Awaiting the monthly close

US equities closed significantly higher for a second consecutive day, sp +34pts @ 2070 (intra high 2073). The two leaders - Trans/R2K, both settled higher by 2.2%. VIX settled lower by -11.2% @ 16.64. Near term outlook offers renewed cooling into end month to the 2050/40s.. with <2K next week.


sp'daily5

VIX'daily3

Summary

So, a second day for the equity bull maniacs, many of whom are now touting new historic highs - much as they were last Thursday afternoon.

A bounce was expected, although even I was surprised to see the 2060s this morning.. and the 2070s this afternoon. It was pretty incredible to see the VIX 16s... a full 10pts lower than Monday.

Is everything fine now? Was the BREXIT vote just overblown out of proportion?

No. Hell no.

Other EU states are going to vote to leave. The EU is going to fragment. Perhaps there will remain a core in 4-5 years, but there is no doubt Spain and many others are going to want to leave.


--
June set to conclude

sp'monthly1b

As things are, we look set for a net monthly decline (<2096), but it does look likely that the bull maniacs will manage a fourth consecutive close above the key 10MA.

A June close in the 2050/40s won't give any clarity to either bulls or bears. Even if there is renewed downside in the first half of July to sp'1980/20s, then it will again be a case of whether the July close is under 2K.

Goodnight from London

Its just a bounce

US equity indexes closed significantly higher, sp +35pts @ 2036. The two leaders - Trans/R2K, settled higher by 2.2% and 1.6% respectively. VIX settled lower by a rather severe -21.4% @ 18.75. Near term outlook offers the sp'2040/50 zone - with VIX 17s, before another strong reversal lower.


sp'daily5

VIX'daily3

Summary

So... yesterday saw a double floor of sp'1991, confirmed with today's net gains. Considering the decline from 2113-1991 took only two days, the bounce should (in theory) be no more than that.

Yesterday's VIX decline remains notable, relative to the very significant equity declines. It would seem, even if renewed downside to the sp'1950s.. VIX will max out no higher than 28/32.


The monthly close

With just two trading days left of June, my attention is increasingly on how equities, and many other asset classes will settle the month...

sp'monthly1b

As ever, I think the equity bears should be seeking a close under the key 10MA - which currently sits as 2025. Clearly, that is well within range. A Thursday/June settlement under the giant psy' level of 2K would be a real bonus, considering we closed last Thursday at 2113.

As for tomorrow, the bounce should have exhausted itself, and we should close at least marginally lower. It will be interesting to see how many of the bull maniacs decide to sell into month end, and ahead of the July 4th holiday break.

Goodnight from London

Bearish start to the week

US equities closed very significantly lower, sp -36pts @ 2000 (intra low 1991). The two leaders - Trans/R2K, settled lower by -3.1% and -3.3% respectively. VIX settled lower by a notably 'odd' -7.4% @ 23.85. Near term outlook threatens the sp'2030/40s - with VIX 21/19, before 1950/25... with VIX 28/32.


sp'daily5

VIX'daily3

Summary

Last week's set of weekly candles were absolutely clear.... bearish engulfing... spiky tops.... offering downside of 3-4% this week.

This morning's declines took out an array of key supports, 2025, the 200dma, and the giant psy' level of 2K. Further downside to the 1950/25 zone remains valid by the weekend.

Most notable today, despite sp'1991, the VIX never reflected the equity weakness... opening a touch lower... and only hitting 26.39. It would seem if sp'1950/25... VIX 28/32.  The 40s look well out of range in the near term.


--
Update on the bigger cycles...

sp'weekly1b

Note the lower bollinger band @ 1950, and that is a very valid target for this week.

sp'monthly3c

Note the red 'elder impulse' candle', the first red one we've had since February. The lower bollinger is offering the 1920s in the near term. From a grander multi-decade perspective, the deflationary doomer bears need a monthly close <1500 to have any justification for calling for sp'400 or Dow 5K - as I'm seeing touted again.

First things first. Lets see how the central banks react to sp'1700/1600s within the next 1-3 months.

Goodnight from London

Weekend update - US weekly indexes

With capital markets shocked by the BREXIT, US equity indexes saw net weekly declines, ranging from -3.6% (Transports), -1.6% (sp'500, Dow, NYSE comp'), to -1.5% (R2K). The bull maniacs have seen yet another failure to break up and away. Near term outlook offers downside to the 1950/25 zone, and eventually the 1600s.


