Tuesday 22 November 2016

A quartet of new historic highs

US equity indexes closed moderately higher, sp +16pts @ 2198. The two leaders - Trans/R2K, both settled higher by around 0.5%. VIX settled -3.3% @ 12.42. Near term outlook offers threat of a retrace to the 50dma in the sp'2150s, but broadly, the US market is unquestionably super strong.




The week began on a moderately bullish note, but that was still more than enough to achieve no less than four new historic highs in the Dow, sp'500, R2K, and Nasdaq comp'. That just leaves the NYSE comp' and Transports, which will surely follow by early spring 2017.

VIX remains crushed, unable to even hold the 13s. The key 20 threshold looks out of range until at least mid December. It is highly arguable that a second fed rate rise (Dec'14th) is FULLY priced in. Assuming that is the case, its difficult to see VIX break >20 for the remainder of the year.

Sure, there will be equity retraces into year end - especially for the usual tax reasons, but broadly, the US market is unquestionably strong.

Brief update on WTIC oil, monthly2

WTIC has swung from the $42s to the $48s. Broader upside to the upper bollinger around the $60 threshold remains a valid target for spring 2017. If that occurs, it'll really help kick the energy sector higher, and drag the main market with it.

Goodnight from London