Saturday 30 June 2018

Weekend update - World equity markets

It was a very mixed month for world equity markets, with net monthly changes ranging from -8.0% (China) -5.2% (Brazil), -2.4% (Germany), -0.6% (USA), +1.7% (Spain), to +2.7% (Australia). Near term outlook is rather mixed.


Lets take our regular look at ten of the world equity markets

USA - Dow


The mighty Dow settled -144pts (0.6%) to 24271. This was fractionally below the key 10MA, the first such close since Feb'2016. Underlying macd (green bar histogram) ticked lower for a fifth consecutive month, and is set to turn negative at next Monday's July 2nd open.

It remains the case the econ-data and corp' earnings continue to come in broadly fine. Industrials are largely being held back on trade/tariff concerns, and for now, I'm very dismissive of this mainstream concern.

Can the Dow break a new historic high (>26616) by late summer/early autumn? Yes, and keep in mind, the Nasdaq comp' and R2K both broke new highs in June. The rest of the US indexes can be expected to follow... eventually.
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Germany – DAX


The economic powerhouse of the EU - Germany, saw the DAX fall for a second month, -298pts (2.4%) to 12306. Note the June settlement under the key 10MA, which leans bearish for July. Core rising support from the 2009 low will stand around 11700 in July. Any price action in the 11600s would merit alarm bells, and threaten powerful downside to core support of 8000.


Japan – Nikkei


The Japanese market settled +102pts (0.5%) to 22304. The June candle was spiky on the upper side, and its leans s/t bearish. Underlying macd is set for a bearish cross in July or August. Alarm bells if <20700.


China – Shanghai comp'


The Chinese market declined for the fourth of six months this year, with a net June decline of a very powerful -8.0% to 2847. There really isn't any support until the Feb'2016 low of 2638, and that is another 7.3% lower.


Brazil – Bovespa


The Brazilian equity market significantly declined for a second month, -3991pts (5.2%) to 72762. The June settlement is back under the key price threshold. MACD cycle will turn negative at the July 2nd open, and leans bearish for July. Next big supports are 65000, and then 55000.


Russia - RTSI


Russian equities continue to struggle this year, with the RTSI -8pts (0.8%) to 1154. There is big resistance at 1200, and until that is cleared, Russian equities can be seen as weak. MACD cycle is set to turn bearish at the July 2nd open.


France – CAC


French equities cooled for a second month, -74pts (1.4%) at 5323. MACD cycle settled the month fractionally negative, and leans bearish for early July. Next support is the big 5K threshold, and that is some 6% lower.


Spain – IBEX


Spanish equities remain choppy, with the IBEX settling +157pts (1.7%) to 9622. S/t outlook is for further chop. When the next major EU down turn occurs, Spain will be particularly hard hit. Further, the 'Catalonia situation' hasn't been resolved... its merely been temporarily quelled.


Australia – AORD


Australian equities climbed for a third month, +166pts (2.7%) to 6289. Outlook is bullish, with next target of the Nov'2007 historic high of 6873, which is 9.3% higher, and viable before year end. Higher commodity prices would really help this market.


Greece - Athex


The economic basket case of the EU - Greece, saw the Athex settle +1.7pts (0.2%) to 757. S/t outlook is bearish, as price momentum is set to turn outright bearish in early July
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Summary

Six markets were net lower for June, with four net higher.

China and Brazil are really struggling, with zero sign of a turn/floor, and have very significant technical 'open air' downside.

World leaders - USA and Germany, both saw settlements under their respective 10MAs, and it leans s/t bearish. For now, both are holding their m/t bullish trends.
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Looking ahead 

It will be a short 3.5 day trading week.

M -  PMI/ISM manu', construction
T - Vehicle sales, factory orders. *EARLY CLOSE 1pm EDT*
W - CLOSED
T - Weekly jobs, ADP jobs, PMI/ISM serv', EIA Pet' report, FOMC mins (2pm)
F - Monthly jobs, intl. trade.
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*the next post on this page will likely appear 5pm EDT on Monday.

Friday 29 June 2018

End month window dressing

US equity indexes closed a little mixed, sp +2pts (0.1%) at 2718. The two leaders - Trans/R2K, settled +0.3% and -0.1% respectively. VIX settled -4.5% at 16.09. Near term outlook offers Monday weakness, but the Thurs' low of 2691 looks pretty secure.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and it was arguably just a standard case of window dressing for end month/quarter/half. The closing hour was rather ugly, resulting in a black-fail candle. The s/t cyclical setup for Monday strongly favours the equity bears, although I don't see the Thursday low being taken out.

Volatility was mostly subdued, but climbed into the weekend, with the VIX settling in the low 16s.
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Thursday 28 June 2018

Another mixed day

US equity indexes closed moderately mixed, sp +16pts (0.6%) at 2716. The two leaders - Trans/R2K, settled -0.2% and +0.2% respectively. VIX settled -5.9% at 16.85. Near term outlook offers another swing lower, whether putting in a marginally higher low (>2691), or a marginally lower low to around 2671... m/t bullish from either.


