DB spooking the market

US equity indexes closed broadly weak, sp -20pts @ 2151 (intra low 2145). The two leaders - Trans/R2K, settled lower by -0.2% and -1.4% respectively. VIX settled +13.2% @ 14.02.  Near term outlook offers choppy upside into the monthly/Q3 close, with another push higher in early October.


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VIX'daily3

Summary

It was a pretty normal day until around lunch time, when a list appeared detailing ten hedge funds that want little to do with Deutsche Bank anymore. Can anyone blame them?

Clearly, less involvment from other financial institutions is not great for DB. Yet.. its more about unsettling mainstream confidence than anything.


DB, monthly, 20yr (linear scale)

DB stock has been on the slide since the May 2007 high of $125.94. With one trading day left of the month, the current candle is of the bearish engulfing type, having broken a new historic low of $11.19 this afternoon. As a profitable financial institution, DB is finished. DB know it. The German Govt' know it. Even Draghi at the ECB knows it.

The only issue is when the bailout, support program, or whatever 'they' want to call it, is announced.

Goodnight from London

Is Mr Inflation lurking?

US equity indexes closed moderately higher, sp +11pts @ 2171, (intra low 2151). The two leaders - Trans/R2K, settled higher by 0.3% and 0.7% respectively. VIX settled -5.4% @ 12.39. Near term outlook offers further upside into the Sept'/Q3 close.


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VIX'daily3

Summary

It was a rather interesting day in market land. There was a fair amount of minor chop in the morning, but then a significant swing higher in the afternoon, partly inspired by a surge in oil prices.

VIX cooled for a second consecutive day, unable to even hold the 13s. Despite the looming election, the key 20 threshold looks a stretch.
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Inflating commodities

I could highlight 20-30 charts, but the following two will have to suffice for today...


Copper, monthly

Copper has built a strong floor since the Jan' low of $1.94. A move >$2.40 in Oct/Nov', would break the downward trend that stretches back to 2011. First target would then be the 2.80/3.00 zone. Interestingly, the Russian equity market is similar in price structure, and has recently broken out.


sp'500 vs CRB, weekly, 10yr

Since the Jan'19th low of 154.85, the CRB has been battling upward. Its now formed what is likely the first higher low of 176.67. A push to the 210/230 zone before year end looks viable. 

If commodities do climb into next year, it bodes for far higher equity levels, not just for the US market, but across the world.

*I will highlight the world markets this weekend.. and it remains the most important post I provide each month.

--
Its almost the end of the month and quarter. If you like my posts, then support me, which will give you access to my continuing intraday posts. You know where to subscribe!

Goodnight from London

Post debate rebound

US equity indexes closed moderately higher, sp +13pts @ 2159 (intra low 2141). The two leaders - Trans/R2k, settled higher by 0.8% and 0.4% respectively. VIX settled -9.7% @ 13.10. Near term outlook offers broad upside into end month, and pushing into Q4.


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VIX'daily3

Summary

With the first presidential debate out of the way, it was arguably a case of relief in equity land. This was especially reflected in the VIX which was crushed lower.. even seeing an intraday low in the 12s. Single digit VIX remains viable... not least if the market can broadly rally to the sp'2220s by mid October.

I am well aware a fair number of you are seeking the 2200s, only for the market to then unravel.. with some kinda of crashy decline before year end.

Yes, there are MANY problems, not least the financial monster that is Deutsche bank, along with all manner of simmering geo-political unrest. For now though, things continue to keep on ticking along.
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Bonus chart... Germany, monthly

With just three trading days left of the month/quarter, its notable that the powerhouse of the EU - Germany, is currently net lower by -2.2%. It won't be easy to see that fully reverse that across just three days. Most other world markets are moderately mixed.

For the 'five wave' believers, the German DAX has the cleanest price structure of any world market out there. In theory, if you like the idea that the next bear market will be around 50% - with 8K as new long term support, that'll require DAX 15/16k.. which would likely take until 2018 to reach. Dwell on that.

Goodnight from London

Weakness to start the week

US equities closed broadly weak, sp -18pts @ 2146. The two leaders - Trans/R2K, settled lower by -0.3% and -1.1% respectively. VIX settled +18.0% @ 14.50. Near term outlook offers renewed upside to the 2180/90s before end month.


