VIX continues to claw upward

With US equities settling broadly lower for a second consecutive day, the VIX was naturally net higher for a second day (intra high 16.85), settling +2.9% @ 16.05. It does remain notable that the VIX remains relatively subdued, still to show any real upside power.


VIX'60min

VIX'daily3

Summary

In the scheme of things, VIX is clearly still pretty subdued in the mid teens.

It was highly notable today that whilst the sp'500 broke below the Friday low of 2052, the VIX did not break the Friday high of 17.09.

As things are.. best equity bear case is for the sp'2000/1990s.. before the next rebound of around 3%. At best... a brief foray to the VIX 19-21s.. before rapid cooling into mid May.

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VIX has high potential to spike into the 25/35 zone in late May..  and that will require the sp'1950/00 zone.
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more later... on the indexes

Closing Brief

US equities closed broadly lower for a second consecutive day, sp -12pts @ 2051 (intra low 2045). The two leaders - Trans/R2K, settled lower by -0.9% and -0.8% respectively. Near term outlook offers a break under the important 2040 threshold.. with a fair opportunity of a weekly close in the 2020s.


sp'60min

Summary

*closing hour action: minor chop.. leaning somewhat weak in the final minutes.
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So, a second day lower... with 2045 being 66pts (3.3%) from the recent key high of 2111.

For now... bears have a moderate chance at a 38% fib retrace of the 1810-2111 wave.. into the sp'1990s, before the next bounce of at least 3%.

Considering the closing hour action, a Thursday move to the 2063/60 gap zone looks somewhat probable, before another attempt to break the 2040 threshold.

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Awaiting TSLA earnings...

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more later... on the VIX

3pm update - battling into the close

US equities break a new intra low of sp'2045, although it remains notable that VIX has still not broken above the Friday high of 17.09.. so far only hitting 16.85. The divergence threatens another equity bounce before a more viable break into the 2020s.


sp'60min

VIX'60min

Summary

The sp'2040 threshold is unquestionably a pretty important level.

Considering the complete lack of any VIX spike/capituation high.. there still seems another viable push lower in equities across the next 2-3 days.

Any move into the 2020s should bode for 2000/1990s before the next major multi-day bounce - which would likely be to 2050/60 in mid May.

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notable weakness... miners, GDX, daily

Provisional trend break.. but I'd argue short metals/miners would be one of the worse possible trades right now.

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back at the close

2pm update - bearish summer sunshine

US equities remain broadly weak, and look set for a second consecutive net daily decline in the sp'2040s. A key break of the two soft lows of 2039/33 looks increasingly probable before the weekend, along with VIX 18/19s. Oil is not helping market mood, -0.6% in the $43s.


sp'weekly1b

Summary

*note the spike on this weeks candle.. lower high... lower low, with a break under the 10MA. Arguably, the 20wma around 2K is a valid target for the more aggressive bears.
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Suffice to add... if 2111 is a key mid term high... the next wave will go well below the 1810 low this summer.
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notable weakness... TSLA, daily

TSLA - like the main market, has been having increasing problems across the last few weeks.. and its really looking ugly into earnings... due at today's close.

Natural support $200/195, then the 150/140 zone.. with the Feb' low of $141s.

Great product... but they just aren't making a profit.

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Here in London city... its rather glorious...

The first proper early summers day in the metropolis... only the 60s.. but hey.. thats okay. Naturally, yours truly is already counting down the weeks until this summer cycle ends... t-18 weeks (or so)

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back at 3pm

1pm update - seeking the 2020s

US equities remain broadly weak, and look set for a second consecutive day of declines. The sp'2040 threshold - where the 50dma is lurking looks an easy target. However, considering the VIX still hasn't shown any upside power yet.. the 2020s now look a valid target by the weekend.


sp'daily5

VIX'daily3

Summary

A lot of chop... but we're still leaning weak.

Clearly.. we're yet to see any powerful downside.. in theory... another 2-3 days lower looks probable.

Maybe I'm just getting overly bold, but the 2020s look probable in the current multi-day down wave. If that is seen.. then it'll likely keep on cooling to the 2000/1990s... which would make for a very natural short term floor.

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notable weakness, miners, GDX, daily

A third consecutive day lower.. but still holding the broader upward trend.
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time for some sun.... back 2pm

12pm update - borderline interesting

US equities remain weak, but still... equity bears can't justifiably get even initially excited until a break under the two soft lows of sp'2039/33... with a close in the 2020s. For now, the market remains relatively close to the recent key high of 2111.. with a VIX that is yet to show any real upside power.


sp'daily5

VIX'daily3

Summary

Not much to add.

Next support is around 2040.. with two soft lows of 2039/33 as next line of defence.

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notable weakness/reversal... Oil... USO, daily

In theory.. the $10.00 threshold is a valid target in the near term.. and that is a clear 7% lower.
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Metals are struggling.. as the USD is slowly clawing upward in the DXY 93s... the related mining stocks are under strong pressure... with the ETF of GDX -4% or so. More on the metals/miners later....
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time to see what the cheerleaders are saying on clown finance TV....

11am update - the spirit of the bull maniacs

US equities remain moderately lower, and despite ongoing weakness, it remains the case that the bull maniacs remain extremely confident.. with a fair few touting broad upside across the rest of the year. For the moment... nothing has changed since the key historic high of 2134 in May 2015.


sp'daily5

USO' daily2

Summary

*EIA report: net surplus of 2.8 million barrels.

