Pre-Market Brief

Good morning. Futures are moderately higher, sp +4pts, we're set to open around 1974. Metals are a touch weak, Gold -$2, whilst Oil is managing a minor gain of 0.4%. The Fed look set to announce QE taper'6 later today.


sp'60min

Summary

*ADP jobs, 218k net gains.. a little below expectations, but still 'reasonable'.

Q2 GDP: 4.0%   vs. a revised -2.1% (-2.9% previous estimate)
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Growth comes in with a big 4 handle... MUCH better than anyone could have hoped for.

Equities rising, sp +8pts.... 1978.

Frankly...that... in my view.. seals the fate of the bears.. and the market for some months to come.

Next up.... Fed QE taper...at 2pm.. and then jobs Friday, both of which I'd see as a positive for the market.

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Notable hyper strength: TWTR +26% @ $48.
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Good wishes for Wednesday trading


8.57am.. So, we're set for sp +7pts... 1977.. and the 1980s look a given today.

1990/2000s are viable this Friday...which will probably equate to VIX 10s.

R2K should be in the 1150s this morning... a daily close in the 1160s.. difficult..but if the momentum builds..its just about possible.

Notable strength: GRMN +9%... on earnings I guess.


9.22am.. more notable movers...

X (US steel) +16%
UAL +3.4%

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Metals are weak, and are highly vulnerable this afternoon.


9.37am... weird open for GRMN...now its collapsing -3%..

Awaiting an important Wednesday

Wednesday will be a major day for the US capital markets, with ADP jobs, Q2 GDP, and an FOMC announcement. Underlying price action continues to strongly favour the equity bulls, and the giant sp'2000 threshold still looks due to be hit.


sp'weekly8

Summary

In April, Q1 GDP was originally estimated at 0.1%. Two revisions later... -2.9%.

So, even if tomorrows number comes in at 2.5-3.5%... given another two months, it could eventually be revised to fractionally negative - which would make for an official recession.

Considering other data points in the past few months - notably Chicago PMI, I'd guess first reading will be around 2.7%

..and yes, that number remains artificially propped up by a significant amount of Fed QE. 
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Looking ahead

Suffice to say...major day ahead... starting with ADP jobs (8.15am)

GDP is 8.30am - market is expecting 3.1%
FOMC announcement 2pm... there will not be a Yellen press conf.

*next sig' QE is not until at least Friday.
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Best guess?

Even if we open lower tomorrow on weaker than expected GDP, I'd expect the weekly 10MA to hold... with 1990/2000s within the subsequent 2-4 trading days.

*I remain moderately long - via the R2K, and seeking an exit in the 1170s.

Goodnight from London

Daily Index Cycle update

US indexes saw a day of moderate chop, sp -8pts @ 1969. The two leaders - Trans/R2K, settled -1.4% and +0.2% respectively. There is opportunity of the low 1960s, before 1990/2000s.. within the next few days.


sp'daily5

R2K

Trans

Summary

Suffice to say, a day of moderate chop for most indexes, ahead of Q2 GDP, and the announcement of QE taper'6.

The black-fail candle on the Transports remains the only particularly bearish aspect out there. Since that candle, we've seen 4 daily net declines... next support is around the 50dma... 8181.. that is only another 0.4% lower.

Even the weak R2K managed a minor daily gain, and looks set to make a play for the 1170s by end week.
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Closing update from Riley


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a little more later...