A quiet end to October

US equity indexes closed moderately mixed, sp' u/c @ 2126. The two leaders - Trans/R2K, settled higher by 0.5% and 0.3% respectively. VIX settled +5.4% @ 17.06. Near term outlook still threatens a push to 2155/63, before an election inspired washout <2100.


sp'daily5

VIX'daily3

Summary

It was indeed a rather subdued day to conclude the month. Aside from Friday's 1pm hour of market upset, the equity bears are still failing to show any sustained/significant downside.

Most notable remains the somewhat elevated VIX, which managed a fifth consecutive net daily gain.. which is pretty unusual. A break into the 20s looks probable. If an election inspire washout to the sp'2080/70 zone, the most bullish upside target would be VIX 24/25.
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Update from Mr R.




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The monthly close

sp'monthly3c

The month settled with a blue 'elder impulse' candle. Yet, the setup is not particularly bearish, as we're still comfortably above the key 10MA (2083). To turn broadly bearish, I need to see a November close under the 10MA and to be decisive... see some price action in the 2050s or lower. Right now, the latter still seems unlikely, even with a Trump victory.

Goodnight from London

Weekend update - US weekly indexes

With the week ending on an 'FBI inspired' bearish note, US equity indexes settled with net weekly changes ranging from -2.5% (R2K), -0.7% (sp'500), to +0.1% (Dow). The market looks vulnerable across the first half of November, with probable downside of 2-3% for most indexes.


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

sp'500

The sp' saw a moderate net weekly decline of -14pts (0.7%), settling @ 2126. Underlying MACD (blue bar histogram) ticked lower for a twelfth consecutive week. There looks to be 2-3 weeks of further viable downside.

Best guess: downside to 2080/70, but no sustained action under the 200dma (2070s). Renewed upside, with a November close at least >2150. 

Equity bears still can't get confident unless a break below the lower weekly bollinger, currently in the 2060s.
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Nasdaq comp'

The Nasdaq declined by -1.3%, settling @ 5190. The weekly candle was of the bearish engulfing type, and that does bode bearish for the near term. First big support is the giant psy' level of 5K. Things only turn broadly bearish with some daily closes <4900.


Dow

The mighty Dow was resilient this week, managing a fractional net gain of 0.1%, settling @ 18161. The 18k threshold remains very important. A brief fall to the 17600/500s looks viable. The real issue is whether November closes above or below 18k.


NYSE comp'

The master index settled -0.9% @ 10446, the lowest close since early July. There is viable downside to around 10300. Things only turn broadly bearish with a weekly close under 10k.


R2K

The second market leader - R2K, was leading the way lower this week, with a very significant net weekly decline of -2.5% @ 1187. With the loss of the 1200 threshold, the door is wide open to next support in the 1160/40 zone. Alarm bells only sound if <1120.


Trans

The 'old leader' - Transports, saw another week of moderate chop, settling -0.1% @ 8018. Indeed, the 8k threshold - once resistance, is tending to be new support. There is viable downside to the 7700/600 zone. Things only turn bearish on a break of rising support, which as of mid November, will be around 7600.
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Summary

Most US equity indexes continue to lean weak from the Aug/Sept' highs.

There looks to be around 2-3% of viable downside for all indexes, with a multi-week cycle low no later than mid November.

The mid/long term outlook only turns bearish with sustained action <sp'2050, Nasdaq comp' <5K, Dow <17500, NYSE comp' <10k, R2K <1120, and Trans <7600.
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Looking ahead

A busy week is ahead, with more corp' earnings, but also a wheel barrow of key econ-data.

M - Pers' income/outlays, Chicago PMI
T - PMI/ISM manu', construction
W - ADP jobs, EIA report

*FOMC announcement (2pm). The market does not expect any change in policy, but the press release will probably overtly hint at a Dec' rate rise. There will NOT be a press conf'.

