VIX continues to cool

With equity indexes closing broadly higher for the second consecutive day, the VIX remained under downward pressure (intra low 13.60), settling -6.8% @ 13.84. Near term outlook is for the market to maintain the current levels into opex, before next opportunity of equity cooling.


VIX'60min

VIX'daily3

Summary

A second net daily decline for the VIX, as equity indexes continued to push upward.

A minor issue, that whilst the sp'500 broke a new multi-month high, the VIX is still holding above the April 1st low of 13.00.

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more later... on the indexes

Closing Brief

US equity indexes closed broadly higher for the second consecutive day, sp +20pts @ 2082 (new multi-month high 2083). The two leaders - Trans/R2K, settled higher by 2.6% and 2.2% respectively. Near term outlook offers continued upside melt.. not least with a looming Friday opex.


sp'60min

Summary

Closing hour action: it was one of those instances where you have price momentum continuing to cool, but actual prices continue to claw higher.
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So, a second day of rather significant gains, and for now, there is zero sign of a turn.

Considering opex is this Friday, the market will likely hold together into the weekend.

As of late Friday/early Monday, the lower hourly bollinger band will be around 2050, where there will also be trend support. It will not be easy to get any daily closes in the 2040s.

... and that means a monthly close under the 10MA (2017/23) will be really difficult.

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more later... on the VIX

3pm update - bullish sunset for a bullish day

The sp'500 breaks yet another new cycle high of 2080, a single point shy of the late Dec' high. VIX remains subdued, -5% in the upper 13s. With opex this Friday, the market will be more inclined to hold together/trade sideways, before the next cooling phase.


sp'60min

VIX'60min

Summary

Suffice to add... yesterday mornings low of sp'2039 is already a full 2% lower. Whether you want to put all the blame on yet another 'nonsense oil story'... or just plain bullish hysteria, the bulls are back in full control.

It is highly notable that in the next cooling phase.. first core target will be the recent 2033 low. Unless that is closed/held under.. equity bears should be at least somewhat spooked.


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Here in London...

A pretty bullish sunset.
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back at the close

2pm update - hourly cycle ticking lower

US equity indexes remain positive, having seen a new cycle high of sp'2079... just 2pts shy of the Nov' high. VIX remains very subdued, -6% in the upper 13s. Metals are very mixed, Gold -$9, whilst Silver is +0.6%.


sp'60min

VIX'60min

Summary

Underlying MACD (blue bar histogram) is indeed starting to tick lower for most equity indexes. I suppose you could look to the high from March 30th, and then look for a hit of the lower hourly bollinger.

As of late Friday, the lower bol' will be around 2050... which is not much more than 1% lower than current levels.
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time for a rather late lunch

1pm update - holding gains

US equities are comfortably holding broad gains for a second consecutive day, having seen a new cycle high of sp'2079, with VIX cooling back to the 13s. USD is holding rather notable gains of around 0.8% in the DXY 94.70s. Gold -$10. Oil -0.2% in the $41s.


sp'daily

VIX'daily

Summary

Seen on the bigger daily charts, there are clearly still a few levels left to clear, but the past few days of price action are pretty bullish.

A sig' net weekly gain looks highly probable, with next chance of a minor retrace not until after opex.

Even then.. how far could we retrace? At best, the 2040/30s. The 2020/10s look out of range next week, even if lousy earnings start to annoy the market.

.. but hey... with more stock buy backs.. why do earnings matter anyway?

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Here in London city...

It ain't bear weather... that's for damn sure.

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time to cook

12pm update - R2K and Nasdaq following

The R2K and Nasdaq comp', have followed the sp'500/Dow, breaking new multi-month highs, and for now, there is absolutely zero sign of a turn. Next natural upside for the R2K is the 200dma in the 1130s, almost 1% higher and would arguably equate to sp'2085/90.. with VIX 12s for this Friday's opex.


R2K, daily

Nasdaq comp', daily

Summary

Little to add.

The market continues to build what are a second day of broad gains... as full confirmed in a VIX that is in implosion mode, -5% in the 13.90s.

*Fed beige book is due at 2pm.. but really.. that won't likely offer anything to those hoping for a turn/reversal.
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time for some sun...

11am update - minor chop

The sp'500 is holding close to the opening high of 2076, but is clearly encountering a touch of resistance. VIX remains broadly subdued, -5% in the low 14s. Metals continue to claw back from early lows, Gold -$7, with Silver +0.3%. Oil is +0.5% after a net weekly inventory surplus of 6.6 million barrels.


sp'60min

VIX'60min

Summary

Suffice to add...  ongoing price action currently offers zero hope of a turn.

