +8.2% @ 949 - the best close since June 2015. There is powerful resistance around the giant psy' level of 1K. There is no doubt that a major part of the equity rally is due to the massive increase in oil prices. If Oil prices start to decline (not least if the USD strengthens back toward the DXY 100 threshold), then the Russian market will lose most, if not all of the gains into the late summer.


UK


The UK market saw a net monthly gain of 1.1%, settling @ 6241, having cooled from an intra high of 6427. The FTSE remains notably unable to re-take the monthly 10MA, which will be in the 6200s in early May. First key support is the 6K threshold. Any May close <6K would bode for a massive upset in June to the 5000/4800 zone.

The BREXIT vote will be June 23rd, and unquestionably, it will have a massive impact on the UK, and most other world markets. If the UK populace vote to leave, it would likely lead to major upset in currency markets, and then mainstream chatter would swing to which other EU states might want to vote to exit.

On the flip side, a 'stay' vote would be a valid excuse for the UK - and other world markets to rally.. at least initially.


France


The CAC saw an April gain of 1.0%, settling @ 4428, notably below the 10MA. The French market remains struggling since the spike high of 5283 in April 2015. Equity bulls need a close back above the giant psy' level of 5K to be confident again. Bears should be seeking a May close <4250, which will open up the 3500/3250 zone.


Spain


The largest and most problematic of the EU PIIGS - Spain, saw a sig' net monthly gain of 3.5% @ 9025, however that was still well below the key 10MA, which will be in the 9500s in early May. Equity bulls need to re-take the key 10K threshold this summer, but that is a clear 10% higher, and looks out of range. Bears should be seeking a weekly/monthly close <8500, which will open up a move to 6K.


Greece


The economic basket case of the EU - Greece, saw the Athex attain a gain of 1.1%, settling at 583. The Greek market remains within a strong downward trend, having recently broken a new multi-decade low of 420. Renewed downside to the 300s seems probable. Considering the Greeks will eventually have to revert back to the Drachma - which will no doubt cause huge societal/economic upset, the Athex might even trade <100 before a grand new growth cycle begins.
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Summary

So, a mixed month for most world equity markets, with some distinct cooling into end month.

The rise in oil prices has unquestionably been one of the leading variables that has helped 'inspire' a great many markets.

Despite almost all markets settling April net higher, it should be clear that most markets remain significantly below the spring/summer 2015 levels. It could easily be argued that the next wave lower will break new multi-year lows.

As ever though, the lower equities fall, the greater the likelihood that central banks will respond with increasing QE and lower/negative rates.
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Looking ahead

M - PMI/ISM manu', construction
T - -
W - ADP jobs, intl' trade, prod/costs, Factory orders, PMI/ISM serv', EIA report
T - weekly jobs
F - monthly jobs, consumer credit

*there are a great many fed officials speaking across the week. Notably, Thursday in AH, a quartet of Fed presidents will be discussing monetary policy at a conf' at Stanford.
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Back on Monday :)

Bits and pieces to wrap up April

It was a rather mixed month for US equities, with the sp'500 breaking a multi-month high of 2111, but settling +5pts (0.3%) at 2065, whilst the Nasdaq comp' settled -94pts (1.9%) @ 4775. The USD settled -1.6% @ DXY 93.03. WTIC Oil saw a powerful net monthly gain of $7.88 (20.7%) @ $45.99.


sp'monthly1b


A second monthly close above the monthly 10MA (2019). The April candle could be compared to May'2008. If you agree with that analogy, then the May'2016 candle should break under the lower monthly bollinger - currently @ 1919 - which is around 7% lower. How the market trades in the latter half of May will be critical indeed to those who are seeking the sp'1600/1500s this summer/autumn.


Nasdaq comp', monthly


A rather sig' net monthly decline, with the bull maniacs unable to re-take the giant psy' level of 5K. The April candle is relatively narrow range, with a little spike - suggestive of renewed downside in May.


USD' monthly


The third consecutive monthly decline for the King of FIAT land. Next support are the DXY 92s, and then 90. The 'dollar doomers' - of which I am NOT one, should be seeking a monthly close <90 within the next few months. USD bulls should be seeking the 90s to hold.. with renewed upside to the giant 100 threshold... and onward to the 120s.


WTIC oil, monthly2


A third consecutive net monthly gain, decisively closing above the monthly 10MA ($41s). It is highly notable that the underlying MACD (green bar histogram) cycle is now positive, for the first time since June 2014, when Oil was trading in the $107s.