T - weekly jobs, product'/costs, PMI/ISM serv', factory orders
F - monthly jobs, intl' trade. 
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If you value these posts, subscribe to me. For around $1 per trading day, you will have access to my continuing intraday postings @ permabeardoomster.com. Or... you could buy 1 share of AMZN in about four years.

 
Regardless, I wish you a good weekend
--

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

Spooked by the Feds

US equity indexes closed moderately mixed, sp -6pts @ 2126 (intra low 2119). The two leaders - Trans/R2K, settled u/c and -0.2% respectively. VIX settled +5.4% @ 16.19. Near term outlook offers threat of upside on Mon/Tuesday, but broadly to 2080 in early November.


sp'daily5

VIX'daily3

Summary

Well, today sure wasn't dull.

We saw a micro opening washout to sp'2127, with a rather clear spike floor. The market soon battled upward to the low sp'2140s. Things churned in the 12pm hour..... and the rest of the day looked set for slow crawl.. leaning to the upside.

... but then news that the FBI are set to look into the Hillary emails again really rocked the market. Indeed, the 1pm price action was the most bearish in some months.

With the market seeing a signficant downward swing of 1%, the VIX naturally exploded into the 17s. Despite cooling a little, the weekly close in the 16s is notable. The key 20 threshold looks a relatively easy target, certainly no later than mid November.


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US.. relative to rest of the world

Spain, monthly

I'll merely highlight Spain, as its a reasonable reflection of many other world markets. With just one trading day left of the month, the IBEX is set for a very sig' net monthly gain of almost 5%. There is open air to at least 10k, which is another 8% higher.

Were it not for the election, the US market would probably be pushing to new historic highs, with Dow 19k. The point is... once the election is out of the way, the US market should be able to resume higher.

For now... no alarm bells unless a daily close in the sp'2050s or lower.

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

Another day of moderate swings

US equity indexes closed moderately mixed, sp -6pts @ 2133. The two leaders - Trans/R2K, settled +0.6% and -1.2% respectively. VIX settled +7.9% @ 15.36. Near term outlook still threatens a test of resistance around sp'2160, before broader downside to 2080, where the 200dma will be lurking in early November.


sp'daily5

VIX'daily3

Summary

Yet another day of moderate swings. The opening gains to 2147 lasted mere minutes before a rather sharp reversal to sp'2132. Then a typical attempt at a latter day rally, but unravelling into the close, breaking a new intra low of 2131.

The VIX managed a notable third consecutive daily gain. The key 20 threshold looks highly probable by the time of the US election.


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The valuation extremes

Just consider this...

*I'll round the numbers, to make the math real simple...

Amazon (AMZN)  EPS $2 a year.    Stock $760     PE: 380
Ford (F)  EPS $1 a year.    Stock $11     PE: 11

Interestingly, both have sales/rev' in the $30bns.

We've living in a market way beyond the Twilight zone... far......... far........... beyond.

Goodnight from London

2160s - lets get it over with

US equity indexes closed broadly weak, sp -3pts @ 2139 (intra low 2131). The two leaders - Trans/R2K, settled lower by -0.6% and -0.9% respectively. VIX settled +5.8% @ 14.24. Near term outlook still threatens a test of resistance around 2160, before broader downside to 2080/70 in early November.


sp'daily5

VIX'daily3

Summary

The market opened moderately lower, but cyclically, it was always going to be the case that the bears were liable to see the market reverse back upward.

It would still seem that Mr Market wants to wash out another tranche of short-stops, at multiple aspects of resistance - around sp'2160, before seeing some significant weakness into early November.
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Three trading days left of October

sp'monthly

The sp'500 is currently set for a third consecutive net monthly decline. That sure ain't bullish, but neither is ongoing price action significantly bearish.On balance, a weak first half of November.. but then climbing into end month, even as the Fed' are set to raise rates at the FOMC of Dec'14th.

