Wednesday, 18 April 2018

Looking ahead

It was a day of mostly minor chop in equity land, with the sp' settling +0.1% at 2708. Meanwhile, oil remains very strong, breaking a new multi-year high of $68.72.


WTIC weekly


sp: as things are, the sp' is comfortably on track for a second consecutive net weekly gain. It could certainly be argued price structure since late January is a giant bullish pennant, offering new historic highs this summer/autumn. Original big target of 2950/3047 would still be the more natural level at which this market might max out, whether you start from early 2016... or even back to March 2009.

WTIC: a net daily gain of 2.9% to $68.47, as a more natural s/t high would be from psy'70. Jim Iuorio is seeking a near term top, with a downside target of the $63s, and his view is always to be considered.

Looking ahead

Thursday will see the usual week jobs, phil' fed, and leading indicators.

Key earnings: BK, BX, and NVS.

Earnings continue to come in fine...

Its merits some reflection that the earnings beats are on analysts estimates that have generally been recently raised . AXP is fine, but far superior alts are MA and V.  Alcoa is warning of a global aluminum deficit for 2018, and it'll perhaps be useful to check on aluminum prices at least occasionally this summer.

Normal service to resume

Today sure didn't go as planned. I woke up, boot up my desktop, only to find my private server was offline (malicious attack). So, it was back to my old home here. Tomorrow I'll be back at

For many of you new people, if you liked what you read today, and that most certainly includes my work @, then subscribe to me.

For details:

A taste of summer
Goodnight from London
*the next post on this page will appear Thurs', around 6pm EST.

VIX and Index update

US equity indexes closed a little mixed, sp +2pts at 2708. The two leaders - Trans/R2K, settled +1.7% and +0.2% respectively. VIX settled +2.3% at 15.60. Near term outlook offers Thursday cooling, but the market looks comfortably on track for a second consecutive net weekly gain.


Nasdaq comp'


sp: a daily of minor chop. Note the settling black-fail doji candle, which does warn of s/t bullish exhaustion. Thursday's do tend to favour the equity bears. Soft downside would be the lower hourly bollinger, which will be in the 2680/70s tomorrow.

nas: a day of minor chop for tech, with the Nasdaq comp' settling +0.2% at 7295, notably holding above the 50dma. Thursday does threaten some cooling, soft support 7200, with secondary at 7k.


With equities seeing a touch of cooling into the close, the VIX managed a net daily gain (intra high 16.90), settling +2.3% at 15.60. There is a notable upside gap of 19/20, which would surely equate to sig' downside in equities of 1.5-2.0%. Its something to keep in mind across the next few days.

Looking ahead by 6pm EST

Closing Brief

US equity indexes closed a little mixed, sp +2pts at 2708. The two leaders - Trans/R2K, settled +1.7% and +0.2% respectively. Near term outlook offers Thursday cooling, but the market looks comfortably on track for a second consecutive net weekly gain.



closing hour action: further micro chop, as market volume remains very light indeed. leaning fractionally weak into the close.

*awaiting AXP earnings, which should be fine, but like many financials... it looks s/t vulnerable. 
Also due: Alcoa (AA)

... and that concludes Wednesday. A day of mostly minor chop. We're seeing some rather quirky post earnings reactions in some stocks, but the underlying issue... earnings are coming in broadly superb.

notable stock: BAC, daily

Note last Friday's bearish engulfing candle, and then two consecutive black-fail candles. Today's weakness shouldn't be much of a surprise, as many of the financials are struggling despite earnings continuing to come in fine. If BAC sees a daily close <29.00, the 200dma will be tested in the mid/upper $27s. Due a bearish macd cross, and indirectly suggests the main market will see a red Thursday

Here in my part of world...

A rather perfect end to the day. A touch of summer warmth, 74f, and the next few days should be equally fine. Have a good evening.

more later on the VIX and Indexes by 6pm EST

3pm update - awaiting AXP

US equities remain a little choppy, with the s/t cyclical setup leaning weak into the close. Due in AH, earnings from AXP, which should help to keep everyone awake... not least yours truly. VIX is battling to avoid a seventh consecutive net daily decline. Oil has seen a renewed push upward, +3.1% in the mid $68s.