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VIX'daily3

Summary

So, some weakness to begin the week. Yet... last week began weak, only to result in most indexes building sig' net weekly gains.

For now, I just can't take seriously any such weakness. Things only turn a little bearish if the recent low of 2119 is taken out, and that doesn't look likely this week.

As for VIX, a very sig' net daily gain of 18%, but that only takes the VIX to the mid 14s. The key 20 threshold looks as distant as it usually does.


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Eyes on the USD, weekly2

A slightly cooler dollar to start the week. Any move into the DXY 94s would be somewhat interesting. Those equity bears seeking a massive correction before year end, really ought to be seeking the DXY 97/98s... with an eventual breakout >100.

I guess I should conclude today by saying.... 'enjoy the show' at 9pm EST.

Goodnight from London

Weekend update - US weekly indexes

It was a bullish week for US equity indexes, with net weekly gains ranging from 2.4% (R2K), 1.2% (sp'500, Nasdaq comp'), to 0.8% (Dow). A September close around sp'2190/2200 looks viable, with mid term strength all the way into spring 2017.


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

sp'500

A Monday low of 2135, peaking on Thursday at 2179, settling the week net higher by 25pts (1.2%) at 2164, a mere 29pts shy of the recent historic high.

Underlying MACD (blue bar histogram) cycle remains moderately negative. As things are, another bullish cross appears viable in 2-3 weeks. The upper bollinger is offering the 2220s. By late Oct/early Nov', the lower bollinger will be around the 2100 threshold.

Best guess: holding above 2150, with the 2220/30s by late October. The 2300s are viable in December... despite the Fed likely to hike rates. 

It remains the case that equity bears have nothing to tout unless the market starts putting in some daily closes in the 2050s or lower.
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Nasdaq comp'

A second consecutive net weekly gain for the Nasdaq, breaking a new historic high of 5342, settling +1.2% @ 5305. Upper bollinger is offering the 5400s in the near term. If the market can hold together across the tricky month of October, then the 6000s are an entirely valid target for late spring/early summer 2017. First big support is around the 5K threshold, and that is a clear 300pts (6%) lower!


Dow

The mighty Dow was the laggard this week, but still managed a net weekly gain of 0.8%, settling @ 18261. First target is the recent historic high of 18668. Upper bollinger will be offering the 19K threshold by late Oct/early Nov. Any price action >19k, should give clarity that Dow 20K will be seen. From there, grander upside target is 25/26K, but that would likely take until spring 2018.


NYSE comp'

The master index settled +1.8% @ 10717. First target is the 11k threshold, and then the May 2015 high of 11254. Things only turn bearish on a break <10500.


R2K

The second market leader - R2K, broke a mid term high of 1263, settling +2.4% @ 1254. The June 2015 high of 1296 is a mere 42pts (3.5%) higher, and looks set to be tested by late Oct. A yearly close in the 1300s seems highly probable.


Trans

The 'old leader' - Transports, settled +2.1% @ 7936. There remains powerful resistance around the 8K threshold, which has been a strong wall since March. Another attempt to break/hold >8k seems probable, with the 8300/400s viable by late November. Even on the most bullish outlook, the Tranny is still at least 4-5 months away from challenging the Nov' 2014 historic high of 9310.
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Summary

The US equity market continues its broad climb from the Jan/Feb lows.

The Nasdaq is leading, with the sp/dow following. The R2K is the next index set for a new historic high.

Equity bulls have around 5% of downside buffer zone, before any critical technical damage is done.

Best guess: continued broad upside into Q3 earnings, a little 'election inspired' chop/volatility, and then climbing into mid Dec'.. when the fed are set to increase rates.
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Five big waves

I generally try to refrain from adding numbers/letters to most of my charts, but the following is something that many of you should be familiar with.

sp'monthly1c

The important point of this chart does not concern possible upside price targets, but the aspect of time. Considering the duration of the wave from Mar'2009 to May 2011, the current wave that began in Jan/Feb' 2016 will almost certainly continue into next spring. If that is the case, we could be trading in the sp'2400s.. or even 2500s by June/July.

