Tuesday, 22 January 2019

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.




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.

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.

Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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