Lets take our regular look at six of main US indexes

sp'500

The sp'500 closed Thursday at 2113, a mere 1.1% from the May 2015 high. Yet the BREXIT outcome resulted in a very significant Friday gap lower, with the sp' seeing a net weekly decline of -33pts (1.6%) at 2037.

Underlying MACD (blue bar histogram) ticked lower for a third consecutive week, and is set to turn negative - with a bearish cross, at next Monday's open.

Best guess: A break of the critical low of 2025, spiralling lower to the 1950/25 zone, before the July 4th holiday weekend.

The Feb' low of 1810 will be tough to break, but the giant monthly cycles are offering the 1600/1500s by the early  autumn.
--


Nasdaq comp

The tech' saw a third weekly decline, -1.9% in the low 4700s. Next support is around 4500, which is a clear 4% lower. The 4100s are possible, but that is over 10% lower, and would equate to sp'1850/00.


Dow

The mighty Dow settled -274pts (1.6%) @ 17400. With the strong Friday decline, the Dow saw a bearish MACD cross. First soft target is the 17K threshold, and then 16600/500s. The Aug' 2015 low of 15370 is going to be tough to hit in the current down wave.


NYSE comp'

The master index settled -1.6% in the 10100s. The weekly candle has a very notable spiky top, and is highly suggestive the 10K threshold will be broken into end June. From there, first downside are the 9600/500s, with a grander target of 8K, which is a clear 20% lower.. equiv' to sp'1600s.


R2K

The second market leader - R2K, has followed other indexes, and broken rising trend, settling -1.5% @ 1127. At the current rate of decline, there will be a weekly MACD bearish cross in six trading days - July 5th. Next soft support is the May low of 1085.. almost 4% lower. From there, the 1050/40 zone in first half of July. The giant monthly cycles are offering mid term capitulation in the 800s.


Trans

The 'old leader' - Trans, continues to lead, swinging from 7757, to settle -3.5% in the 7300s. With a severe Friday decline of -4.6%, the weekly MACD cycle has turned negative. A break of 7K looks due, and that will offer a test of the Jan' low of 6403 in July/August. Grander downside is the 5500/5000 zone.
--


Summary

A very bearish weekly close for all US equity indexes.

The weekly candles are of the bearish engulfing type, all have spiky tops, which is highly indicative of another failure by the equity bull maniacs to break decisively upward.

Further powerful downside looks highly probable next week, on the order of 3-4%.


--
Looking ahead

Another busy week is ahead, not least as the market will still be reeling from the UK vote.

M - intl' trade, PMI serv'
T - GDP (second rev'), corp' profits, case-Schiller HPI, consumer con', Richmond fed
W - pers' income/outlays, pending home sales, EIA report

*Yellen, Carney (BoE), Draghi (ECB), and Tombini (BoB), are having a little central banker get together in Portugal, and that will likely get considerable TV coverage in the morning.

T - weekly jobs, Chicago PMI

*Bullard is appearing in London around 2pm, at a dinner function of the society for business economists.

Thursday is June 30th, and there will be some end month/quarter trading issues. Vol' will likely be higher, and price action will tend to be more dynamic.


F - PMI/ISM manu', construction

The following Monday will be July 4th, when the US market will be closed. Friday trading will tend to be somewhat lighter.. and that will likely favour the equity bulls.
--


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Have a good weekend
--

*the next post on this page will be Monday @ 7pm.

Capital markets in shock

US equity indexes closed severely lower, sp -76pts at 2037 (intra low 2032). The two leaders - Trans/R2K, settled lower by -4.6% and -3.8% respectively. VIX settled higher by an extremely powerful 49.3% @ 25.76. Near term outlook threatens a major Monday gap lower under 2025, to the 1950/25 zone, before the July 4th three day holiday break.


sp'daily5

VIX'daily3

Summary

The Thursday close teased the bull maniacs with a viable gap to new historic highs on a 'remain' vote... but no, instead the UK populace voted to leave the EU.

The BREXIT has resulted in a massive reversal, with the market swinging from sp'2113 to 2032. The key low of 2025 looks set to be broken under next week.

