January settles positive

US equity indexes settled January on a broadly positive note, sp +23pts (0.9%) at 2704. Nasdaq comp' +1.4%. The two leaders - Trans/R2K, settled -0.2% and +0.8% respectively. Near term outlook offers the 200dma in the sp'2740s.

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VIX'daily3

Summary

Equities opened in minor chop mode, but with the bears still powerless after the dovish Fed/Powell, the market resumed upward, and broke a new cycle high of sp'2708. The afternoon saw weak chop.

Volatility broke a new cycle low, settling in the 16s.

In AH... news of Trump with the Chinese vice-premier...

Even if a trade agreement is reached in Feb/March, whilst it would likely be a s/t boost to equity prices, it will do nothing of any significance to stall the global econ-cooling. Neither will further threats of QT adjustment or no more rate hikes from Print Central.
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The Fed capitulate

US equity indexes closed very significantly higher, sp +41pts (1.6%) at 2681. Nasdaq comp' +2.2%. Dow +1.8%. The two leaders - Trans/R2K, settled +1.1% and +1.0% respectively. the break >2675 offers a challenge of the 200dma in the 2740s.


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Summary

US equities opened broadly higher, and after a little weak-chop, re-built gains into the afternoon. With the press release from Print Central detailing a threat to adjust QT if necessary, along with effectively calling for no more rate hikes, the market soared. The break to new multi-week highs is very significant, and offers a straight run to the 200dma in the 2740s.

Volatility was naturally ground lower, with the VIX settling in the mid 17s.
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Pre-FOMC chop

US equity indexes closed a little mixed, sp -3pts (0.1%) at 2640. Nasdaq comp' -0.8%. The two leaders - Trans/R2K, settled +0.5% and -0.1% respectively. Near term outlook offers sig' downside, on a break under the 50dma.

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VIX'daily3

Summary

Little to add... for what was a day of mostly micro chop. Tomorrow should be far more dynamic.

Volatility saw a failed attempt to break back above the key 20 threshold, settling in the 19s. S/t outlook offers a break under the 50dma of sp'2610. If that is seen, volatility should spike upward to the 24/26 zone.
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Renewed downside

US equity indexes closed broadly weak, sp -20pts (0.8%) at 2643. Nasdaq comp' -1.1%. The two leaders - Trans/R2K, settled -0.2% and -0.6% respectively. Near term outlook offers a break under the 50dma, which would see prices spiral lower.


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VIX'daily3

Summary

US equities opened broadly weak, with the mainstream spooked by earnings from CAT and lowered revenue guidance from NVDA. We have a clear double top of sp'2675/72, whilst the Dow broke a marginal new cycle high last Friday. Today counts as day'1 down.

Volatility naturally jumped, with the VIX re-taking the key 20 threshold, but settling +8.3% at 18.87. S/t outlook offers far lower equity levels. Many individual stocks are suggestive of a fast run to the sp'2474/47 gap zone, and that might equate to VIX (briefly) around 30.
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Another plane making an escape from BREXIT chaos.

Sunshine for the bears... before the snow :)

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Weekend update - US equity indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +0.1% (Nasdaq comp', Dow), +0.02% (R2K), -0.2% (SPX, NYSE comp'), to -0.9% (Trans). Near term outlook offers cooling into end month/early February.


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

sp'500

The spx swung from a Wednesday low of 2612, to settle net lower for the week by -5pts (0.2%) at 2664. MACD (blue bar histogram) cycle ticked higher for a fourth week, as price momentum is resetting from oversold levels.

Best guess: renewed weakness into end month, which could easily stretch into the week of Feb' 4-8th. Supports 2612/2600, 2550, 2474/47. The Dec' low of 2346 looks tough to reach, but the m/t trend IS bearish, and equity bulls can't be confident until >2750 or so.
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Nasdaq comp'

The Nasdaq saw a fifth consecutive net weekly gain (the best run since March 2017), of +0.1% to 7164. Weekly price momentum is set to turn positive at next Monday's open. A failure around the zero threshold would be very bearish, and offer cooling to the 6500/400s.


