Wednesday reversal

US equity indexes closed broadly higher, sp +30pts at 2644 (intra low 2573). The two leaders - Trans/R2K, settled -0.1% and +1.3% respectively. VIX settled -4.9% at 20.06. Near term outlook offers Thursday weakness, but after today's reversal, the Monday low of 2553 arguably is just a marginally higher low - relative to Feb'9th.


sp'daily5

VIX'daily3

Summary

US equities opened significantly lower, as the mainstream was spooked by Chinese trade tariff news. However, there was a reversal almost immediately from sp'2573. By late afternoon, most indexes had built rather significant gains.

It was a mixed day for the VIX, opening in the mid 24s, but settling moderately lower, just above the key 20 threshold.

Unless we see VIX >26s, equity bears should be largely resigned that the Monday low of sp'2553 is to be treated as a marginally higher low - relative to Feb'9th. That sure doesn't mean Thurs/Friday can't see some sig' downside, but this morning's low does look pretty secure.
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Goodnight from London
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