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.


sp'daily5

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