The real question is.... does a interest rate target range of 50-75bps merit as 'full emergency'... or only 'semi-emergency' ?

Goodnight from London

Oil cooling back under $50

US equities closed moderately weak, sp -8pts @ 2143 (intra low 2141). The two leaders - Trans/R2K, settled lower by -0.5% and -0.8% respectively. VIX settled +3.4% @ 13.46. Near term outlook threatens another attempt to around sp'2160, before broader downside to 2080/70 in early November.


sp'daily5

VIX'daily3

Summary

The equity market saw a little weakness today, and we remain stuck within what is a bear flag. The recent low of 2114 looks set to hold into end month. At best, a test of the 200dma in the 2070s seems very probable in the first half of November.

VIX remains broadly subdued, and it remains a struggle just to see the low teens. If sp' cools under 2100 in early November, VIX will likely see a brief move to the key 20 threshold.
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Fed/market/political chatter from Schiff



The first 10 minutes are financial... but it then ventures into all manner of societal/political chatter. Make of that... what you will.
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Update from Mr C.



... and I agree entirely with Oscar on Gold.
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With the USD pushing into the DXY 99s this morning, WTIC oil was under some further pressure.

WTIC, weekly

A net daily decline of -$0.56 (1.1%), at $49.96. Its notable that energy bulls can easily sustain the 48/47s without denting the rising support/trend from the Feb' low. Unless oil is trading under the Sept' low of $43.06, there is little to be bearish about.

Its ironic that Faber, aka, Dr Doom, was just recently issuing an upside target for oil in the $70s. If that happens, energy stocks.. and the broader market will be considerably higher by late spring/early summer 2017.

Goodnight from London

Moderate gains to start the week

US equity indexes closed moderately higher, sp +10pts @ 2151. The two leaders - Trans/R2K, settled higher by 0.4% and 0.7% respectively. VIX settled -2.4% @ 13.02. Near term outlook threatens a challenge of the sp'2161/63 gap zone, but regardless, the broader outlook into early November remains bearish to at least the 2080/70 zone.


sp'daily5

VIX'daily3

Summary

So, some moderate gains to begin the week. Clearly, with the break above sp'2150, further upside to the gap zone of 2161/63 is back on the menu. Its highly notable that the 50dma is at 2159, and that will offer some strong resistance across this week.

VIX continues to melt lower, seeing a new cycle low of 12.83 today. If sp'2160s, it would seem we'll break (briefly) that low.. before the next multi-day up cycle in volatility.

On balance, despite today's gains, nothing has changed. A move (if brief) under sp'2100 - with VIX near 20, is  due.
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USD a little closer

The giant psy' level of DXY 100 is getting kinda close. A breakout seems more likely than a triple top. There are of course huge Implications for US/world capital markets, on any sustained move into the 100s. Its certainly something to keep in mind.

Here is something to ponder, which of Clinton or Trump would be more likely to inspire a break >100 ?

Goodnight from London

Weekend update - US weekly indexes

It was a somewhat mixed week for US equity indexes, with net weekly changes ranging from +0.8% (Nasdaq comp'), +0.4% (sp'500), to -0.2% (Trans). Near term outlook offers around 3% of downside into early November. More broadly, the US market still looks bullish, at least into spring 2017.


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

sp'500

The sp' saw a trading range of just 24pts, settling +8pts (0.4%) at 2141. There is clear resistance around the soft psy' level of 2150, with a recent short term low of 2114. Ongoing price action remains leaning on the weaker side, and a break <2114 looks due.

Underlying MACD (blue bar histogram) cycle ticked lower for a eleventh consecutive week. There is a viable 2-3 weeks lower, before cyclically, the market will be oversold.

Best guess: breaking <2114, with significant weakness into early November to the 2080/70 zone. No sustained action under the 200dma seems viable, with renewed strength once the US election is out of the way. 