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... and that will suffice for this week.. and the month.

Goodnight from London
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*the weekend post will be on the world monthly indexes

Daily Index Cycle update

US equity indexes ended the week/month on a broadly weak note, sp -10pts @ 2065 (intra low 2052). The two leaders - Trans/R2K, settled lower by -1.2% and -0.8% respectively. Near term outlook offers the sp'2030/20s, which will likely equate to VIX in the 18/19s.


sp'daily



R2K



Trans


Summary

sp'500: a second consecutive net daily decline, notably breaking below the gap zone of 2065/61. Despite a closing hour ramp, price action/structure is suggestive of lower levels next week.

R2K: a clear break of rising trend/support, having briefly broken the 200dma (1126). Next support is the 1100/1090 zone, where the 50dma is lurking.

Trans: clear break of trend.. and arguable failure of the bull flag. Next support are the 7780-7770s, where the 50/200dmas are.

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a little more later...

Friday 29 April 2016

VIX climbs into the weekend

With equities seeing a second day of broad declines, the VIX continued to climb, settling +3.1% @ 15.70. Across the week, the VIX gained a rather significant 18.8%. Near term outlook offers the sp'2040/30s.. which should equate to VIX 18s.


VIX'60min



VIX'daily3



VIX'weekly



Summary

So, we've seen the VIX swing from a Thursday low of 13.30 to a Friday afternoon high of 17.09 (with sp'2052). The closing action was one of rapid cooling in the VIX - as equities jumped around 0.7%.

Broadly though, the VIX is on the rise. It would seem the 18s are due next week...  the 19-21 zone looks 'briefly' possible if sp'2030/20s.

Sustained action above the key 20 threshold looks out of range in the current cycle, until the latter half of May.

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more later.. on the indexes

Closing Brief

US equity indexes ended the week/month on a broadly weak note, sp -10pts @ 2065 (intra low 2052). The two leaders - Trans/R2K, settled lower by -1.2% and -0.8% respectively. Near term outlook offers the sp'2030/20s, which will likely equate to VIX in the 18/19s.


sp'60min



Summary

*closing hour action: a rather strong ramp from 2054 to 2069, with some pretty choppy action into the monthly close.
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... and another week in the world's most twisted casino comes to a close.

Certainly... the bulls tried damn hard to break/hold the sp'2100 threshold.. but failed. With that failure saw increasing weakness.

The weekly/monthly close in the 2060s is interesting, but those equity bears are going to need to see some daily closes in the 2020s and lower to offer initial hope that 2111 is a key mid term high.

One thing is for sure... May won't be dull.

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*the usual bits and pieces across the evening.. to wrap up the week

3pm update - the sun sets on April

Regardless of the exact close, all US equity indexes are set for significant net weekly declines. Despite some trend/support breaks, what will be critical for the equity bears, is for the market to put in a marginally lower high (<sp'2111) in the subsequent multi-day bounce - as looks set to begin at some point next week.


sp'weekly1b



Nasdaq comp' weekly



Summary

*keep in mind, for a net monthly decline, we need sp <2059.74
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Suffice to add... an interesting week, but really... the moves are still relatively minor, and we remain very close to recent multi-month highs.

I will only have renewed confidence that we've seen a mid term high @ sp'2111, if we see a daily close in the 2020s next week. That will not be easy, as there are a great many aspects of support in the 2040/30s.
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More April showers... so I guess I should expect rainbows (and unicorns?) into the close.

yours...  ending the month on a positive note :)
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RE: TVIX.. for those curious... I'm seeking 4.75/5.25 next week...



Will hold across the weekend
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3.03pm.. for those in the mood for something different...



The communists protestors are out in force, as Trump is due to speak.

2pm update - how low next week?

US equity indexes look set for a second day of broad declines, having achieved more trend/support breaks. Next week offers at least the sp'2040s - which will equate to VIX 17/18s. There are a great many aspects of support in the 2030/20s. A break <2K looks unlikely in first half of May.


sp'daily3 - fib retraces.



sp'weekly1c - time fibs


Summary

re: daily3, the lower daily bol' is around 2035... close to the 50dma.

If sp'2020s.... if will break the two soft lows of 2039/33.. and that would give initial confidence that 2111 is a key mid term high.-
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re: weekly1c: Yes, time fibs are pretty kooky, but still.. a snap lower late May would make sense.
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Best guess?  2040/35 zone... then bouncing for at least 3-5 days to 2070/80

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notable strength: miners, GDX 4.7%.... having doubled since the Jan' low. Incredible strength.