VIX is showing some hyper upside power, although in the scheme of things, the 25s are still relatively low, 30s look a comfortable upside target next week.

--
sp'weekly1b

The weekly candle is important to reflect upon, as we have a massive spiky top, highly indicative of an epic failure to break up and away.

Underlying MACD (blue bar histogram) cycle is set for a bearish cross at the Monday open, and by default.. that is suggestive of more powerful downside next week. The lower bollinger band will be in the 1920/30s next week... and is a very valid target.

Regardless of next Monday's open... we're seemingly headed to the 1950/25 zone.... real soon.

Goodnight from London
-

*the weekend update will appear Sat' @ 12pm EST, and will fully detail the US weekly indexes

and the winner is...

US equity indexes closed significantly higher, sp +27pts @ 2113. The two leaders - Trans/R2K, settled higher by 0.9% and 2.0% respectively. VIX cooled by a very significant -18.5% @ 17.25. Near term outlook is 100% uncertain... and will be entirely dependent upon the outcome of the UK vote.


sp'daily5

VIX'daily3

Summary

A pretty strange, but not entirely surprising day in market land.

US/world capital markets are almost entirely of the belief that a 'remain' vote will be tonights outcome. Indeed, the market - having rallied from 2050 to 2113 (3.1%) has arguably priced in the good outcome.

Were the UK populace to have voted to leave... then the world financial markets have a serious mis-pricing issue to deal with overnight.. and into the weekend.

re: VIX. on any basis, volatility is now back to overly low levels, not least as besides the UK vote, there are numerous other issues.
--


As for the winner

As of writing, the polls are still open (yeah, I draft my posts hours in advance), and I've absolutely no idea how the UK populace will have voted.

Many in the mainstream believe that remain will win... others... hold the view that the leave camp are much stronger than generally thought.

Times up

All I know is that at 10pm tonight.. as 'big ben' sounds in the Elizabeth tower - besides the Houses of Parliament... it'll be a chilling sound. One way or another, tonight's vote has massive implications for the UK... and the broader EU.

If I had to guess, I'd say 'remain' will win... and as I said yesterday, I kinda came to like Root beer.

Goodnight from London
--

*I'm not sure if I'll update/add to this post overnight. In any case... feel free to say hello via Disqus/email, and I'll be lurking at my other usual online 'haunts' too.

Just like the European Union

US equity indexes closed moderately weak, sp -3pts @ 2085 (intra high 2099). The two leaders - Trans/R2K, settled lower by -0.6% and -0.4% respectively. VIX settled higher by a rather powerful 14.6% @ 21.17. Near term outlook is for moderate weak chop ahead of the Friday vote outcome.


sp'daily5

VIX'daily3

Summary

A day of moderate swings in the equity market, with the sp'500 remaining unable to break and hold above the 2100 threshold.

VIX was especially notable, as despite equities only settling a little lower, the VIX built rather powerful gains into the close... decisively back above the key 20 threshold. The bigger weekly cycle is offering the 28-32 zone on a 'leave' vote.


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Awaiting the vote count

I would hope some of you will see the relevance of the following...





I've only ever lived in the EU... so I can't say from personal experience if what lays outside is really any better. From what I see though, South America is a perpetually failing hive of corruption and semi-communism. The great continent of Africa remains a mess, still reeling from the effects of numerous empires that rampaged, ransacked, and tried to convert hundreds of different groups. Asia looks a somewhat interesting place to be... even in the unsustainable economic bubble that is communist China. 

I have always thought, and called myself a European. Most of the time, that merely resulted in me being seen as even more of an oddity by those around me. Hell, I even supported the notion of a single currency.. although (hopefully most of you realise).. for many reasons, the Eurozone (as it currently operates) is mathematically doomed.

I sure can't say who will 'win' the vote tomorrow. What I can say... I did kinda get to like Root beer.

Goodnight from London

Is a remain vote priced in?

US equity indexes closed moderately mixed, sp +5pts @ 2088. The two leaders - Trans/R2K, both settled lower by -0.3%. VIX settled +0.6% @ 18.48. Near term outlook offers a push to the gap zone of 2109/15. Clearly, what happens on Friday/Monday, will be greatly dependent upon the voting maniacs in the UK.


sp'daily5

VIX'daily3

Summary

A second consecutive net daily gain, the best run in a few weeks.