Equity bears should be careful about getting overly excited, unless a monthly close under the 10MA (currently 2080s). Only a few daily closes in the 2050s or lower would merit 'alarm bells', along with DXY >100.
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Nasdaq comp'

The Nasdaq continues to be the market leader, managing a net weekly gain of 0.8%, settling at 5257. Underlying MACD cycle is set to turn negative next week. First support is the giant psy' level of 5K. Things only turn bearish with sustained price action <5K in late November.


Dow

The mighty Dow was broadly flat on the week, settling @ 18145. Lower weekly bollinger is @ 17600, which is also where the 200dma is lurking. The 18k threshold remains a key level of support. Things only turn broadly bearish on a weekly close in the 17500s.


NYSE comp'

The master index settled +0.5% @ 10571. There is viable near term downside to the 10300s. Things only turn bearish with the 10100s.


R2K

The second market leader - R2K, settled +0.5% @ 1218, notably holding the 1200 threshold. Despite the weekly gain, near term outlook is bearish, with viable downside to the 1160/50s. Alarm bells only sound with price action <1140.


Trans

The 'old leader', remains the market laggard, and settled -0.2% @ 8026. Underlying MACD cycle remains net positive. Near term outlook offers cooling to the 7700/600s. Things only turn broadly bearish with some daily closes in the 7500s.
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Summary

5 of 6 US indexes saw moderate net weekly gains.

Most indexes continue to struggle since peaking in August - the exception being the Nasdaq (new high in mid Sept').

Price action remains choppy, but leaning weak.

The bigger weekly cycles are offering around 3% of downside into early November.
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Looking ahead

The coming week will see a monstrous amount of earnings, notably:  CAT, AAPL (Tue), AMZN, GOOG, F (Thurs),and XOM (Fri).

M - PMI manu'
T - FHFA house price index, Case-Shiller HPI, consumer con', Rich' fed
W - intl' trade, PMI serv', new home sales, EIA report
T - weekly jobs, durable goods orders, pending home sales
F - GDP (Q3), employment costs, consumer sent'.

re: GDP, market consensus is for 2.5% growth. Considering other data points across July-Sept', that is arguably a little on the optimistic side. I'd not be surprised to see a first estimate near 2.0%. What should be clear, the US economy is not close to a recession, but neither it is doing great... its merely ticking along.

*there are a few fed officials due on Mon/Tues, but none of the events look important.
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If you value these posts, then subscribe, which will give you access to my continuing intraday chatter at permabeardoomster.com.

Regardless... have a good weekend
--

*the next post here will appear Monday @ 7pm EST

A third week for King Dollar

US equities closed a little weak, sp' u/c @ 2141 (intra low 2130). The two leaders - Trans/R2K, both settled -0.1%. VIX settled -3.0% @ 13.34. With a break of rising trend from the 2114 low, the door is wide open to a brief foray <sp'2100. The real issue is whether things spiral if the 200dma is broken under.


sp'daily5

VIX'daily3

Summary

Early morning weakness to sp'2130 was decisive enough to break rising trend from last week's low of 2114. Further, it provisionally confirmed the bear flag.

Despite equities leaning a little weak, the VIX was still unable to muster any upside, but then it was opex. The 15/16s look due next Mon/Tuesday. The key 20 threshold is due no later early November.


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Meanwhile, in FIAT land....

USD, weekly

A third consecutive net weekly gain for the USD. We're already close to the DXY 99s, and a break above the giant 100 threshold is now viable within the near term.

Unquestionably, the Fed do not want to see the USD break >100. Above 100, most should recognise that the next big level isn't until around 120, which would make for a powerful 20% appreciation against other currencies.

Those equity bears seeking a major down wave should be flying the flag for a hyper-strong dollar. The USD is certainly not the only variable that will help shape the direction of the US/world capital markets, but its one of the biggest ones.