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back at 3pm

1pm update - remaining broadly weak

Despite a secondary bounce, US equities remain broadly weak. A weekly/monthly close in the sp'2050/40s looks probable, and that will make for a net monthly decline. VIX is seeing some interesting upside, but still relatively low in the 16s. Next downside target is sp'2040 with VIX 18s.


sp'weekly1b



VIX'daily3



Summary

*at best.. VIX 19-21 'briefly' next week with sp'2030/20s... but that is a stretch.
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Little to add.

Some renewed selling into the weekend looks due, as some of the bull maniacs should be at least marginally concerned about next Monday's open.

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notable weakness... QCOM, daily


Ugly... and if the broader market implodes.. QCOM will be a $30 stock. I realise that target sounds like 'crazy talk' right now.
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back at 2pm

12pm update - sunshine for the equity bears

US equities saw a natural bounce from the sp'2065/61 gap zone, but there has already been a break into the 2050s.. with VIX pushing toward the 17s. USD remains weak, -0.8%.. set to lose the DXY 93s. Metals are powerful, Gold +$22, with Silver +1.5%.


sp'monthly



VIX'weekly


Summary

*as ever, I am trying not to get overly lost in the minor noise... so this hour.. focusing on the bigger monthly/weekly charts.

As things are.. we're set for marginal net monthly declines in a number of indexes.

Despite a sig' net weekly VIX gain.. we're still at very low levels.

Hyper VIX upside to the 30s, 40s.. or even higher, looks viable in the latter half of May. No doubt the mainstream will be seriously twitchy about the June BREXIT vote.. amongst other things.
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notable reversal.... RIG, daily


ugly candle.. ugly company... capitulation is STILL due in the energy/mining/shipping sectors... and RIG remains on my disappear list.
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Here in London city...

Bullish Horse Chestnut

Bullish April sunshine and showers.

Another very mixed spring day... sharp showers.. but then glorious sunshine. A great day for equity downside.

--
time to cook

11am update - 2050s later today?

US equity indexes remain moderately weak, but are seeing a natural bounce from the gap zone of sp'2061/65. VIX has cooled from an early high of 16.45 back into the 15s. Broadly, the market still looks headed to at least the 2040s - which will likely equate to VIX 18s.


sp'60min



VIX'60min



Summary

Not much to add.

A natural bounce.... now its a case of whether renewed weakness into the important monthly close.

The 2050s would be 'useful'.... and open up the 2040s next Mon/Tuesday.


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notable weakness... AAPL, monthly


Seen on the giant monthly cycle, AAPL is sporting a truly horrific April candle. Bearish engulfing, unable to clear the 10MA.  Target remains $70.

*related stock... QCOM.... similarly ugly.. target is $30.
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time for some sun.. or rain.... back 12pm

10am update - so many charts, not enough time

US equities open moderately weak, with the sp' breaking under rising trend/support into the 2060s. Meanwhile, there are marginal breaks of trend in the two leaders - Trans/R2K. With the USD -0.6% in the DXY 93s, the metals are making a play to break above Gold $1300 and Silver $18s.


Trans, daily



R2K, daily


Summary

*Chicago PMI: 50.4... borderline recessionary, and it should at least concern the bull maniacs that the US economy is flat lining.

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There are an absolute truck load of interesting individual movers out there right now....  I will try to highlight as many as I can.... lets start with...

DIS, daily


A poke above key resistance.. but its clearly rolling over.
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STX, daily


Earnings were lousy... the statement was blaming lacking of demand. Yeah.. global economic weakness.

.. but hey.. Buffett said earnings are [broadly] fine... so I guess STX should really be up.
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stay tuned.
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10.01am  Consumer sentiment: 89.0....     not great....

A break into the sp'2050s before the typical 11am turn would be useful... as at least it'd break another soft support zone.
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10.08am.. browsing some of the monthly charts for AAPL, DIS, NFLX, .... its a long long list.... its looks borderline horrific.

The May/June candles could be scary bearish!

Pre-Market Brief

Good morning. US equity futures are fractionally lower, sp' -1pt, we're set to open at 2074. With the USD -0.3% in the DXY 93.40s, the metals continue to climb, Gold +$6 in the $1270s, with Silver +0.5% in the upper $17s. Oil is similarly strong, +1.6% in the $46s.


sp'60min


Summary

*awaiting a quartet of data, notably Chicago PMI (9.45am)
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So.... world markets are leaning weak into month end, and most of them are still broadly bearish from spring/summer 2015.... but more on that in this weekend's post.
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As for today, regardless of the exact open, price momentum is leaning on the bearish side.. a hit of the sp'2065/61 gap zone looks due today.