It is VERY notable that the daily bollinger bands are becoming super tight.. currently 2121-2063.

A big move is coming, as many others have noted in the past few weeks.

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The bigger weekly cycle...  sp'weekly1b

It remains the case that underlying price momentum continues to swing back toward the equity bears. In theory, unless there is a dramatic move to new historic highs (>2134) in the near term, the market is headed strongly lower, with first target of the lower bollinger band - currently @ 1916.. and rising.
--


Is a 'remain' outcome priced in?

I do keep an eye on the cheerleaders of clown finance TV, and as I didn't have them on mute this lunch time, I did notice Josh Brown suggest that a 'remain' vote has arguably been priced into the market. Mr B added that the market wouldn't see a '500pt Dow' move on a 'remain' outcome.

Its an interesting consideration. Certainly, most could agree the market is NOT pricing in a 'leave' vote, as we trade a mere 2% from historic highs.

Might we see the market roll lower on a remain vote? After all.. there is a laundry list of economic reasons why the market will be vulnerable this summer and into the autumn. Technically speaking, the market is vulnerable until it breaks an actual new historic high.. having been stuck for over a year.

Frankly, I will be glad for the market to move onto other issues... once the UK vote count has been announced.

Goodnight from London

Pre-vote bullish hysteria

US equity indexes closed broadly higher, sp +12pts @ 2083 (intra high 2100). The two leaders - Trans/R2K, both settled higher by 1.1%. VIX settled -5.4% @ 18.37 (intra low 16.59). Near term outlook threatens Tuesday morning upside - as Yellen is due before the US Senate, before some pre-vote cooling.


sp'daily5

VIX'daily3

Summary

So, Mr Market managed to run the sp'2085 short-stops, and teased the bull maniacs with a morning high at the 2100 threshold.

However, there was some distinct cooling into the close, and that made for some rather spiky daily candles.

Yellen is due tomorrow morning, which threatens another push higher, but considering the daily spiky candles... a push (if briefly) above 2100 will be difficult.


--
BREXIT chatter from Mr Long with Mish




--
How will the UK vote?

I don't know. No one knows. Anyone who says with confidence they know how the vote will go is either lying... or just deluded. What can be said though, the vote will likely be very close.

I can only imagine the frustration in one of the political camps, if the final vote is no more than 2-3% split.

My guess right now? Based on a number of factors, I'm leaning on a 'remain' vote. The example of the failed 2014 Scottish vote for independence, is testament that a majority of the UK populace broadly lean conservative.

If instead the UK vote to leave... then markets are currently grossly mispriced. We shall soon find out... almost certainly before the Friday close.

Goodnight from London

Weekend update - US weekly indexes

It was a broadly bearish week for US equity indexes, with net weekly declines ranging from -2.2% (Transports), -1.2% (sp'500), to -0.9% (NYSE comp'). Near term outlook offers weakness of at least 3-4%, possibly double that.. if the UK decide to break away from the EU.


Lets take our regular look at six of the main US indexes

sp'500

A net weekly decline of -24pts (1.2%), with an intra low of 2050, and settling @ 2071. Underlying MACD (blue bar histogram) cycle ticked lower for a second week. At the current of decline, a bearish cross is due before end month.

There are a truckload of aspects of support from the 2030s to the psy' level of 2K. The April low of 2025 is arguably the most important. Any daily close <2025, will open the fire exit door to a swift move to the 1950/00 zone.

Best guess: A test of the sp'2025 low looks due within the next 3-6 trading days. If the UK vote to leave the EU - which appears increasingly probable, then world capital markets will be rocked.

However, it should be clear.. if the UK vote to remain, and the market does not break under 2025 before end June, it would bode for a massive bullish breakout, with new historic highs (in the leading indexes) no later than end July.

Considering the price structure of other world equity markets, the economic fundamentals, and the fact that low rates/NIRP is destroying the financial sector (dare I cite Deutsche Bank?), I remain leaning bearish.
--


Nasdaq comp'

The tech declined by -1.9%, settling quad-opex at the 4800 threshold. The giant psy' level of 5K remains massive resistance. Underlying MACD cycle is set to turn negative before end month. First downside is the 4500/400 zone. A break under the Feb' low of 4209 looks viable in July.