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

The bear flag

US equity indexes closed moderately weak, sp -2pts @ 2141. The two leaders - Trans/R2K, settled lower by -0.4% and -0.2% respectively. VIX settled -4.6% @ 13.75. Near term outlook offers minor chop into opex, but broadly... a highly probable break to the sp'2080/70 zone.


sp'daily5

VIX'daily3

Summary

Equity bears were teased in the morning, with early weakness, testing rising support from the 2114 low. That held at 2133, and we then saw a great deal of micro chop into the close.

VIX looks floored in the 13s. The 12s won't be easy to see, as the market will be increasingly twitchy into early November. The key 20 threshold looks increasingly probable.
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The bear flag

There is a clear equity bear flag - spanning the last six trading days, as seen on the daily chart. Another wave lower - ahead of the election, looks a given.

sp'daily3

The above is just a simple extrapolation of the 2169/2114 wave,starting from the Wednesday high of 2148. In theory, a test of the 200dma doesn't look that bold a target. The bigger point though, is that there will be VERY high threat of a powerful whipsaw back upward. I see a few people still looking for the sp'2300s by year end. I find that a stretch, but certainly, the mid 2200s look viable, not least if WTIC oil continues to around $60.
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yours... trying.

Goodnight from London

Renewed downside is due

US equity indexes closed moderately higher, sp +4pts @ 2144. The two leaders - Trans/R2K, settled higher by 0.7% and 0.4% respectively. VIX settled -5.7% @ 14.41. Near term outlook offers renewed downside, with the 2080/70s viable into early November.


sp'daily5

VIX'daily3

Summary

The past five days of price action are likely forming a small equity bear flag. As of late Friday, we'll have provisional confirmation of the flag, with a move <2140.

VIX opened in the 14s, and flash-printed a low of 13.87. Another increase in volatility seems a given within the near term, at least to the 17/18s... probably the 20/22 zone.

The ultimate issue is whether we see the very bearish sp'2050s.. with VIX launching to the mid/upper 20s. Right now, that still seems difficult.

Goodnight from London

Naturally cycling upward

US equity indexes closed moderately higher, sp +13pts @ 2139. The two leaders - Trans/R2K, settled u/c and +0.6% respectively. VIX settled -5.7% @ 15.28. Near term outlook offers no higher than the 2161/63 gap zone, and then viable downside to around 2080/70.


sp'daily5

VIX'daily3

Summary

Cyclically the market was due some upside today, and we certainly saw some, but price action was notably shaky at times. Each point higher is seeing some sellers start to appear, and many recognise that there just aren't many willing buyers ahead of the election.

Best guess.. renewed weakness to the 2080/70 zone - where the 200dma is lurking, before a whipsaw higher. Equity bulls should be seeking to end the month somewhere in the 2100s.

Goodnight from London

Messy start to the week

US equity indexes closed moderately weak, sp -6pts @ 2126. The two leaders - Trans/R2K, settled lower by -0.4% and -0.2% respectively. VIX settled +0.6% @ 16.21. Near term outlook offers upside to 2150, at best.. a challenge to the 2161/63 gap zone. Broadly, the market looks set to see <2100, before the 2170s.


sp'daily5

VIX'daily3

Summary

A day comprised almost entirely of minor chop, as the market will be inclined for the 2150/60s, before the next opportunity of taking out last Thursday's low of sp'2114.

VIX is comfortably holding the mid teens, but if sp'2155/65 within a few days, VIX will briefly cool to the 14/13s.. before renewed strength for a push toward the key 20 threshold.
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Bonus chart: UK, monthly

The current monthly candle is getting very spiky, and considering the likely direction of the US market before end month, a net monthly decline for the FTSE looks increasingly probable.

Another failure to break and hold the 7000s would bode bearish. Its ironic, considering the BoE have already cut rates and spun up the printers on the premise that the economy will be under some post-BREXIT pressure. Things will turn very bearish on a monthly close under the 10MA, and that will be around 6600 across November.

