Tuesday 14 June 2016

A third day for the bears

US equity indexes closed broadly lower for a third consecutive day, sp -17pts @ 2079. The two leaders - Trans/R2K, both settled lower by around -1.1%. The VIX settled +23.1% @ 20.97. Near term outlook threatens a post FOMC (unsustainable) bounce to the gap zone of 2109/15, before far more dynamic downside to test the critical 2025 low.




Another day for the equity bears... with the sp'500 having decisively broken the double low of 2085. There is soft gap support in the 2078/76 zone.

It is highly notable that the VIX managed a fifth consecutive net daily gain, the best run since Aug'2015.

Considering that we have already seen VIX 20s - with only the sp'2070s. A test of the sp'2025 low would likely equate to VIX in 28/32 zone.

Broader cycles continue to turn


A second blue candle... with a clear break of rising trend. We have a clear divergent lower MACD cycle high.. and we're set to see a bearish cross by end month. In theory, the most powerful downside will begin June 27-30th... with VIX 30s.. maybe 40s - if UK exit the EU... which now seems probable.

Things are getting interesting. 

Goodnight from London