Dow

The mighty Dow settled the week -1.1% @ 17675. 18K remains core resistance. First support is 17k. If that fails to hold in the near term... next support will be 16500/400. The Aug' 2015 low of 15370 will be a key target if June ends on a bearish note.


NYSE comp'

The master index settled -0.9% @ 10347, still a clear 3% above the psy level of 10K. If 10K fails to hold, next support is around 9500... 8% below current levels, and that would equate to around sp'1920


R2K

The second market leader - R2K, settled -1.6% @ 1144. The R2K is holding rising trend. However, if lost, first support will be the 1100/1085 zone. Underlying MACD cycle has a clear divergent lower cycle high. At the current rate of decline, there will be a bearish cross in around 3 weeks. The Feb' low of 943 is a long way down... and looks out of range until Aug/Sept'.


Trans

The 'old leader', is leading the way lower, settling -2.2% @ 7589. Key resistance remains around 8K. Underlying MACD cycle ticked lower for an eighth consecutive week, with the tranny set to see a bearish cross at next Monday's open. First key downside target is the Jan' low of 6403, and that is a very significant 15% to the downside.
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Summary

A broadly bearish week for US equities.

It is notable there is a clear divergent lower MACD cycle high - as had been expected, with all US indexes set for a bearish cross on the bigger weekly cycles within 1-3 weeks. By definition, that is suggestive of a near term VERY significant drop.. on the order of Aug'2015, or Jan'2016.

As many recognise, a very big move is coming. Either bulls are going to hold things together.. and push higher into July, or the bears are going to break back into the sp'1900s.

With 9 trading days left of June, the monthly close will likely determine how we broadly trade for the rest of the year.
--


Looking ahead

An exceptionally important week is ahead

M - -
T - Yellen - testimony to the US Senate
W - EIA report, existing home sales, Yellen - testimony to the US congress
T - weekly jobs, PMI manu', leading indicators, New home sales

**The UK referendum to remain... or leave the EU**

The polls close Thursday @ 10pm BST (5pm EST). The result will likely become clear during the Friday US trading session, but quite possibly AFTER the EU/UK markets close on Friday at 4.30pm BST (11.30am EST)

F - Durable Goods Orders, consumer sent'.
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Have a good weekend
--

*The next post on this page will be Monday @ 7pm EST

A second week for the bears

US equities ended the week moderately mixed, sp -6pts @ 2071 (intra low 2062). The two leaders - Trans/R2K, settled +0.6% and -0.3% respectively. VIX settled +0.2% @ 19.41. Near term outlook offers initial Monday upside to around 2090, but then a test of the critical 2025 low at some point next week.


sp'daily5

VIX'daily3

Summary

Friday saw weakness across the day, but it was nothing of significance.. as reflected in the VIX that closed just fractionally higher.

A move to around sp'2090 is viable next Monday, and that would likely see the VIX cool to the 18/17s.

However, with the BREXIT vote ahead, equities are likely to see broad and increasing downward pressure, with VIX set for the 25/30 zone, viable before the polls close on Thursday (5pm EST).

--

Market chatter from the Schiff




--
sp'weekly1b

A second consecutive net weekly decline, with a lower high.. and a lower low. A notable quad-opex settlement under the key 10MA (2075). Next key support on the bigger weekly cycle is the 50ma (2024). Any daily close in the 2010s or lower, will offer a fast decline to the lower bollinger band.. which will be around 1920/00 into early July.

Goodnight from London
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*the weekend post will appear Sat' 12pm EST, and will detail the US weekly indexes

A mixed day in equity land

US equity indexes closed moderately mixed, sp +6pts @ 2077 (intra low 2050). The two leaders - Trans/R2K, settled lower by -0.3% and -0.1% respectively. VIX cooled -3.8% @ 19.37. Near term outlook offers the sp'2090s for quad-opex, before renewed downside to test the critical 2025 low within 3-6 trading days. If 2025 fails to hold, - as seems probable, then 1950/20.


sp'daily5

VIX'daily3

Summary

So.. a net daily gain for the sp'500.. but broadly, price action remains pretty bearish.