Goodnight from London

Weekend update - US weekly indexes

It was a somewhat bearish week for US equity indexes, with net weekly declines ranging from -1.9% (R2K), -1.0% (sp'500, NYSE comp'), to -0.2% (Transports). With the break under sp'2119 and dow'18k, the door is open to another 3% of downside before the US election in early November.


Lets take our regular look at six of the US indexes

sp'500

A net weekly decline of -20pts (1.0%), settling @ 2132. The Thursday intraday low of 2114 was very notable, as it decisively broke the strong multi-spike floor of 2119. Underlying MACD (blue bar histogram) ticked lower for a tenth consecutive week, and this is the most bearish price momentum since late February.

Rising trend/support from the Feb' low of 1810 has been marginally broken, opening up the lower bollinger, which is currently around 2060 - notably, just 8pts below the 200 day MA.

Best guess: another 2-3% of downside to the 2080/60 zone, but then sharply rebounding, as nothing of significance has changed in the bigger picture. From there, a yearly close in the 2250/75 zone still looks viable.

Alarm bells should loudly ring on any daily close in the sp'2050s or lower, which would be decisively under multiple core aspects of support. By definition, the next support would then be the sp'1925/00 zone.


Nasdaq comp'

The Nasdaq settled -78pts (1.5%) at 5214. It is notable that the Nasdaq came within 2pts of breaking the recent historic high of 5242.Underlying MACD is set for a bearish cross next week, and that does bode bearish in the near term. Equity bulls have a comfortable 4% of downside buffer to the giant psy' level of 5K, before any real technical damage is done. Indeed, the sp'2070/60s - with Nasdaq holding around 5K, would be a very natural low, before renewed upside into year end.


Dow

The mighty Dow declined by a net -0.6%, settling at 18138. However, Thursday did see a break of the 18k threshold, with a low of 17959. Considering the past week's price action, it'd seem more probable than not, that the Dow will trade (if briefly) to the 17600/500s, before the next whipsaw back upward. The June/BREXIT low of 17063 looks well out of range.


NYSE comp'

The master index settled -1.0% @ 10521. There is a clear break of rising trend, and the door is wide open for a move to the lower bollinger around 10300/275. Things would turn exceptionally bearish on any price action under the giant 10k threshold.


R2K

The second market leader - R2K, saw a net decline of -1.9% @ 1212. Rising trend is borderline still intact. Underlying MACD cycle has turned negative for the first time since late February. Any price action <1200 would open up a swift 4% of downside to the lower bollinger - around 1150.


Trans

The 'old leader' - Transports, held up the best this week, lower by just -17pts (0.2%), settling at 8039. Indeed, this was the third consecutive weekly close above the psy' level of 8K. Considering WTIC oil prices holding firm around $50, the tranny is holding together very well indeed. Things only turn broadly bearish on a break of rising trend, which will be around 7500 in early November.
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Summary

Rising trend that stretches back to the Jan/Feb' lows is being provisionally broken, lead lower by the Dow.

There is around 3-4% of downside buffer before the equity bears cause any critical damage to the broader upward trend.

The market's 'old leader' - Transports, is notably holding together, which is especially impressive considering continuing strength in energy prices - which is inherently bearish for transportation companies.

Alarm bells should sound if sp'2050, NYSE comp' <10k, Dow 17400, Nasdaq 4900s, R2K 1140, and Trans <7500. Until then, equity bears need to remain careful they don't get lost in pre-election bearish hysteria.
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Looking ahead

Its a relatively light week for econ-data, but there will of course be an increasing number of corp' earnings.

M - empire state, indust' prod'
T - CPI, housing market index
W - housing starts, EIA report, Fed Beige book
T - weekly jobs, phil' fed, existing home sales
F - *OPEX*

*the only notable fed appearance will be Fischer on Monday.

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Yours truly continues to write intraday. If you think I'm worth around $1 per trading day, then hit the subscribe button!

In any case.... have a good weekend
--

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