The VIX is even more bullish than equities, as its currently in outright implosion mode, already breaking into the 13s. Considering opex is looming, now the 12s look probable.

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notable strength, BAC, daily

Is the market now seriously trying to price in a second rate hike (which by default, would be bullish financials?).

In terms of price, major resistance is clearly @ $14.50. The equity bulls are going to need to see stocks like BAC break above such levels.

10am update - new cycle highs

US equities break new cycle highs, with the sp' hitting 2076 and the Dow 17859. VIX is naturally melting lower, -2% in the 14.40s. USD is +0.8% in the DXY 94.70s. Metals are weak, Gold -$12, with Silver -0.6%. Oil is -1.2% ahead of the latest EIA report.


sp'daily5

Dow, daily

Summary

*I could highlight the two leaders - Trans/R2K, both of which are yet to break new cycle highs, but it seems largely pointless.
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With a break to new cycle highs, equity bears are absolutely back to square one... as price action currently offers little other than further upward melt into opex... and beyond.

No doubt we'll get renewed downside at some point, but right now, even the 2020s look out of range. Given a few more weeks... the 50dma will be 2040/50 and offer first support.

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notable strength, DB, daily

A powerful gain, equity bulls just need the $21s to offer broader upside for rest of the year.
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Pre-Market Brief

US equity futures are moderately higher, sp +12pts, we're set to open at 2073, a mere 2pts below the recent key high. USD is +0.7% in the DXY 94.60s. Metals are under pressure, Gold -$15, with Silver -1.0. Oil is -1.2%, ahead of the latest EIA report.


sp'60min

Summary

*awaiting some key econ-data, notably retail sales.
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With overnight sig' strength in Asia and Europe, its not surprising to see another push higher for US futures.

Clearly, we're now on the edge of a major breakout, having been broadly stuck for a few weeks.

As of the open, the sp'500 will be a mere 3% from the May 2015 high.

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early movers...

BAC +2.1%... Mr Market expecting rate hikes?
FCX +1.8%.. as fears of bankruptcy continue to lessen

GDX -2.7%, as metals cool
RIG, SDRL, both lower by around -2.0%
TVIX -5% in the $4.30s, as VIX set for the 13s.

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Overnight action

Japan: +2.8% @ 16381
China: +1.4% @ 3066
Germany; currently +2.3% @ 9986
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Farewell to Peabody

Peabody Energy (BTU) has finally filed for bankruptcy, that leaves just Consol (CNX) as the last of the notable listed coal miners.

No doubt some will find a way to spin this as bullish for the sector and broader US/world economy.
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Oil causing trouble for the equity bears

The net daily gain in WTIC oil of $1.76 (4.2%) to $43.50, was unquestionably a primary motivator for today's mid morning rebound. Indeed.. it only took the algo-bots around 2mins to swing most indexes 0.5% to the upside. A core issue in the months ahead is where will oil broadly trend.


WTIC, weekly2

WTIC, monthly2

Summary

Most notable, the move into the $43s, has resulted in a clear break above the monthly 10MA. Equity/oil bears should be desperate for an April close <$41.

Today's rumour/chatter that Russia and the House of Saud have provisionally agreed to freeze oil production is just that...........a totally unsubstanciated/unconfirmed headline-rumour.

Ironically, even if correct, what about all the other producers across the world, including the USA? For global energy prices to stop broadly falling, output needs to be CUT... not just frozen.

For the moment, the Feb' low of $26.05 still looks like it will eventually be broken under.


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Macro-econ chatter, Mr Long with Mr Smith.



For those with an interest in the grander financial/societal issues, this is required viewing.


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Looking ahead

Wednesday is pretty packed.. with retail sales, PPI, business invent', the latest EIA report, and the Fed Beige book (due 2pm).
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Goodnight from London

Daily Index Cycle update

US equities closed broadly higher, sp +19pts @ 2061 (intra low 2039). The two leaders - Trans/R2K, settled higher by 0.8% and 1.0% respectively. Near term outlook is extremely borderline, as there is threat of a break above the key high of 2075. Best case near term downside is the 2025/15 zone.


sp'daily5

Nasdaq comp'

Summary

sp'500: broadly stuck within the 2075/20s. Price structure could be argued is a giant bull flag, although I would call it a choppy top.

Nasdaq: still stuck below the key 4900 threshold.

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a little more later...