USO saw a clear break of rising trend yesterday.. and in theory.. $10.00 is a valid target... and that is another 9% lower... which if correct... sure won't help US equities.

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notable weakness... BA, daily

Another one of the key stocks I am following.. which have seen a key break of rising trend. Clearly, its going to take a sig' market upset just to drag BA back to the Feb' low of $102.10.

10am update - breaking lower

US equities continue to slide, with the sp'500 breaking the Friday low. Next support is around 2040 - where the 50dma is lurking. For the moment, VIX remains broadly subdued, +4% in the 16s. Oil is +2.5%, ahead of the latest EIA report.


sp'60min

VIX'60min

Summary

re: VIX.. yes its still pretty subdued.. and is still not showing any real upside power.

The opening black-fail hourly candle is not exactly inspiring.

To counter that, underlying MACD (blue bar histogram) cycle is set for a bullish cross in the 10am hour.. and that would offer the sp'2030s today.
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So.. opening declines... somewhat interesting, but there are multiple aspects of support from 2040, 39, 33.

Equity bears should be battling for the 2020s, which would offer some initial clarity that 2111 is a key mid term high.

Best bear case is a 38% fib retrace of the 1810-2111 wave... which would give the 1990s.. before next sig' bounce into 3rd week of May.

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notable weakness, BAC, daily

As economic weakness bodes for no rate increase at the June 15th FOMC, BAC is struggling - along all other financials. Rising trend currently matches where the 50dma is, so a break <$13.70 would be significantly bearish.

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stay tuned!


10.01am.. Factory orders:  1.1%... above expect'

ISM service sector: 55.7... above expect'
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10.04am.. VIX sure is twitchy... gaps down at 10.00 precisely.... almost filling the opening gap higher...

Need to see >16.60 to confirm underlying market weakness


10.10am.. Eyes on the VIX... if it finally starts to show some upside power.. then equities headed sig' lower... to break the 2039/33 lows.


10.31am.. EIA report: net weekly 2.8 million barrel surplus.

Oil looks highly vulneralbe... target is USO.. $10.00...  and that would be equiv' to WTIC -10% from current levels.

Pre-Market Brief

Good morning. US equity futures are moderately lower, sp -11pts, we're set to open at 2052 - back to last Friday's low. USD is +0.1% in the DXY 93.00s. Metals are cooling, Gold -$7, with Silver -1.0%. Oil is +0.7% in the $43s, ahead of the latest EIA report.


sp'60min

Summary

So, overnight we've taken out the Friday low... which is useful. Next stop should be the 50dma around sp'2040/38... with VIX 18s.

Things only get interesting on a break of the two soft lows of 2039/33.. with a daily close in the 2020s. Until then, I can't have any initial confidence that 2111 is a key mid term high.

Best case for the bears in the current cycle is a 38% fib retrace (of the 1810-2111 wave) giving the sp'1990s. Any subsequent bounce would be at least 3%.

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Update from Mr C.


 
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Gold/Market chatter - Hunter with Pento



I sure don't agree with Pento's dollar doom outlook, but there are some other interesting comments worth consideration.
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Overnight action

Japan: CLOSED
China: -0.1% @ 2991
Germany: currently -0.7% @ 9853
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Have a good Wednesday
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8.16am.. ADP jobs: 156k, way below consensus... a major fail for the econ-bulls

sp-12pts... 2051.

The King of FIAT land is still King

It was a rather interesting day in currency land, with the USD swinging from an early low of DXY 91.88, but settling +0.3% @ DXY 92.93. Broadly, the USD remains stuck in a broad 9% range from the giant 100 threshold to the 91s.


USD, daily

USD, monthly

Summary

The US and world capital markets have seen some truly insane crazy times since 2006.

I remember the Schiff touting dollar doom in 2006/07.. for some very valid reasons (the widening trade deficit being a primary one).

For a brief while it seemed like he might be right about the USD - as he was about the US housing market and equities, yet the USD floored in April 2008 @ DXY 71.33.

As world capital markets became deeply distressed into autumn 2008, the USD soared, and despite a few periodic cool downs (late 2009, early 2011) the USD is not remotely looking weak.


Far from imploding, the USD remains King of FIAT land.

No doubt, a few of you out there will disagree... and I'd merely reflect back 'so.. you think the Euro, Yen, British Pound, or Yuan are going to appreciate long term vs the USD?'

My long term outlook for the USD remains entirely unchanged, seeking a monthly close back above the DXY 100 threshold, and from there.... onward to the 120s.
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Update on the German DAX, monthly

The loss of the 10K threshold should make the bull maniacs at least a little twitchy. Things don't get interesting until rising support in the 8900s is decisively broken under.


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Looking ahead

Wed' will see a wheel barrow of data: ADP jobs, intl' trade, prod'/costs, PMI/ISM serv' sector, factory orders, and the latest EIA report.
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Goodnight from London

Daily Index Cycle update

US equity indexes closed broadly weak, sp -18pts @ 2063 (intra low 2054). The two leaders - Trans/R2K, settled lower by -1.2% and -1.7% respectively. Near term outlook offers sp'2040/38 - where the 50dma is lurking. A daily close under the two soft lows of 2039/33, in the 2020s will not be easy.


sp'daily5

Dow

Summary

Suffice to add... the Friday gains were broadly negated by today's declines.

sp'500: next support, 50dma.. around 2040/38. Any daily close in the 2020s will open up a brief foray to the 1990s.. before next sig' bounce.

Dow: 17k remains the key support threshold, and that should comfortably hold in the current down cycle from 18167.

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a little more later...