It is highly notable that having decisively broken above 2138, the next big fibonacci price level is not until 3047. I'll cover the issue of price in more depth at a later date.
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Looking ahead

M - New home sales
T - Case-Shiller HPI, PMI serv', consumer con', Richmond fed'
W - Durable goods orders, EIA report
T - Weekly jobs, GDP (rev'2), intl' trade, pending home sales
F - Pers' income/outlays, Chicago PMI, consumer sent'

*there is an absolute truck load of fed officials across the week. Most notable, Yellen is speaking (video conf') at the Kansas city Fed, Thurs' AH.


--
If you have valued my posts since Feb' 2012, you can support me via a monthly subscription, which will give you access to my continuing intraday posts, at my main home of permabeardoomster.com

If you think I'm worth the grand sum of around $1 per trading day, then subscribe!

In any case.... enjoy the autumnal weekend
--

*the next post on this page will appear Monday @ 7pm EST

Cooling into the weekend

US equities closed moderately weak, sp -12pts @ 2164. The two leaders - Trans/R2K, settled lower by -0.3% and -0.7% respectively. VIX settled +2.2% @ 12.29. Near term outlook offers the sp'2180/90s next week... with the 2200s technically viable.


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VIX'daily3

Summary

After two broad net daily gains, it was not surprising to see a little cooling into the weekend. Its especially notable though, that the VIX only climbed a little, not even able to reach the 13s.

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

Nasdaq just keeps on pushing

US equity indexes closed broadly higher, sp +14pts, @ 2177 (intra high 2179). The two leaders - Trans/R2K, settled higher by 0.4% and 1.5% respectively. VIX settled -9.6% @ 12.02. Near term outlook offers weak chop into the weekend, with the 2200s viable next week.


sp'daily5

VIX'daily3

Summary

A second day of broad equity gains, as with the fed out of the way until early November, the equity bulls have a clear run for at least 2-3 weeks.

Volatility is naturally continuing to implode, already breaking into the 11s. The 10s look due with the sp'2190s next week. The only issue is whether we'll see single digit VIX (last seen in Feb'2007), with the sp'2200s.

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Most notable aspect of the day...

Nasdaq,monthly

A new historic high of 5342. A monthly close in the 5300s increasingly looks probable. Maybe even the 5400s? Underlying MACD (blue bar histogram) is set for a bullish cross within 1-2 weeks. In theory, price momentum could continue ticking higher all the way into next spring. Mainstream talk of the 6000s by late spring/early summer 2017 should start to appear.

Goodnight from London

Not surprising

US equity indexes closed significantly higher, sp +23pts @ 2163. The two leaders - Trans/R2K, settled higher by 1.8% and 1.4% respectively. VIX settled -16.5% @ 13.30. Near term outlook is for further upside into end month.. as the sp'2200s remain due.


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VIX'daily3

Summary

So, the Fed decided to hold off from raising rates... as expected. There are now just two FOMC's left of the year.

My best guess remains the same.. a hike in Dec'.. to wrap up the year.

With the FOMC out of the way, the VIX has been duly crushed, and even saw the 12s briefly this afternoon. A very valid question remains... 'single digit VIX with the sp'2200s' ?

In any case... equity bulls look to have an open road into October. Q3 earnings should come in at least 'reasonable', and that would give the market the excuse for further gains (or at least consolidation in the 2200s) before a viable push into the 2300s by end year.

To be clear, I see higher rates as a good thing. Ongoing 'emergency level' rates are a severe distortion to the US economy and market. A 25bps increase in December should not merit an 'end of the world' outlook.
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Fed chatter from Schiff

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Bonus chart... Nasdaq, monthly'2, 20yr

There was a very notable new historic high of 5299 this afternoon. A monthly close in the 5300s now looks probable, and it should start to awaken some to the notion that the 6000s are a viable target for spring 2017. On any basis... the equity bulls should be very pleased with the current situation. On the flip side, bears have nothing to tout unless sp'2050s.. and frankly, the recent low of 2119 now looks secure for some months.

Goodnight from London

Excuses 468-470

US equity indexes closed moderately mixed, sp' u/c @ 2139. The two leaders - Trans/R2K, settled u/c and -0.3% respectively. VIX settled +2.5% @ 15.92. Near term outlook offers further minor chop into the FOMC announcement. A rate increase remains highly unlikely until Dec'.