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Summary

Another somewhat mixed day, with a morning low of sp'2691, but then clawing upward into late afternoon. The closing hour saw a new high of 2724, but there was a rather distinct rollover, and it leans bearish for early Friday. Volatility was naturally similarly mixed, with a high of 18.99, but settling in the upper 16s.
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Bonus chart: China, monthly


The Shanghai comp' cooled for the 12th day of 15, and is currently -10.0% at 2786. It remains technical open air to the Feb'2016 low of 2638.

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Wednesday 27 June 2018

Failed gains

US equity indexes closed broadly weak, sp -23pts (0.9%) at 2699. The two leaders - Trans/R2K, settled -1.4% and -1.7% respectively. VIX settled +12.5% at 17.91. Near term outlook offers secondary target of sp'2671 for Thursday, before finding a floor, and resuming broadly upward across the summer.


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Summary

US equities were moderately lower in pre-market, but news that the Trump admin might go easier on trade/tariffs via CFIUS, saw (almost) everything flip positive. The market opened a little choppy, and battled to 2746 around 10.40am. From there.... a full bearish reversal, with the sp' turning moderately lower by mid afternoon. The closing hour sure wasn't pretty, with some dynamic swings, and settling right at the low of 2699.

Volatility saw a morning floor of 14.76, but then rebounded, settling in the upper 17s. Near term outlook offers sp'2670s, which should equate to VIX around the key 20 threshold. Next week is a holiday week, and that will favour the equity bulls.
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Bonus chart: China, monthly


With just two trading days left of the month/Q2/H1, the Shanghai comp' just keeps on falling, currently -9.1% at 2813. It remains technical open air to the Feb' low of 2638. I have to wonder, are the communists leadership actually trying to punish the capitalists speculators?

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Tuesday 26 June 2018

Weak bounce

US equity indexes closed moderately mixed, sp +5.99pts (0.2%) at 2723.06. The two leaders - Trans/R2K, settled -0.4% and +0.6% respectively. VIX settled 8.1% at 15.92. Near term outlook offers secondary target of the sp'2670s before the weekend/monthly settlement.


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Summary

US equities opened a little higher, and saw a brief reversal to fractionally lower. The market clawed upward into mid afternoon. There was a rollover from 2732 to 2721, which really doesn't bode great for the Wednesday open.

Volatility was naturally in cooling mode, with the VIX settling in the upper 15s.

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Monday 25 June 2018

Market Fidelity

US equity indexes closed significantly lower, sp -37pts (1.4%) at 2717.  The two leaders - Trans/R2K, settled -2.3% and -1.6% respectively. VIX settled +25.8% at 17.33. Near term outlook offers secondary target of 2671, before resuming broadly upward.


sp'daily5



VIX'daily3



Summary

US equities opened moderately weak, once again spooked on trade/tariff concerns. With last week's low of sp'2743 taken out, it was technical open air to prime target of 2718. There was a micro bounce from 2718, but then another wave lower into the mid afternoon to 2698. The break <2700 is highly supportive we'll see secondary target of 2671 hit within days. 

Volatility naturally spiked, and exceeded beyond what seemed realistic. The VIX saw an intra high of 19.61, the highest level since April 25th, settling in the mid 17s.
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Bonus chart: China, monthly


With four trading days left of the month, the Shanghai comp' is -7.6% at 2859. Real ugly, and next support isn't until the Feb'2016 low of 2638.
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Westworld: 2x10: The Valley Beyond.
Westworld is one of the finest shows in recent years, raising issues of AI, and whether humanity has any real degree of free will. Intel and Nvidia will likely be part of the continued attempt to create a genuine AI. Who would run the park? Would it be anyone other than Disney? I'll merely add, I would choose a white hat.

yours, bullish Fidelity
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Saturday 23 June 2018

Weekend update - US equity indexes

It was a broadly bearish week for US equity indexes, with net weekly changes ranging from -2.7% (Trans), -2.0% (Dow), -0.9% (sp'500), -0.7% (nasdaq comp', nyse comp'), to +0.1% (R2K). Near term outlook offers further downside of 2-3%


Lets take our regular look at six of the main US indexes

sp'500


The sp' saw an intra week high of 2774, but settled -24pts (0.9%) at 2754, as last week's black-fail candle played out. Underlying macd (blue bar histogram) cycle has seen a rollover, and it bodes s/t bearish into end month/early July. Basic downside target is 2718, with secondary of 2671 - the partly unfilled gap from May 9th. More broadly, big target of 2950/3047 still looks on track for late summer/early autumn.


Nasdaq comp'


The Nasdaq saw a net weekly decline of -0.7%, but with a notable new historic high of 7806. S/t bearish with the broader market. The 8000s are clearly coming this summer. The only issue is whether the 9000s might sync with sp'3K.


