Daily Index Cycle update

US equity indexes closed higher, sp +12pts @ 1940 (new historic high - 1941). The two leaders - Trans/R2K, settled higher by 0.8% and 2.0% respectively. There is near term upside to the 1945/55 zone, but a minor retrace seems likely from there.


sp'daily5

R2K

Trans

Summary

So..a touch of minor chop in the morning, but with gains building across much of the day.  Certainly, equity bears continue to be ground into dust.

The fact we had $2-3bn of QE fuel no doubt helped 'inspire' the rally to a large extent.

*I remain on the sidelines, and considering the broader weekly/monthly cycles, I can't get overly bearish until at least the next FOMC of June'18. Perhaps we'll see a wave lower from there, but that itself might only be a few percent, which in my view is hardly worth attempting to trade.
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a little more later...

Volatility back on the slide

With US equity indexes breaking new historic highs, the VIX naturally slipped, settling -3.3% @ 11.68. Near term outlook is for the VIX to remain within the 14/11 zone, but if sp'1950/60s, then VIX in the 10s appears viable.


VIX'daily3

Summary

There is little to add.

VIX remains very low, and this (in theory) could remain the case for some weeks.

My best guess is that we'll see a spike (if minor) into the 14/16 zone around the time of the next FOMC - June'18. VIX 20s now look unlikely until at least mid/late July.
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more later..on the indexes

Closing Brief

US indexes closed with further gains, sp +12pts @ 1940. The two leaders - Trans/R2K, settled higher by  +0.7% and +2.0% respectively.  The immediate term remains bullish, but there is threat of a minor retrace from the 1945/50 zone.


sp'60min

Summary

Suffice to say, the lunacy continues, and we didn't even get any QE from the ECB (not that I expected that until later this year).
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more later...on the VIX