2018 wraps up

US equity indexes concluded the year on a positive note, sp +21pts (0.8%) at 2506. Nasdaq comp' +0.8%. Dow +1.1%. The two leaders - Trans/R2K, both settled +0.7%. Near term outlook offers the sp'2625/50 zone, before the next big rollover.


sp'daily5

VIX'daily3

Summary

US equities opened on a positive note, helped by further Trump trade chatter. The novelty of such tweets is wearing thin on the market though, with the spx swinging from an early high of 2509 to turn fractionally negative at 2482. The afternoon saw renewed upside, settling at 2506. 

Volatility cooled for a fourth consecutive day, settling in the mid 25s. There is price-cluster and gap-support in the 21/20s... which would arguably sync with the sp'2625/50 zone.

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*there will be a post on New Years day, looking back on the original outlook for 2018. My outlook for 2019 will be posted this weekend.
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Goodnight from London.. and happy new year!
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Weekend update - US equity indexes

It was a very mixed week for US equity indexes, swinging from powerful declines, to settle with very significant net weekly gains, ranging from +4.0% (Nasdaq comp'), +3.5% (R2K), +2.9% (spx), +2.7% (Dow), +2.6% (Trans), to +2.3% (NYSE comp'). Near term outlook offers a continued bounce, but the m/t trend remains outright bearish.


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

sp'500

The spx broke a new multi-year low of 2346, which was notably from around the 200wma. For the week, a net gain of 69pts (2.9%) to settle at 2485. Despite the recovery, price momentum continues to weaken, and remains at levels not seen since the height of the financial crisis in Oct'2008.

Note the key 10MA at 2642. Its very possible the bulls could manage further upside to the low/mid 2600s, but that should prove to be massive resistance, before resuming lower. A H/S formation is highly suggestive that 2346 is NOT a key floor. A more natural floor would be the 2250/40s, with the 61.8% fib' retrace (of the 2016>2018 rally) at 2242.


Nasdaq comp'

The Nasdaq broke a new low for the year of 6190, but settled +251pts (4.0%) at 6584. The weekly settlement is effectively at the old support floor. Its entirely possible this is enough of a bounce, with further downside to giant psy'5k. The more bullish could seek s/t upside to around 7k, but even that won't be enough to dent the broader downward trend from the August high of 8133. 


Dow

The mighty Dow swung from a low of 21712, to settle +617pts (2.7%) to 23062. Much like the Nasdaq comp', the weekly settlement was around the old floor. Next big support is the 20400/000 zone.


NYSE comp'

The master index swung from 10723, to settle +254pts (2.3%) to 11290. Note the old floor of 12k, with next support of the 10300/000 zone.


R2K

The R2K broke a new cycle low of 1266, the lowest level since Nov'2016, but settled +45pts (3.5%) to 1337. Note the 200wma, which the R2K settled under for a second week. Whilst some in the mainstream are touting the 200wma as holding for the spx, the R2K, NYSE comp', and Trans have already broken and repeatedly settled under it. 


Trans

The 'old leader' - Transports, swung from 8636 (the lowest level since mid Nov'2016), but settled +234pts (2.6%) to 9109. Note the old floor/key price threshold of the 9700s. Its possible we'll bounce to around there, before resuming lower.
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Summary

All six US equity indexes saw significant net weekly gains.

All six US equity indexes broke new multi-year lows.

The Nasdaq and R2K are leading the way back upward, with the Trans and NYSE comp' lagging.

The NYSE comp', R2K, and Transports, have seen almost all of the post-election Trump gains eroded.

YTD price performance:

The Nasdaq comp' remains the most resilient index for the year, currently -4.6%. The Dow is -6.7%, with the spx -7.0%. The NYSE comp' is -11.8%, the R2K -12.9%, with the Transports -14.2%.
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Looking ahead

It will be a short four day trading week.

M - *normal closing at 4.00pm EST*
T - CLOSED
W - PMI manu'
T - Vehicle sales, ADP jobs, weekly jobs, ISM manu', construction
F - Monthly jobs, PMI serv', EIA Pet' & NG reports

*As Monday is New Years Eve, increased volume can be expected, especially in the late afternoon. The s/t cyclical setup favours the equity bears into year end, whilst the bigger daily cycle offers a positive start to 2019 on Wed' Jan'2nd.

