Tuesday 27 June 2017

Almost halfway

US equity indexes closed moderately mixed, sp +0.7pts at 2439 (intra high 2450). The two leaders - Trans/R2K, settled higher by 0.6% and 0.1% respectively. VIX settled -1.2% at 9.90. Near term outlook offers 2420/15 zone. More broadly, the 2500s still appear viable as early as late July, not least if Q2 GDP comes in >2.5%.




The week began on a moderately positive note, but there was a rather fierce little reversal in early morning, with most indexes turning red. With WTIC swinging upward from -0.7% to +0.7% in the $43s, equities saw a little bounce into the afternoon. Again, there was something of closing hour weakness.. which should carry into Tuesday. Further, the black-fail candle is a warning of trouble.

Market volatility remains broadly subdued, with the VIX settling in the upper 9s. Near term offers the 12/13s, if sp'2420/15, which really isn't that bold a target.

Half of 2017

This Friday will be the end of Q2 and indeed, the first half of 2017. Regardless of how the rest of this week trades, so far, its been a year for the equity bulls, with new historic highs in all six of the indexes I regularly highlight.

However, even more notable than the equity gains are how commodities have been relentlessly weak.

CRB, monthly, 8yr

At the current rate, we'll see the CRB at the Jan'2016 lows within 3-4 months. Does the fed notice... or remotely care? At some point this summer/autumn, commodities are going to see another upswing, and that will be bullish for energy and most resource/mining stocks, which of course will help kick the main market upward.

Goodnight from London