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VIX'daily3

Summary

A pretty interesting day, not least due to the political grilling of the CEO of WFC. The new historic low in DB was probably something that many didn't even notice though.

The market is carefully poised ahead of the FOMC. It could be argued price structure is a big bear flag on the daily charts. With some distinct cooling in the closing hour, a few of the daily index candles settled to the 'black-fail' type. That type of candle is not to be dismissed lightly.

Best guess remains: the 2119 low holds... as no rate hike is likely.

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Fed chatter from Schiff


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Excuses 468-470

Wednesday will see the latest FOMC announcement. Arguably, the macro econ-data is a little worse than the early summer, so it would make little sense (from the Fed's perspective) to raise rates now... as they sure didn't want to raise them this summer.

My view has remained unchanged since the Jan/Feb' equity down wave. The Fed' won't raise until the Dec' FOMC. It would make far more sense, as the US election will be out of the way, and the Fed has tended to prefer taking action just before year end.

I can think of many excuses that the Fed might give tomorrow as to why rates weren't hiked. Yet the excuses given by the Fed tomorrow will be of little importance. What will matter is whether the market still has confidence in those working at the US branch of Print central. After all, the current system is held together by a somewhat shredded mesh of faith and confidence.

In any case... tomorrow afternoon won't likely be dull.
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**Bonus chart**  USD, weekly2

Something to watch tomorrow afternoon is the USD. A break above DXY 96.25 would be bullish, and provisionally trash the above H/S scenario. Dollar bears should be seeking a break under rising trend, which is currently around 94.75.

Unquestionably, the Fed do not want a strongly rising dollar, but it can't stay in the current trading range forever. At some point its going to break, whether its >100... or <90... we'll just have to see.

Goodnight from London

Choppy start to the week

US equity indexes closed moderately mixed, sp' u/c at 2139 (intra range 2153/35). The two leaders - Trans/R2K, settled higher by 0.3% and 0.6% respectively. VIX settled +1.0% @ 15.53. Near term outlook offers further moderate chop ahead of the FOMC this Wednesday afternoon. No rate hike is anticipated, and broadly, US equities should battle higher into end month.


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VIX'daily3

Summary

Another day closer to the FOMC, with the market broadly stuck within the sp'2120/50s.

Indeed, that will remain the case until the Fed issue a press release this Wed' @ 2pm, and tell the world financial markets if rates are to be raised.

As things are, I expect not much other than excuses 468-470 for 'not raising rates'. A rate rise would still seem far more natural at the Dec' FOMC.
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re: VIX. Naturally pretty subdued, as the main market does not expect a rate increase. The key 20 threshold looks out of range in the near term.


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Eyes on the German market

DAX, monthly, 20yr

With DB at threat of breaking a new historic low (<$12.48), some attention should be given to the German equity market. Outlook would turn bearish on a break of support, currently in the 9300s. By year end, if the DAX is trading <9700, it should be seen a real problem.

For the moment though... the underlying trends are still bullish.

Goodnight from London

Weekend update - US weekly indexes

It was a very mixed week for US equity indexes, with net weekly changes ranging from +2.3% (Nasdaq comp'), +0.5% (sp'500, R2K), to -0.8% (NYSE comp'). Near term outlook offers chop into the FOMC of Sept'21st. From there... assuming no rate hike, the market should resume higher, as the sp'2200s remain due.


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

sp'500

The sp' opened the week at 2119, then reversed with a hyper-ramp to 2163, but settling +11pts (0.5%) at 2139. Underlying MACD (blue bar histogram) ticked lower for a sixth consecutive week.

Rising trend from the Feb' low - as of next week, will be around the 2100 threshold. If 2100 fails to hold, next key support are the 2050s.

Any sustained price action in the 2050s or lower, would bode EXTREMELY bearish, as other indexes would also be breaking their respective rising trends and multiple aspects of support.

Best guess: no rate hike until the Dec' FOMC, with equities rising into end month... and broadly all the way into spring 2017. 