**Fed chair Powell will be speaking Friday morning, with other panelists of Yellen and Bernanke. Mr Market will most definitely be listening. Its possible the event will be televised on the various financial networks.
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*the next post on this page will likely appear 5pm EST on New Years Eve.

Chop into the weekend

US equity indexes closed moderately mixed, sp -3pts (0.1%) at 2485. Nasdaq comp' +0.1%. Dow -0.3%. The two leaders - Trans/R2K, settled -0.5% and +0.5% respectively. Near term outlook offers an attempt to break back above the Feb' floor of 2532.

sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, saw a high of 2508, and then swung lower to 2472. That was all the bears could manage though, with another swing higher to 2520 in late afternoon.The closing hour saw a sig' swing lower, but settling just fractionally lower.

Volatility saw a morning peak in the 33s, but then melted lower, lower for a third consecutive day, settling in the mid 28s.

Goodnight from London
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Thursday retracement

US equity indexes closed on a positive note, sp +21pts (0.9%) at 2488 intra low 2397). Nasdaq comp' +0.4%. Dow +1.1%. The two leaders - Trans/R2K, settled +0.6% and +0.1% respectively. VIX settled -1.5% at 29.96. Near term outlook offers upside of another 1.5-2.0%.

sp'daily5

VIX'daily3

Summary

After the Wednesday hyper gains, a retracement of some degree was to be expected. Thursdays inherently tend to favour the bears, and equities opened sig' lower, and broadly cooled into the mid afternoon. There was a very natural floor around 2.30pm, and the market then hyper-ramped into the close. The daily close bodes for further upside on Friday, possibly stretching into early New Years Eve.

Volatility picked up, with the VIX seeing the 33s, but with the equity rebound, settling in the 29s. Further cooling to the 26/25s appears probable.
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Bonus chart: Germany

With just two trading days left of the year (I'd imagine the German market is open on Monday), the DAX is lower for a fifth consecutive month, currently -7.8% at 10381. Psy'10k support, and then 8k. Implications for rest of the European markets in 2019, and to some degree... the US.
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Goodnight from London
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Boxing day surge

US equity indexes closed very powerfully higher, sp +116pts (5.0%) at 2467. Nasdaq comp' +5.8%. Dow +5.0%. The two leaders - Trans/R2K, settled +5.4% and +5.0% respectively. Near term outlook offers further upside of 2-3%, before resuming lower to the 2250/40s.

sp'daily5

VIX'daily3

Summary

US equities opened moderate highly, built sig' gains, but then swung lower to fractionally negative, only to powerfully rebound into the afternoon. The daily close offers further upside, possibly as high as the old floor of 2532. Volatility did break a fractional new cycle high of 36.20, but reversed into melt mode, settling in the mid 30s.


Meanwhile... in Japan

Nikkei, daily

Nikkei, monthly

I didn't highlight the Japanese market in the most recent weekend post for no good reason. Christmas day saw a fierce decline of -5.0%, and whilst Boxing day saw a borderline significant rebound of +0.9% to 19327, the break of l/t trend is decisive. The Nikkei looks set for 12k in 2019/early 2020.

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Goodnight from London
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Merry Christmas

Merry Christmas to my readers, twitter followers, and subscribers across the world...

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Christmas Eve Sunset. Another day closer to summer 2019 :)

Christmas night moon

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*the next scheduled post is Wednesday Dec'26th at 5pm EST. 

PPT activated

US equity indexes closed powerfully lower, sp -65pts (2.7%) at 2351. Nasdaq comp' -2.2%. Dow -2.9%. The two leaders - Trans/R2K, settled -2.7% and -1.9% respectively. Near term outlook offers major support starting at  2350/40s, with secondary of 2250/40s. A major multi-week bounce to the old floor of 2532 will then be due.

sp'daily5

VIX'daily3

Summary

US equities opened weak, and quickly spiralled to very significant declines, breaking a new low for the year of sp'2367. There was a powerful morning swing to sp'2410, but then the US President decided to tweet...