Even quad-opex upside to the 2090s won't negate the fact that we've seen a lower low.. and lower high this week.. as fully confirmed in a VIX that has broken into the 20s.

Price action back above the sp'2100 threshold looks highly unlikely.. as the bigger weekly cycles will soon see a bearish cross.


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USD ahead of BREXIT

USD, weekly

Without question, the looming BREXIT vote will be a key variable that will shape the rest of the summer... and for those in the UK/EU... years. A break above the DXY 100 threshold remains due, and that will have massive implications for just about everything.

Goodnight from London

Another day for the bears

US equity indexes closed moderately mixed, sp -3pts @ 2071 (intra high 2085). The two leaders - Trans/R2K, both settled higher by 0.1%. VIX cooled by -1.8% @ 20.14 (intra low 18.63). Near term outlook offers further bounce upside to the sp'2090/2100 zone, before renewed downside.


sp'daily5

VIX'daily3

Summary

A fifth consecutive net daily decline for the sp'500... the most bearish run since February.

Despite some late day weakness... further upside to the sp'2090s.. perhaps even the 2100 threshold looks viable into the quad-opex weekly close, before things get real interesting next week.

*I checked the weather forecast for next Thursday - the UK election day. Its currently set to be warm and sunny... and by definition, that does favour a higher turnout. Some could argue that favours a greater number of conservative 'remain' voters will make the effort to vote. However, underlying sentiment continues to lean toward a 'LEAVE' vote.

--
An update on the bigger picture...

sp'weekly1b

We have a rather secure mid term cycle high of sp'2120. Equity bears can re-short with a very tight short-stop. The risk/reward into next week is exceptionally good, and I'll likely take at least one or two speculative positions, based on the notion that we'll at least test the sp'2025 low. If that fails to hold, things should spiral to 1950/20 within days.. if not hours.

Goodnight from London

A fourth day for the bears

Despite a closing hour rally, US equity indexes closed broadly lower for a fourth consecutive day, sp -3pts @ 2075 (intra low 2064). The two leaders - Trans/R2K, settled lower by -1.4% and -0.2% respectively. VIX cooled by -2.2% to 20.50. The FOMC offers a viable excuse for a brief and unsustainable bounce, with the sp'1900s probable by end month.


sp'daily5

VIX'daily3

Summary

Another rather interesting day in market land, with a new cycle low of 2064 (with VIX 22.16) and a (not surprising) closing hour rally.

The Wed' FOMC will be a prime excuse for a Wednesday net gain, with further churn/upside across Thurs/Friday. With quad-opex this Friday, that further favours the bulls... after the recent cooling.

More broadly though... having broken a fair few initial supports, the outlook is increasingly bearish, as the bigger weekly cycles continue to turn toward the bears.

sp'weekly1b

A divergent lower MACD cycle high. At the current rate, we'll see a bearish MACD cross before end month, and in theory, that will offer first opportunity of some very powerful downside action, with VIX exploding into the 30/40s.

Of course, if the UK vote to remain... things will be rather different. The current polls increasing suggest we'll see a BREXIT.. which should rattle world capital markets.
--

Goodnight from London

A third day for the bears

US equity indexes closed broadly lower for a third consecutive day, sp -17pts @ 2079. The two leaders - Trans/R2K, both settled lower by around -1.1%. The VIX settled +23.1% @ 20.97. Near term outlook threatens a post FOMC (unsustainable) bounce to the gap zone of 2109/15, before far more dynamic downside to test the critical 2025 low.


sp'daily5

VIX'daily3

Summary

Another day for the equity bears... with the sp'500 having decisively broken the double low of 2085. There is soft gap support in the 2078/76 zone.

It is highly notable that the VIX managed a fifth consecutive net daily gain, the best run since Aug'2015.

Considering that we have already seen VIX 20s - with only the sp'2070s. A test of the sp'2025 low would likely equate to VIX in 28/32 zone.
--


Broader cycles continue to turn

sp'weekly6

A second blue candle... with a clear break of rising trend. We have a clear divergent lower MACD cycle high.. and we're set to see a bearish cross by end month. In theory, the most powerful downside will begin June 27-30th... with VIX 30s.. maybe 40s - if UK exit the EU... which now seems probable.

Things are getting interesting. 

Goodnight from London