Thursday 18 October 2018

Just another Thursday

US equity indexes closed very significantly lower, sp -40pts (1.6%) at 2768. Nasdaq comp' -2.1% at 7485. The two leaders - Trans/R2K, settled -2.6% and -1.9% respectively. VIX settled +15.3% at 20.06. Near term outlook offers chop into opex, but a marginally lower low (<2710) still appears probable early next week.




Thursdays do tend to favour the equity bears (for various reasons), and today's weakness was not exactly a surprise. US equities opened moderately lower, saw an early low of 2788, with an initial rally to 2806. Then comments from Draghi and Mnuchin gave the market the excuse, sending prices spiraling lower into the afternoon.

Volatility was naturally higher, with the VIX settling above the key 20 threshold. S/t outlook offers a marginally lower low (<sp'2710), although considering tomorrow is opex - which leans to chop, that is far more viable next Mon/Tuesday.

Bonus chart: China, monthly

With a Thursday decline of -2.9%, the Shanghai comp' is net lower for October by a rather severe -11.9%, having broken a new multi-year low of 2485. With soft psy'2500 lost, its mostly a case of 'empty air' to the giant 2K threshold. If that occurs.... implications for most China related stocks, not least BABA, JD, TCEHY, and BIDU.

Extra charts in AH (usually around 7pm EDT) @

Goodnight from London
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