Dow

The mighty Dow climbed for a fifth consecutive week, if only by 0.1% to 24737. It is notable the Dow broke a new multi-week high of 24860. The bulls need >25300 to get confident. Key supports: 23400s, 21712, 20400s, and psy'20K.


NYSE comp'

The master index saw a net weekly decline of -0.2% to 12127. Declining trend from Sept'2018 remains holding as key resistance.


R2K

The R2K saw a micro net weekly gain of +0.35pts (0.02%) to 1482. Equity bears need to break under last week's low of 1431 for things to turn interesting again.


Trans

The 'old leader' - Transports, saw a borderline significant net weekly decline of -0.9% to 9921.
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Summary

Three indexes were net higher for the week, with three net lower.

The Dow was the only index to break a new multi-week high.

YTD price performance:

The R2K is leading the way, currently +10.0%, Trans' +8.2%, with Nasdaq comp' +8.0%. The NYSE comp' +6.6%, SPX +6.3%, and the Dow +6.0%.
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Looking ahead 

Key earnings:
Mon': CAT
Tues': AAPL, AMD, PFE
Wed': BABA, BA, MCD, FB, MSFT, TSLA, PYPL, V, QCOM, WYNN, X
Thurs': AMZN, GE, UPS
Fri': XOM, CVX, MRK

A truck load of corp' earnings data

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M -
T - Intl' trade, Case-Shiller HPI, consumer con'
W - ADP jobs, Q4 GDP (first print), pending home sales, EIA Pet'

*FOMC announcement 2pm. No change in QT/rates can be expected. There will be a press conf' with Powell at 2.30pm, which will likely drag on around an hour.

T - Weekly jobs, pers' income/outlays, Chicago PMI
F - Monthly jobs, vehicle sales, PMI/ISM manu', construction, consumer sent'.

*as Thursday is end month, expect higher volume and more dynamic price action. It will very likely favour the equity bears.
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Settling the week positive

US equity indexes closed broadly higher, sp +22pts (0.8%) at 2664. The two leaders - Trans/R2K, settled +0.7% and +1.3% respectively. Near term outlook still offers a swing lower into end month.


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VIX'daily3

Summary

US equities opened moderately higher, and built gains into the early afternoon. The spx saw a high of 2672, just 3pts below last Friday's high. S/t price structure does make for a marginal double top.

Volatility was ground lower into the weekend, with the VIX settling in the mid 17s. S/t outlook for the remaining four days of January offers an equity swing lower, if only to test/challenge this week's low of sp'2612.
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Mr Market is arguably flying on vapour fumes

Next week will likely have less sunshine, rainbows, and unicorns

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Subdued Thursday

US equity indexes closed rather mixed, sp +3pts (0.1%) at 2642. Dow -0.1%. The two leaders - Trans/R2K, settled +1.1% and +0.7% respectively. Near term outlook offers weakness into the weekend.


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VIX'daily3

Summary

US equities opened in minor chop mode, and leaned fractionally higher into the afternoon. There was a moderate cooling wave to 2627, but then the market resumed micro chop mode... leaning back upward. It was unusually subdued for a Thursday.

Volatility settled -3.2% at 18.89. The s/t cyclical setup favours another spike in volatility. A push to VIX 25/26s is very viable within 1-2 days, along with a break <sp'2600. All it will take is just one or two pieces of 'spooky news'.
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Midweek swings

US equity indexes closed rather mixed, sp +5pts (0.2%) at 2638. Dow +0.7%. Nasdaq comp' +0.1%. The two leaders - Trans/R2K, settled -0.9% and -0.2% respectively. Near term outlook offers broad downside into end month.


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VIX'daily3

Summary

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Starting bearish

US equity indexes closed very significantly lower, sp -37pts (1.4%) at 2632. Nasdaq comp' -1.9%. The two leaders - Trans/R2K, settled -1.9% and -1.7% respectively. Near term outlook threatens a bounce, but sp'2675 should hold as a s/t high. Soft downside target 2550, with secondary 2470/40 zone.