Dow


The mighty Dow cooled for a second week, with a net weekly decline of a significant -2.0% to 24580. S/t bearish with the main market, as trade/tariff chatter is particularly impacting the international stocks, such as CAT and BA.


NYSE comp'


The master index cooled -0.7% to 12639. Price action since mid March has been rather tight, but leaning on the upward side. S/t bearish, with big support in the 12200s.


R2K


The second market leader - R2K, managed a fractional net weekly gain of +0.1% to 1685, with a new historic high of 1708. First support is around 1650.


Trans


The 'old leader' - Transports, saw a very significant net weekly decline of -2.7% to 10773. Higher energy prices look set to be a drag on the tranny across the summer. S/t bearish with first support of 10500.



Summary

A broadly bearish week, with five indexes lower, and one fractionally higher.

The Nasdaq comp' and R2K, broke new historic highs.

The Dow and Transports are struggling on trade/tariff chatter, and higher oil price concerns.

YTD price performance...


The Nasdaq continues to lead, currently net higher for 2018 by 11.4%, the R2K +9.8%, and the sp +3.0%. The Transports is +1.5%, Dow -0.5%, with the NYSE comp' -1.3% 
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Looking ahead

Key earnings: CCL (Mon'), LEN (Tue'), BBBY (Wed'), NKE (Thurs'), STZ (Fri')

M - New home sales
T - Case-Shiller HPI, consumer con', Richmond fed'
W - Durable goods orders, intl' trade, pending home sales, EIA report
T - Q1 GDP (third print), weekly jobs, stress test results part'2.
F - Pers' income/outlays, Chicago PMI, consumer sent'.

As Friday will be end month, Q2, and H1, I would look for increasingly dynamic and choppy price action into the weekend.
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*the next post on this page will likely appear 5pm EST on Monday.

Friday 22 June 2018

A mixed end to the week

US equity indexes closed a little mixed, sp +5pts (0.2%) at 2754. The two leaders - Trans/R2K, settled -0.5% and -0.2% respectively. VIX settled -5.9% at 13.77. Near term outlook offers sp'2779 on Monday, before another rollover, as 2718 remains due.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, then saw some chop, not helped as the US President was posting once more on Twitter. Equities battled upward into the afternoon, but did see some distinct weakness in the closing minutes.

Volatility was notably subdued, with the VIX settling the week in the 13s. Near term outlook offers VIX 16/17s, assuming sp'2718, whether next week, or early July.

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Thursday 21 June 2018

Typical Thursday

US equity indexes closed broadly weak, sp -17pts (0.6%) at 2749. The two leaders - Trans/R2K, settled -0.4% and -1.0% respectively. VIX settled 14.5% at 14.64. Near term outlook offers a bounce to 2779, before resuming lower to technical necessity of 2718 next week.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, and quickly unravelled to a morning floor of sp'2748. From there, upside to 2760, a cooling wave to 2749, and then resuming upward into late afternoon.

Volatility picked up, with the VIX seeing 15.18, the highest level since May 31st. There was some latter day cooling, with the VIX settling in the mid 14s. Near term outlook offers sp'2779, before another rollover. Prime target remains sp'2718, which will likely equate to VIX 16/17s.
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Bonus chart: China


It was another rough day for Chinese equities, settling -1.4% at 2875. Its a case of technical open air to the Feb' 2016 low of 2638, and that is another 8.2% lower.
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Wednesday 20 June 2018

Weak Wednesday bounce

US equity indexes closed broadly positive, sp +4pts (0.2%) at 2767. The two leaders - Trans/R2K, settled +0.1% and +0.8% respectively. VIX settled -4.2% at 12.79. Near term outlook offers technical necessity of sp'2718, which should equate to VIX 15/16s.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and clawed upward to an early afternoon high of 2774. Late afternoon saw a s/t cyclical rollover, with slight cooling. Its notable that the Nasdaq comp' and R2K broke new historic highs, and are a reminder of underlying m/t super strength in the US equity market.

Volatility was naturally subdued, with the VIX melting lower, and settling in the mid 12s.
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Bonus chart: China


The Chinese equity market also saw a weak Wednesday bounce, +0.3% to 2915. The price action so far this year is outright ugly.

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Tuesday 19 June 2018

We're not there yet

US equity indexes closed rather mixed, sp -11pts (0.4%) at 2762. The two leaders - Trans/R2K, settled -1.7% and +0.1% respectively. VIX settled +8.4% at 13.35. Near term outlook offers minimum technical necessity of sp'2718.


sp'daily5



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Summary

US equities opened broadly lower on further trade/tariff concerns. A morning low of 2743, and then bounce to 2765. Today's price action merely made for yet another lower high and lower low.

VIX saw the mid 14s, but settled in the mid 13s. Near term outlook offers sp'2718, which should equate to VIX 15/16s.

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