The hourly equity cycle is offering a bearish macd cross into the close, which does lean to the equity bears. Note the lower hourly bollinger at 2666, and that will offer big support in the 2680/70s tomorrow.

notable stock: AXP ,daily

American Express has earnings in AH, and they should be good, but far superior alts are MA and V, whose profit margins are massively better by 5-6x.

notable strength: MU, daily

After an early morning smack down (for no good reason, other than LRCX weakness), Micron is set for sig' net daily gains.

weakness, IBM, daily

An ugly post earnings sell down in IBM, which we've seen in a very select set of stocks so far this earnings season. Underlying valuation remains cheap, but INTC, CSCO, MU... far superior.

strength, BABA, daily

As there is increasing mainstream attention in this one. Notable call activity in the May 195/200s today.

back at the close...

2pm update - metals and miners

US equities remain a little choppy, and will be cyclically inclined to cool in late afternoon. Meanwhile, the precious metals are broadly higher, Gold +$2, with Silver +2.5%. The miner ETF of GDX is currently +0.8% in the $23.10s.

GLD daily

SLV, daily

GDX daily


Gold/GLD: gold is seeing minor chop, hovering around the soft magnet of $1350. Broadly, its all chop since early 2017. An eventual bullish breakout above the decisive $1400 threshold looks increasingly due. From there, target would be 2400/2500... which is an awful long way up. If correct, monstrous implications for the related miners.

Silver/SLV: unusually, silver is catching the real attention today. We've seen a break >16.90 (as highlighted by Jim Iuorio yesterday), and its open air to the Jan' high of $17.70. 

GDX: the miners are having a reasonable day, more helped via copper/silver, than gold. Broader price action remains choppy from early 2017. Things turn decisive if Gold >1400.  Best miners... NEM, ABX.

notable miner: ABX, daily

Despite the recent run, Barrick Gold remains m/t bearish. That only changes >17s.

Equities: sp'60min

Price action remains choppy, and cyclically, we'll be inclined to cool into the close. Minor net daily declines should not be a surprise, and (in theory) that weakness really should carry across into Thursday.

time for some sun...  back at 3pm

1pm update - oil and energy

US equities remain a little choppy, and due a cooling wave. Meanwhile, WTIC is currently +1.9% in the $67s (intra high $68.44). The energy sector ETF of XLE is currently net higher for the week by 3.1% in the $73.60s.

USO daily

XLE weekly


WTIC/USO: the post Syrian attack cooling sure was brief and minor. We've already seen a push into the $68s. Its effectively open air to psy'70. There will be huge price cluster resistance within 70/75.

*Jim Iuorio notes he is looking for a topping pattern, and looking to sell... with a buy target of $63s.

XLE: energy stocks are naturally being helped via some pretty significant upside in oil. XLE looks set to challenge and exceed the Jan' high. I favour the quartet of APC, PSX, PBR, and LNG. More speculative; MRO, RIG, CNX, and CHK.

notable energy stock: RIG, daily

Transocean is well on the way to soft target of the $13s. Things really only get interesting >16.66. The cautious will leave this one alone.

Lunchtime trade...

Devon isn't one of the energy stocks I generally highlight, but its a fine company. I really like this trade, not least as there is plenty of time on the options clock. FPE 14s. Y 1.0%. NM 6.4%. Earnings May'1st.

Equities: sp'60min

Price action remains minor chop. Cyclically, we'll be inclined to cool this afternoon. The fed beige book due at 2pm might be an excuse.

12pm update - the chop continues

US equity indexes remain a little choppy, still leaning on the positive side, as earnings are coming in broadly superb. VIX is similarly choppy, but yesterday's low of 14.57 looks intact for a few days. Oil is helping prop up the market, currently +2% in the low $68s... as psy'70 is indeed very close.




Little to add, as the chop continues. Cyclically, we're s/t over-stretched, and due some cooling to the lower hourly bollinger, currently at 2651, but rising each hour.

notable weakness, AMAT, daily

As LRCX has tainted most of the sector this morning, but Micron is now sig' higher....

MU, daily

Roughly.. a 6% swing, washing out the weaker bulls. Big target remains 70/75, unless a takeover arrives first!

notable strength, X, daily

The bear flag is indeed fully negated. Earnings are due next Thurs' in AH, and should come in good, with a very positive outlook. FPE 7s... cheap.

time to check on the cheerleaders...

