Thursday 12 October 2017

Do you fear Friday the 13th?

It was not exactly the most exciting of days, with the sp'500 seeing a trading range of just 7.02pts. Tomorrow is Friday 13th, and at least some of you will have a case of Triskaidekaphobia. The daily price momentum cycles are increasingly swinging back toward the equity bears, and tomorrow might actually see some significant price action.


WTIC, daily


sp: As things are, it won't take much of a Friday fall to result in a net weekly decline. For a bearish engulfing candle, bears need <2520, and that looks out of range. Note the lower bollinger, currently at 2389. That could only possibly be seen if there is a North Korean atmospheric nuclear test, which would surely freak out the mainstream.

WTIC: inventory data was somewhat mixed today, and broadly, oil is mostly just churning around the psy' level of $50. What should be clear, the mid term bearish trend has concluded. An eventual run to the 54/55s looks viable before year end.

Looking ahead

Notable earnings: BAC and WFC.

Friday will see CPI, retail sales, busin' invent', consumer sent'.

There are a quartet of fed officials on the loose, all speaking at some conf' titled 'Are Rules Made to be Broken? Discretion and Monetary Policy'.

Normal service shall resume tomorrow

For you non subscribers out there, I hope you found today's postings at least marginally interesting, on what was a day of very minor chop.

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Goodnight from London

The next post on this page will likely appear Friday 6pm EST.

VIX and Index update

US equity indexes closed moderately mixed, sp -4pts at 2550. The two leaders - Trans/R2K, settled +0.6% and -0.1% respectively. VIX settled +0.6% at 9.91. Near term outlook offers basic target of the micro gap of 2540/37 before the weekend. The 2474/61 gap zone remains a technical necessity, before a more viable chance of the 2600s.





sp: a fractional new historic high of 2555.33, but settling fractionally lower. There are two micro gaps to be filled, but more far more importantly... that of 2474/61. No sustained price action <2460 seems viable for the remainder of the year, as more broadly, the 2600s look a given, as earnings are coming in just fine.

Dow: settling -0.1% at 22841. First support in the 22200s, where the 50dma will soon be lurking. Its arguable that the 22200s would equate to the sp'2474/61 zone.

Trans: a new historic high of 10049. S/t bearish with the main market, but it should be clear, the 11000s are just about viable into year end.


With equities seeing a day of relatively minor chop, the VIX remained broadly subdued, settling +0.6% at 9.91. Near term offers the 11/12s, with sp'2520s. On balance, it would seem sp'2474/61 would equate to VIX in the mid teens, although it will depend on how fast the decline is.

Looking ahead by 6pm EST

Closing Brief

US equity indexes closed moderately mixed, sp -4pts at 2550. The two leaders - Trans/R2K, settled +0.6% and -0.1% respectively. Near term outlook offers basic target of the micro gap of 2540/37 before the weekend. The 2474/61 gap zone remains a technical necessity, before a more viable chance of the 2600s.



closing hour action: leaning distinctly on the weaker side, breaking a new intraday low.

Despite some weakness into the close, with the sp'500 and the Transports breaking new historic highs, it was still a day for the equity bulls.

I will continue to drone on.... 2474/61 remains a 'technical necessity'... but I am broadly bullish, and my original year end target of 2683 remains just about within reach.

Here in London...

Have a good evening
more later on the VIX and Indexes by 6pm EST

3pm update - a little weak

US equities continue to lean - if only fractionally, on the weaker side. Overall price action is outright tedious. VIX remains broadly subdued, although a daily close in the 10s looks probable. Right now, even the sp'2520s should at least equate to VIX 11/12s.




Well, it continues to not be the most exciting of days. Equities will be inclined to lean weak into the close. Tomorrow is setting up to be at least somewhat interesting.

There are at least some dynamic individual movers though, and I'll focus on those...

notable weakness, GILD, daily

Gilead is just seeing some s/t weak chop/consolidation after massive gains since the summer. I am VERY bullish this stock. If it can clear $90, then its open air to around $110. Considering the current F' Pe is just 11, I could understand if some have a m/t target on this >150.

notable weakness, BABA, daily

Alibaba looks tired, after yesterday breaking a new historic high. S/t bearish to at least $175, but m/t bullish to 225/50 by late spring 2018.

notable weakness, DIS, daily

Disney continues to struggle, as the recent low of $96.20 looks set to fail. That'll see things spiral to the 94/93s. I know a few are seeking the mid/low $80s, but that seems a stretch within this broadly strong market. Earnings are due in early November, and from there, I'd look for a late year ramp to $105/110 zone, partly inspired by mainstream Star Wars hysteria.