All things considered, a monthly close in the sp'2050s would be a bonus, and offer the 2040s next Monday.

As noted yesterday, until I see a daily close in the sp'2020s, I will not have any confidence that the market has made a mid term high of 2111.
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early movers...

AMZN +12%, EPS, $1.07... call it $4 a year.... a PE of roughly 160/170. What a bargain huh?
EXPE +11%, moderate net profit... far more than Mr Market expected
SDRL +17%... but still only in the $5s.

GDX +1.0%... as the metals continue to climb.


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Update from Mr C.



The 'failed head test' scenario, if it plays out, offers downside to at least the sp'1600/1500s.. which would no doubt freak out the mainstream.
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Overnight action..

Japan: CLOSED, settling April @ 16666
China: -0.2% @ 2938... so much for the 3K threshold.
Germany: currently -1.3% @ 10188
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Good wishes for Friday!
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8.53am.. a minor.. but important break lower in pre-market.. sp -6pts @ 2069.

earnings (or rather, lack of) from CVX not helping...  CVX -1.5%
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Buffett 'earnings have never been better'. Is he referring to any country on this planet.. or some other part of the galaxy?
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9.21am.. With GDX +2.1% @ $24.81.. the miner ETF has now officially doubled up since the Jan'19'th low of $12.40.

Pretty incredible.. considering Gold has not even broken into the $1300s yet.
-

9.23am.. notable weakness. Seagate (STX). -5% in the $25s as earnings missed.
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9.45am.. Chicago PMI: 50.4...  WEAK WEAK WEAK... and borderline recession.

It remains a nasty market

Despite the BoJ upsetting Japan - and indeed, most EU markets, the US market only opened moderately lower. The fact the market then saw a classic opening reversal was a fierce reminder to just how nasty this market remains. Even the latter day weakness was small solace to those still resolutely holding short.


sp'weekly1b



sp'monthly1b


Summary

A net weekly decline now looks probable, not least as last week's low of sp'2077 was decisively broken under in today's closing hour.

Now its merely a case of whether the equity bears can attain a monthly close in the 2070s.. the very viable 2060s... or even the 2050s.

For a net monthly decline, equity bears need <2059.

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Special mention for Japan - Nikkei, monthly


With the Thursday decline of -3.6%, the Nikkei is now moderately net lower for April, and remains broadly weak since last summer.
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Looking ahead

Friday will see a rather important quartet of econ-data - pers' income/outlays, employment costs, consumer sent', and most important of all.. the latest Chicago PMI.

The market is seeking a non recessionary 53.4, which does seem somewhat overly optimistic. I'd not be surprised to see a number under the key 50 threshold.


*Fed official Kaplan will be talking about monetary policy in London city in the early morning.

yours truly will not be attending.

Goodnight from London

Daily Index Cycle update

US equities closed on a particularly negative note, sp -19pts @ 2075 (intra high 2099). The two leaders - Trans/R2K, settled lower by -1.5% and -1.2% respectively. Near term outlook offers the 2060s, a break under the two soft lows of 2039/33 will very difficult.


sp'daily5


Nasdaq comp'



Summary

sp'500: a day with two rather strong reversals.. from an early low of 2082 to 2099, but then rapid cooling into the close.. with an intra low of 2071

Nasdaq: a notable close below the 200dma.

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a little more later...

Thursday 28 April 2016

VIX climbs into the close

It was a very mixed day for the VIX, which saw an opening reversal/black-fail candle, with the VIX then rapidly cooling to a low of 13.30. However, with significant equity weakness into the close, the VIX rebounded, settling +10.5% @ 15.22. Near term outlook offers the sp'2060s, which will likely equate to VIX 16s.


VIX'60min



VIX'daily3



Summary

For those involved in the VIX, today was a real damn mess. Not only did the VIX see a classic opening reversal - as reflected in the equity market, but the VIX almost broke into the 12s !

As things are, the equity bulls look tired, and were clearly unwilling to buy into the sp'2100s, with the VIX strongly rebounding as equities rapidly cooled into the close.

What should remain clear, sustained action above the key VIX 20 threshold looks out of range until the latter half of May.

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more later... on the indexes