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VIX'daily3

Summary

US equities opened on a moderately weak note, and steadily slid all the way into the late afternoon. Kudlow was wheeled out in the closing hour, to deny earlier reports that provisional US/China trade talks have been cancelled.

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Regardless of Larry, the daily close does give provisional confidence that last Friday was a s/t high, after a hyper ramp from 2346>2675.

Volatility naturally jumped, with the VIX settling +16.8% at 20.80. S/t outlook threatens some degree of Wednesday equity bounce, but the slightly broader trend into end month is bearish. It'd seem 2550 is pretty straight forward, with secondary of the 2470/40 gap zone. Whether the bears can just keep pushing from there... very difficult to say.

I will just add, an eventual test of the 200dma and the monthly 10MA - both in the mid/low 2700s appears a given at some point. I do understand why some believe we'll make it to 3K.. and far beyond. The econ-data would argue against that, including today's existing home sales.
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Weekend update - US equity indexes

It was a very bullish week for US equity indexes, with net weekly gains ranging from +4.0% (Trans),  +3.0% (Dow), +2.9% (SPX), +2.7% (Nasdaq comp'), +2.6% (NYSE comp'), to +2.4% (R2K). Near term outlook offers cooling into end month.


Lets take our regular look at six of the main US indexes (monthly candle charts)

sp'500

The spx climbed for a fourth consecutive week, breaking a new cycle high of 2675, settling +2.9% at 2670. More broadly, the spx is currently net higher for January by +163pts (6.5%). Despite the current gain, macd (blue bar histogram) cycle continues to tick lower, as price momentum is at levels last seen in Feb'2016. Note the key 10MA, a mere 65pts to the upside at 2735. Until that is cleared and held above, the m/t trend is arguably still bearish.


Nasdaq comp'

The Nasdaq comp' saw a very sig' net weekly gain of 2.7% to 7157. Price momentum is at levels last seen in Feb'2009, and is supportive of the notion that the cooling from Aug>Dec'2018 is not comparable to 2015/16 or the 2011 down wave. Note the 10MA at 7427, just 3.8% higher.


Dow

The mighty Dow saw a powerful net weekly gain of 3.0%, settling at 24706. Monthly price momentum continues to favour the bears. Note the key 10MA at 24937, just under 1% higher.


NYSE comp'

The master index saw a net weekly gain of 2.6% to 12151. Price momentum is at levels last seen in March 2016. It is far less supportive to the bearish case, and does threaten that late 2018 cooling was comparable to 2015/16 and 2011.


R2K

The second market leader saw a net weekly gain of 2.4% to 1482. Price momentum is around levels last seen in Feb'2016. Note the key 10MA at 1580, which is another 6.2% to the upside.


Trans

The 'old leader' - Transports, lead the way higher this week, with a very powerful gain of 4.0% to 10012. Price momentum is at levels last seen in March 2016. Note the key 10MA at 10547, some 5% higher.
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Summary

All six equity indexes saw very significant net weekly gains, lead higher by the Transports and Dow.

All six equity indexes are currently net higher for the year, lead by the R2K and Transports.

YTD price performance:

The R2K is currently leading the way, +9.9%, Trans +9.2%, with the Nasdaq comp' +7.9%. The NYSE comp' +6.8%, the SPX +6.5%, and the Dow +5.9%
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Looking ahead

It will be a short four day trading week.

Key earnings: IBM (Tues'), LVS, UTX, PG, F (Wed'), AAL, FCX, SBUX, INTC (Thurs') 

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M - CLOSED
T - Existing home sales
W - House price index, Richmond Fed'
T - Weekly jobs, leading indicators, EIA Pet' & NG reports
F - Durable goods, new home sales

*The world economic forum will be meeting at Davos in Switzerland, and that will span Jan'22-25. Notably, Trump, May, and Macron will not be attending. Details: https://www.weforum.org

**As there will be an FOMC Jan'29/30th, there will no fed officials on the loose, due to the usual blackout period. 
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Enjoy the three day holiday break.
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