US equities start the last week of May with another set of new historic highs. The R2K/Nasdaq are similarly pushing higher. Precious metals are weak, with Gold -$16. Any break <GLD 122 ( a mere $8 lower), will open the door to another $70 lower in spot gold prices.
sp'weekly8
GLD, daily
Summary
*yes yes, the VIX is higher, but 3% of 11 is NOTHING.
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Suffice to say, the upward push continues.
Candle'7 ..green, and upper bol' is offering 1920s tomorrow.
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I realise some might be shorting this, but considering the underlying momentum, this seems overly risky.
R2K is suggestive of 1170/80..which would likely equate to sp'1940/60 zone...minimum.
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Notable strength: drillers, DO, RIG, SDRL, not that I am involved with those anymore.
Good morning. Futures are set to open moderately higher, sp +6pts to 1906, with new historic highs for the Dow, SP, and Transports,. The R2K and Nasdaq are set to solidify their recovery rallies. Metals are weak, Gold -$10. VIX will likely open in the 10s.
sp'weekly8
Summary
*without getting lost in the minor noise...upper bol' on the weekly will likely jump to 1915 or so at the open. Certainly, 1920s will be viable within a day or so.
Perhaps a retrace/back test to 1900 later this week. Regardless, broader trend remains bullish, and May is set to close in favour of the bulls.
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Update from Mr Permabull
Oscar has again stepped right off into the land of delusion, not for his latest trading call (which I agree with) but in his jubilant attitude towards adjustable rate, and interest only mortgages.
Whether you like him or not - and I realise many do NOT, Oscar is not an idiot. Yet...here we are..with a 'smart trader'..who has completely learnt NOTHING from everything that happened pre 2008. I'm almost surprised he didn't come on out and start touting 'liar loans' as a good thing for the financial stocks.
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As for me today...well, I ain't getting involved. Tired of things. Tired of everything.
US indexes continue to broadly climb, with the Dow/SP/Trans set to break new historic highs in the immediate term. The issue remains... when will the giant wave from Oct'2011 conclude? Many are agreed it will be this year, but this summer, or not until the autumn?
Since the casino is closed today, I wanted to take a little time to look at a few random bits and pieces...
Trans, monthly2, rainbow
Unquestionably, the most bullish chart out there. We've now a green candle, the first since last December, there looks to be upside to the 8150/250 zone. If the market gets upset later this year, downside target zone is 6000/5500.
R2K, monthly3, rainbow
I am still guessing the R2K - if not also the Nasdaq, have already put in their highs for this year. I consider the weakness since March, the first warning of trouble for the broader market.
If 1212 was indeed a key high, the only issue is whether the next multi-month decline gets stuck in the low 1000s...or low 900s. The latter would most certainly equate to sp'1625/1575.
QE - taper'5 due at the FOMC of June'18
The Fed look set to cut monthly QE to $35bn a month, at the start of July. At the current rate, QE will be cut to zero, at the FOMC of Dec'17.
Of course, my key concern - from an equity bear perspective, what will the Fed do if equities drop 15/20% this summer/autumn? Would QE taper be halted...or even reversed back to $50-75bn?
USD, monthly, 15yr
Contrary to what the 'dollar doomers' would like to believe, the USD is looking stable. Indeed, from a MACD (blue bar histogram) perspective, the cycle look primed to pushing back upward. At the current rate, the cycle will turn positive in July/August.
Unquestionably, a higher USD will put increased downward pressure on ALL US asset classes, not least the precious metals. Of course, such downward pressure doesn't mean there will be net declines in prices, but this aspect of price pressure is very important to keep in mind.
VIX, monthly'3, outlook
So..we have a VIX in the 11s, and the 10s, perhaps even the 9s look set to be hit in the near term. Certainly, if sp'1940/60 zone in June/July, then I'd not be surprised to see single digit VIX, which is something we've not seen since Feb'2007 - when the property bubble peaked.
As for the months ahead, I'll be looking for a VIX spike into the 30s...the 40s look difficult, even if sp' drops (briefly) into the upper 1500s.
I do not see VIX 50+ until late 2015/early 2016 at the earliest. So..from a trading perspective, I'd not be buying any call blocks above strike 25/30. As things are, I've no intention of picking up any VIX until at least mid June.
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Video update from Hunter, with doomer...Rickards
I will note, I kinda find it lame how some are solely focused on Gold. I mean, sure, I can see its use as insurance against currency implosion, and central bank money printing. Yet, what about other assets? Sinclair, Rickards, and many others are one tune asset pumpers, and there are times when I grow real tired of hearing them.
As for tomorrow, and the week ahead...see my weekend post!
Back at the Tuesday open :)
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Bonus video...
Highly recommended, with a very balanced overview. Certainly..all of the recent price chop in the sp'1800s, could merely be the lead in to an attempt to hit sp'2000, given another few months.