11am update - morning chop

US equity indexes are in minor chop mode. The s/t cyclical setup favours the equity bears, but the clock is ticking, and max' downside is less with each hour. VIX remains elevated, a sporadic jump to the 19/20s remains a s/t threat.




Price action is minor chop, and that is how it will likely be for much of today. The s/t cyclical setup does lean to the bears, but even the 2650s look a stretch by late Thursday.

notable ETF, SLV, daily

Note today's big jump above resistance of the 200/50dma. Options >11000 April'20th $16 calls. Those expire next week of course, but its just another sign that the big money are increasingly interested in the metals/miners.

notable weakness, TWTR, daily

Just a retrace of yesterday's powerful gain. Soft target are the 38/39s.

notable stock: MU, daily

The buyers have already appeared in the $50.50s

time for an early lunch...

yours... in the land of sunshine and 75f

10am update - opening shaky gains

US equity indexes open moderately higher, as earnings continue to come in above (recently raised) estimates. However, the gains are pretty shaky, with some of the main indexes having already turned fractionally lower. VIX opens higher, as there remains a key gap within 19/20. Oil is +2%, breaking a new multi-year high in the $68s.




Opening gains, but with the hourly RSI having reached 70, we're over-stretched, and in theory, we should close net lower. Long day ahead...

notable weakness, LRCX, daily

Lam Research earnings were unquestionably fine, but the market has whacked this one lower for no good reason. S/t bearish, but m/t bullish, as nothing has fundamentally changed.

... and that is causing problems for... MU, daily

Micron is still semi-tainted from the UBS call, as there are still mainstream cyclical concerns. Next earnings are not until mid June. Major support at psy'50.00


notable strength, FCX, daily

With copper higher by almost 2%, the related miners are catching a bid. Soft target remain the 24/25s. Superior alt: SCCO

weakness, IBM, daily

Earnings were broadly fine, but it seems IBM is playing games with accounting, specifically in terms of currency adjustments.

Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +9pts, we're set to open at 2715. USD is u/c in the DXY 89.20s. The precious metals are leaning positive, Gold +$3, with Silver +1.3%. WTIC is +1.5% in the $67s.




*server issues (sites are being migrated, how nice of my webhost not to pre-warn me), so, lets just make this an open day, and I'll likely post everything here today.

Yesterday saw broad gains, with the sp' notably settling above the 50dma in the low 2700s.Today is set to break a new multi-week high. Cyclically, we're really over-stretched, and a cooling wave is increasingly probable. Note the lower hourly bollinger at 2644. At best, the bears might manage the 2650/40s before the weekend, but I'd acknowledge that looks a stretch.

Earnings are clearly continuing to come in broadly superb, but we're seeing sporadic instances where certain stocks are still being smacked lower, not least IBM and LRCX.


early movers
ABX +0.5%, rising metals
AMAT -2.8%, dragged lower by LRCX
AMD +1.0%, but still broadly choppy
AMZN +1.0%, above the 50dma
BABA +0.3%
BAC +0.4%
CAT +0.7%, main market strength (mms)
CSX +5.5%, good earnings
EBAY +5.3%, as MS upgrade from 36s to $58
FCX +2.2%, with copper +1.8% to $3.13
GDX +0.5%, rising metals
GE +0.6%, speculative buying ahead of earnings
IBM -5.4% in the $152s, earnings were broadly fine
INTC +0.4% in the $53s, powerfully strong
LRCX -4.7% in the $202s, earnings were fine though
MRO +1.2%, higher oil

MS +2.5% in the $54s, further good earnings...

In particular, rev' was very significantly higher by 13.7% to $11.08bn, as the financials are doing better via higher rates and sustained higher market volatility.

MU -1.0%, dragged lower by Lam Research
RIG +1.0%, with oil
SQ +1.0%, mms
TEVA +1.9%, baby bull flag possibly confirmed
TSLA +2.1%, broadly choppy
TVIX -0.3%, with VIX -1.3% at 15.05
TWTR +0.8% in the $32s, soft target 38/39s
UAL +3.2%, good earnings
VALE +2.1%
X +0.1%, still struggling relative to main market


overnight markets

Most markets are leaning on the positive side, even China!

Japan: +1.4% at 22158
China: +0.8% at 3091
Germany: currently u/c at 12585
UK: currently +0.9% at 7289

Have a good Wednesday