That really roiled the mainstream, with equities swinging back lower, and breaking a new intraday low into the early 1pm close.

Volatility naturally broke a new cycle high, settling in the low 36s. The 40/50s appear viable (if not probable) before the weekend.


PPT Activated

Sunday evening saw US Treasury Secretary Mnuchin announce on Twitter he had been calling various bank CEOs, and that he was arranging a Monday meeting of the President's working group on financial markets. This is better known as the Plunge Protection Team... the infamous PPT.

Whilst the mainstream don't even like to use the acronym PPT, the PPT is indeed real, and is effectively tasked with ensuring stability in the US capital markets. No doubt, a key part of this is propping up equity prices.

Whether you believe the Fed (or its partners - the 'primary dealers') are directly or indirectly pumping up the market (most viable via index ETFs or overnight ES futures), doesn't really matter. What does matter is that its recognise that 'they' are very much already scared.

It only took the sp'2400s for them to start freaking out. My grander target for 2019/20 are the sp'1500s. What 'magical' monetary easing schemes will Print Central initiate by that level? We've seen Govt' bonds and MBS in the precious cycle. Next due are corp' bonds, then index ETFs, and finally... individual stocks, as the BoJ and a number of other central banks are already doing.

2018 is ending on a wildly bearish note, with 2019 set to be a fiercely bearish year. There will be very powerful bounces... but they are to be seen as such.
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Christmas Eve

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Goodnight from London
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Weekend update - US equity indexes

It was a severely bearish week for US equity indexes, with net weekly declines ranging from -8.4% (Nasdaq comp', R2K) , -7.0% (sp'500), -6.9% (Dow), -6.7% (Trans), to -6.1% (NYSE comp'). The m/t outlook is bearish, with all bounces to be seen as such.


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

sp'500

The spx fell for a third consecutive week, the 9th week of 13, settling -183pts (7.0%). Underlying macd (blue bar histogram) cycle is at the lowest level since the height of the financial crisis in Oct'2008.

Price structure is a valid H/S formation, and however you might draw it, the loss of the Feb' low of 2532 has taken out the floor/neck-line. The minimum downside target is the 2300/250 zone.

Considering price action/structure in other world equity markets, and the recent break in the US bond market, a grander target of the sp'1500s appears on the menu in latter half of 2019/early 2020. That target will remain valid so long as no monthly close above the key monthly 10MA.
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Nasdaq comp'

The Nasdaq (along with the R2K) lead the way lower this week, with a net weekly decline of a very severe -577pts (8.4%) to 6332. The loss of the Feb' low of 6630 is decisive, and offers downside to giant psy'5K.


Dow

The mighty Dow fell for the 9th week of 13, imploding by -1655pts (6.9%) to 22445. The break of the April low is decisive, and offers min' target of 21k, with secondary support of 20400/20000. Grander target for late 2019/early 2020 would be around 14k.


NYSE comp'

The NYSE comp' was the most resilient index this week, but still settling lower by a severe -6.1% to 11036. Next support is around 10K. Its notable that the NYSE was the only index that never made a new historic high in late summer. Instead, a lower high, rolling over, and the first index to break the Feb' lows.


R2K

The R2K imploded by a very severe -118pts (8.4%) to 1292. Next support is not until around the 1150s... back to the Nov'2016 'Trump election' breakout. Indeed, the US equity market is set to see the entirety of the Trump gains erased.


Trans

The 'old leader' - Trans, fell for a third consecutive week, settling -693pts (6.7%) to 8874. Next support is another 10% lower to around 8k... back to the Nov'2016 election breakout level.
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Summary

All six US equity indexes saw severe net weekly declines, having fallen for a third consecutive week.

Weekly price momentum is at levels not seen since Oct'2008

YTD price performance:

The Nasdaq comp' is the most resilient, but powerfully lower for the year, -8.3%, The Dow is -9.2%, with the spx -9.6%. The NYSE comp' is -13.8%, the R2K is -15.8%, and the Trans -16.4%.
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Looking ahead 

It will be a short 3.5 trading day week. There are just 4.5 trading days left of the year.