Finally... strength in SNAP, daily

SNAP is sig' higher for a second day, but there is notable selling within what is key gap/IPO resistance of 16.50/17.00. Broadly, I see no reason to change, and deem this stock... loss making garbage.

back at the close... to wrap up the day.

2pm update - metals and miners

US equities remain fractionally mixed, leaning on the weaker side. Meanwhile, the precious metals are fractionally higher, Gold +$2, with Silver +0.2%. The gold miner ETF of GDX is currently u/c @ $23.80.

GLD daily

GDX daily


Gold/GLD: the bullish mid term trend from the key multi-year low of Dec'2015 remains intact. Since the rally from the July lows, Gold has again become stuck. Gold bugs need a decisive move >$1400 to have confidence. Copper remains indirectly suggestive that gold and silver will eventually catch up, as the trio do broadly trade together across the years.

GDX: much like gold, broadly choppy, and stuck firmly under the Feb' high of $25.71. The cautious will wait to chase until the $26s are seen, which would open up a fast run to the summer 2016 high in the $31s.

Equities: sp'60min

Price action remains very muted, and regardless of the close, with a new historic high (if only fractional) earlier, its a day for the bulls.

notable miner, SCCO, daily

Southern copper is pushing for a new historic intraday high and close. With copper seeing an Aug' close >$3.00, the miners followed. SCCO looks broadly set for $50. That view would only be dropped if copper <2.80.

1pm update - oil and energy

US equities remain in minor chop mode. Meanwhile, WTIC is currently -1.8% in the $50s. The energy sector ETF of XLE is currently net lower for the week by -0.2% in the upper $67s.

USO daily

XLE weekly


WTIC/USO: the mid term series of lower highs and lower lows ended last month. Ongoing price action is clustered around the $50 psy' level, and there is little reason why that might change in the near term.

XLE: decisively outside of the m/t bearish trend. S/t chop, but the Dec'2016 highs look set to be broken, not least if WTIC can eventually get to the 55/60 zone by spring 2018.

Equities: sp'60min

A fractional new historic high, but broadly... stuck. Another wave lower this afternoon is due, although 2540/37 looks out of range until tomorrow.

notable energy stock, RIG, daily

Along with the sector, Transocean recently broke the m/t downward trend. S/t bearish though, vulnerable to the 9.50/00 zone. APC would be a valid alternative, not least with the recently announced buy back program.

Meanwhile... Summers is on the loose...

.... slamming Trump's tax plan.

Note the 'book background', always a standard tactic to attempt to appear smart. Its quite effective actually, regardless of whatever nonsense is spouted.

12pm update - fractionally mixed

US equity indexes are fractionally mixed, with a short term double top in the sp'500 of 2555.23/24. VIX is still reflective of a market that won't even sustainably see moderate weakness. WTIC is -0.9% in the $50s, after a net inventory draw of -2.7 million barrels, a stark contrast to yesterday's API.




Suffice to add... micro price chop, as the market is able to just churn, rather than any sustained moderate weakness. The break in rising trend remains key.

notable weaknes, C, daily

Earnings were unquestionably fine, and bode well for the mid term. S/t though, we have a bearish engulfing candle, and it bodes very bearish into next week. First soft support, the 50dma, soon around the $70 threshold.

notable weakness, INTC, daily

S/t weak, but Intel's recent breakout into the $37s was massively important, and gives grander clarity that $50 is a valid target for the latter half of 2018. Due a bearish MACD cross tomorrow.

strength, X, daily

US Steel continues to swing around, currently sig' higher, but if the main market does eventually break sig' lower, then X will be dragged lower to the $23s.

time to check on the cheerleaders....

11am update - fractional weakness

US equities remain on the weaker side, but clearly, the equity bears look set to be unable to manage anything significant until early next week. VIX is reflective of a capital market with near zero concerns, not least about North Korea or a fracturing Spain. WTIC is -1.8% ahead of the EIA report.