Equity bears can not justifiably get confident, unless the market puts in a few daily closes in the 2050s or lower. If that happens, then talk of 'autumnal/winter' upset to the 1600/1500s would become a valid scenario.
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Nasdaq comp'

It was the best week for tech since late June, with the Nasdaq settling +2.3% @ 5244, a mere 43pts shy of the recent historic high. The upper bollinger will be offering the 5400s into end month. Any Sept' or Oct' close in the 5300s should be enough to begin awakening the mainstream to the notion that the 6000s are a valid target for late spring/early summer 2017.

Equity bears need to see a break below the 5000/4950 support zone, to become confident that the market will unravel this autumn. Right now, that seems extremely unlikely, as Q3 earnings will likely come in at least 'reasonable'. This week's very significant gains in tech behemoths - AAPL and INTC, of 11.4% and 6.3% respectively, bode well for the broader market.


Dow

The mighty Dow saw a minor net weekly gain of 0.2%, again settling above the key threshold of 18k. As of next week, rising trend will be around 18k. If there is a failure, first downside target would be the 17500/400 zone. The BREXIT low of 17063 looks extremely difficult to reach, even if the fed raise rates.


NYSE comp'

The master index settled -0.8% in the 10500s, which is a key price cluster area. Rising trend will be 10500 next week. If it holds, first upside target for the autumn is the 11k threshold. The May 2015 high of 11254 is within range by year end.


R2K

The second market leader - R2K, settled +0.5% @ 1224, having managed to hold the 1200 threshold. Rising trend will be around 1180 next week, so the bulls have almost 4% of downside buffer before any serious technical damage. A break >1240 would be bullish, and bode for another run to challenge the June 2015 high of 1296. A year end close in the 1300s is well within range.


Trans

The 'old leader' - Trans, saw a net weekly decline of -0.7%, settling @ 7770. The 8K threshold remains strong resistance. Rising trend will be in the low 7300s next week, and that is around 5% lower. Those equity bulls seeking broader market strength into year end, require a break above the April high of 8149. Based on the past four months of price action, that will not be easy.
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Summary

Despite some ongoing weakness, all US equity indexes are holding rising trend from the Jan/Feb' lows.

Most indexes (Transports is the exception), are broadly building a series of higher highs and higher lows.

The headline indexes - sp/dow/nasdaq, could easily break new historic highs in the near term. The R2K is next to follow.

If rising trend is broken, there is a viable 3-4% downside, before causing any critical technical damage, which would merit 'alarm bells', such as the sp'2050s.
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Looking ahead

M - housing market index
T - housing starts
W - EIA report.

FOMC announcement @ 2pm. The market is very mixed about whether the fed will raise rates. On balance, a 'no change' outcome would be a relief to the market, and offer a valid excuse for renewed equity upside.

T - weekly jobs, existing home sales
F - PMI manu'

*there is a fed conf', with Harker, Lockhart, and Mester on Friday @ 12pm. That will no doubt get at least some media attention.
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If you have valued these ongoing posts since 2012, you can support me via a monthly subscription, which will give you access to my continuing intraday posting @ permabeardoomster.com

Have a good weekend
--

*the next post on this page will appear Mon' 7pm EST

USD rising ahead of the FOMC

US equities closed moderately weak, sp -8pts @ 2139 (intra low 2131). The two leaders - Trans/R2K, settled lower by -0.4% and -0.2% respectively. VIX settled -12.2% @ 15.37. Near term outlook offers further chop, with the market set to remain broadly stuck within the 2120/50 zone, until the FOMC announcement.


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VIX'daily3

Summary

Quad-opex naturally saw a lot of chop, leaning on the moderately weaker side.

However, the VIX did reflect underlying market confidence, as it cooled into the weekend, which resulted in a significant net weekly decline.. having briefly seen the 20s in pre-market on Monday.

I will note there is a threat of the sp'2070/50 zone - where there are multiple aspects of support. That would likely require the fed to raise rates next Wednesday, and frankly.. that just doesn't seem at all likely.

I remain of the view the fed won't raise until the Dec' FOMC, which would be a far simpler time, not least as the US election will be out of the way.
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USD, weekly'2

A net weekly gain of 0.8%, settling at DXY 95.99.

RE: H/S scenario. Any break above DXY 96.25 next week would provisionally trash the scenario. A break <94.75 would break the mid term rising trend from May, and would open the door to the 92.00-91.50 zone before year end.