M - Christmas Eve: EARLY CLOSING at 1pm EST
T - Christmas Day: CLOSED
W - Case-Shiller HPI, Richmond Fed
T - Weekly jobs, FHFA house price index, new home sales, consumer con', EIA Pet' & NG
F - Intl' trade, pending home sales 
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A Santa rally?

The Santa rally period begins next Monday, and stretches to Wed' Jan'3rd.
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Final note

I have especially endeavoured to highlight other world markets in recent months, which have been increasingly warning of trouble. I could list the usual ten, but I don't have the time. I'll merely highlight one...

Japan, monthly

The Nikkei is in the early phase of a massive multi-month down wave. It fractionally broke l/t rising trend in October. November saw a weak bounce, and December is now decisively under key price threshold of 21k.

If you believe the world economy will weaken into/across 2019/20, its not a stretch to see the Nikkei being cut in half to key price threshold of 12k. The US indexes could be expected to be similar in style, with the sp'1500s and Dow 14k. How the Fed, and the US President react and deal with that situation, will be truly entertaining to see.
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Have a good weekend
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*the next post on this page will likely appear 2pm EST on Monday Dec'24th

Spiraling into the weekend

US equity indexes closed powerfully lower, sp -50pts (2.1%) at 2416. Nasdaq comp' -3.0%.  The two leaders - Trans/R2K, settled -1.7% and -2.5% respectively. Regardless of any sporadic bounces, the sp'2300/250 zone is on track, and will have far grander implications for 2019.

sp'daily5

VIX'daily3

Summary

US equities opened in chop mode, leaning on the upward side. Williams of the Fed was wheeled out to CNBC in the 10am hour, spewed some fedspeak, and the market jumped to sp'2504, only to then fully reverse into midday.

Wheeled out from Print Central to pump the market

Indeed, traders should be well aware that the lower we go, the more inclined the fed will be to issue threats of suspending QT... or even cutting rates. Such threats will lead to powerful bounces, but they won't last long, as this morning showed.

The market spiraled in the 12pm hour, but things turned really ugly with Navarro comments in late afternoon, that saw the spx break a new low for the year of 2408.

Navarro.. the bearish gift, that keeps on giving the whole year

Volatility swung from the 25s to the 31s, and settling +6.1% at 30.11. Considering equity price action, the VIX is still rather low.
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Winter solstice sunshine

A shrouded... almost full moon

A half century ago...


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Goodnight from London
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Powell breaks the equity market

US equity indexes closed significantly lower, sp -39pts (1.5%) at 2506. Nasdaq comp' -2.2%. The two leaders - Trans/R2K, settled -3.1% and -2.0% respectively. VIX settled u/c at 25.58. Near term outlook offers a bounce, but ALL bounces are to be seen as such.


sp'daily5

VIX'daily3

Summary

US equities began the day in minor chop mode, but built significant gains into the early afternoon.

The FOMC announcement saw the Fed raise rates for the fourth time this year, and the ninth of the cycle, +25bps to a new target range of 2.25-2.50%.

Each additional word from Powell caused equity carnage

Equities saw an initial spike to 2585, but then imploded to 2533, and recovering to 2565. Once Powell start speaking at 2.30pm though, it all fell to pieces, falling to 2488, and settling at 2506. The daily close was decisively under the Feb' low, and offers further downside to the 2300/250 zone within the near term.

Volatility saw some swings, but relative to equities, those swings were relatively moderate. The VIX unusually settled exactly flat. A burst >30 is long overdue.
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Bonus chart: Japan, monthly

The Nikkei is currently -6.1% at 20987. A monthly settlement <21k would be decisive, and offer the low 19000s. Grander support of 12k.
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Open day

Thursday Dec'20th will be open day at permabeardoomster.com
For you non-subscribers out there, it will be a good opportunity to follow me across the day.
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Winter Solstice this Friday

Full moon this Saturday

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Goodnight from London
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