Price action is pretty subdued, but so long as no new historic highs (>2555), this morning's break of rising trend from 2488 is important. Another wave lower to 2540/37 zone is possible before end of today, but even though wouldn't rate as anything significant.

notable weakness, APA, daily

Apache continues to struggle, not least after the Barclay's downgrade to $26, which is a very long way down. Unlike most energy stocks, APA is holding the m/t bearish trend from late 2016.

weakness, JD, daily

Broadly choppy, and still on track to tag the 200dma. Unlike BABA, JD is yet to prove itself with any sig' profits. They look set to do well in the m/t. M/t >50.. and the hyper bullish will be seeking double that. The cautious will lean to BABA.

time for an early lunch

10am update - opening weakness

US equities open moderately weak, as short term rising trend from the sp'2488 low has been broken. First soft target is the 2540/37 micro gap. VIX is moderately higher, but still only in the low 10s. WTIC -1.8% in the $50s, ahead of the EIA report.




*keep in mind, we've the EIA Pet' report at 11am. That will likely show a net build. If WTIC loses the $50 threshold, that'd certainly help drag energy stocks lower, and to some extent... the main market.

The lower hourly bollinger - sp'2545/44, will offer support this morning, with secondary of the micro gap of 2540/37. Any price action <2537 looks very difficult. VIX hourly chart is offering a sharper move from 11am onward.

notable stock, MU, daily

Micron' has increased the share offering by another $200million to $1.2bn. The board are clearly VERY confident, and their actions are from a position of strength. There is an earnings gap of 36/34, there is risk that would be at least partly filled if sp'2475/61. Regardless, mid term outlook is hyper bullish, soft target 45/50, and then $100.. which is absolutely viable in 2018. I'd suggest anyone look at NVDA from early 2016 onward, not that I'm calling MU the next NVDA.

Cramer highlighting Micron's F' PE is only in the 5s.

weakness, DIS, daily

Disney continues to struggle. The recent low of $96.20 looks extremely vulnerable, and once broken, will offer lower trend target of the 94/93s. Downgraded by Guggenheim to $105. Note today has seen a bearish MACD cross.

Meanwhile.. s/t bullish hysteria in SNAP

Bullish follow through after yesterday's Credit Suisse target of $20. Big resistance 16.50/17.00.The bolder bears will be shorting, with a stop around the IPO threshold. Cyclically on the high side.

Pre-Market Brief

Good morning. US equity futures are a little weak, sp -4pts, we're set to open at 2551. USD is +0.1% in the DXY 92.80s. The precious metals are fractionally positive, Gold +$2, with Silver +0.2%. WTIC is -1.4% in the $50s.




C' earnings were fine. EPS $1.42, like most other financials, giving a PE in the 12s. JPM results were also fine, with EPS of $1.76. Its notable that neither stock are significantly spiking on the news

Yesterday saw an hourly equity bullish MACD cross in the closing hour. A rollover, with moderate weakness is due today. The bigger daily cycles won't offer anything significant until after the weekend.

Its notable that ANY degree of opening weakness will break short term rising trend, that goes back to the sp'2488 low. That will open up the two micro gaps of 2540/37, and 2521/19. Clearly, the latter looks out of range today, unless there is some sporadic 'spooky news', which would include any Trump comments on North Korea.

re: VIX. We're clearly on the low side, and a push into the 11/12s is well overdue.

early movers

AAPL -0.2%, as price structure remains a bear flag
ABX +0.2%, with gold
AMD -0.4%, broadly choppy
APA -0.5% in the $41s. Barclays downgraded them to $26 yesterday.
BAC +0.1%, ahead of Friday earnings

BABA -0.4%.. but broadly super strong, headed for $200.
C +0.4% on earnings
CHK -0.5%, pressured via oil
CSCO -1.2%, s/t over-stretched
DIS -0.8%, s/t momentum is rather bearish indeed
F -1.1%, cooling after recent sig' gains

JPM -0.1% on earnings
JD +0.4%, but looks highly vulnerable to reversing today.
MU -0.7% in the $41.30s, with a notable earnings gap of 36/34.
TSLA -0.7%, broadly choppy though
TVIX +0.5%, with VIX +2.8% at 10.13
X -0.4% in the $25.10s, the 23s seem viable if sp'2474/61

overnight markets

Its very subdued out there, and fractionally mixed...

Japan: +0.3% at 20954
China: -0.1% at 3386
Germany: currently -0.1% at 12957
UK: currently +0.3% at 7557
Spain: currently -0.1% at 10271

Something I've just noticed appear on the schedule, Yellen is due to speak this Sunday (9am), at some conf' in Washington. Its not just her though, she'll be with the head of the PBOC, BoJ, and the vice-pres' of the ECB. That will merit serious attention, not least in terms of whether the other central banks are with her on the policy of QT that is beginning this month.

Have a good Thursday

back at 10am...