My best guess remains the same... no rate hike until December. If correct, it'd give the USD the excuse for further cooling across Oct/early Dec', before a bounce into early 2017, and then significant weakness across the summer/autumn.

By definition, the H/S scenario offers the DXY 83/82s. I understand how that could be seen by many as crazy talk. First things first... lets see how the USD trades with next week's Fed decision.

Goodnight from London
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*the weekend post will appear Sat' 12pm EST

They tell me its crashing

US equity indexes closed broadly higher, sp +21pts @ 2147 (intra low 2122). The two leaders - Trans/R2K, settled higher by 0.6% and 1.3% respectively. VIX settled -10.1% @ 16.30. Near term outlook offers a great deal of moderate price chop all the way into next Wednesday's FOMC.


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VIX'daily3

Summary

There is not much to note about today. There was a pre-market tease to the equity bears, as the sp' tested the 2120/19 floor, but it held of course.. with the broader market building gains across the day.

If the Fed decide to once again hold off from raising rates - which seems very probable, then the market will resume pushing higher into October, and viably, all the way into spring 2017. 
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The crash callers

Like many of you, I read and follow a lot of people online. A few are outright bullish cheerleaders... others are from the more murky corners.

Its that time of year when the crash/collapse calling is most frequent. This is somewhat understandable, as some of the biggest drops have been during the Sept-Oct' period.

The following three videos are a fair representation of some of the ongoing crash calling.





Ron Walker is actually one of my most favoured chartists, but how could he be bearish with the market just 2-3% from recent historic highs? Walker can spend hours quoting dozens of different technical indicators, but actual price action remains broadly bullish, and that's what really matters, right?
-


The end game - SGT



When they aren't promoting a particular micro mining stock, SGT will normally have guests touting an imminent collapse wave. In particular, the 'dollar doomers' are regularly featured. After all, the American people are going to be shopping at Walmart, and pay with Gold and Silver coins, yes?
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Financial apocalypse - Bo Polny



The phrase 'viewer discretion advised' comes to mind for this third and final example. Its 'entertaining' in a particularly twisted way, and is far beyond the twilight zone of 'kook' land. I'd imagine Mr P would be interesting
to chat with, and I have to wonder, is he currently holding hundreds of VIX calls and SPY puts?
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Nothing bearish yet

Despite the (surprising) decline back under the breakout level of sp'2134, the US market remains broadly bullish. My personal 'alarm bell' level are the sp'2050s. If we see any sustained price action in the 2050s or lower, then yes... I'll be open to some kind of sharp (if brief) crashy move. Until then though... any such crash talk can be dismissed as attention-seeking, playing to the 'end of the world' crowd, or just plain wrong.

I could easily increase my audience by touting such an 'imminent crash', but as I've said a fair few times over the last four years... I ain't doing it.

Goodnight from London

Oil remains in cooling mode

US equity indexes closed moderately mixed, sp -1pt @ 2125. The two leaders - Trans/R2K, settled lower by -0.2% and -0.1% respectively. VIX settled +1.6% @ 18.14. Near term outlook offers the 2150s ahead of the weekend. Clearly, the 2200s are out of range until after the FOMC.


sp'daily5

VIX'daily3

Summary

Today was a lot less exciting, as price action is becoming more subdued, with the market another day closer to the FOMC.

With a test of the 2119/20 floor in the closing hour, we now have a short term triple floor of sp'2119/20/19, and that will likely hold into next week's rate decision. I do recognise the threat of another push lower - regardless of a hike or not, but I sure don't expect price action in the sp'2050s or lower.
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Oil continues to cool

WTIC oil, weekly

Oil has continued to broadly cool since last week's high of $47.75, settling -$1.32 (2.9%) @ $43.58. Short term price structure is threatening a move to the 42/40 zone.. before pushing upward into October.

I'm still of the view that we'll break back above the psy' level of $50. If correct, that would unquestionably help kick the equity market higher into the 2200s and beyond.

I will conclude by noting, I've no doubt that if oil is trading in the $60/70s in 2017, the cheerleaders on clown finance TV will tout it as a good thing for the US consumer.

Goodnight from London