10am update - opening weakness

US equities open somewhat lower, but it does very little to negate the Wednesday hyper swing-gains. Equity bears should be desperate for a daily close at least in the 1955/50 zone, along with VIX 16s. Meanwhile.. Oil remains very weak, -1.1%.


sp'60min

sp'daily5

Summary

It remains a VERY messy situation in my view.

A lot of people are no doubt being stopped out on both sides... as this market battles to secure a double floor of 1926/25 spanning the past week.

Best guess? Right now, I'd be somewhat surprised if we manage to break another new low.

The one thing the bears do still have.. .the weekly cycles remain outright bearish, but more on that later.
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Notable weakness: coal miners, BTU -6.7%... new multi-year lows....   BTU looks headed for $5. The US Govt's 'war on coal'... continuing to show progress.


10.09am.. sp -11pts , 1957..... hourly MACD Cycle is levelling out... and there IS a full 8-12 trading hours of viable downside... ALL the way into the weekend.

VIX showing some initial power.. +5%... set to break the 16s.

VERY long day ahead....    


10.18am... another micro bounce... already back to 1961.

Miners are cooling a little, GDX -1.9%


10.38am.. sp'1953... this is more like it.... bears are back... VIX +6.8%.... 16.10s.

These kind of day to day swings.... not seen this price action in a long time.

Notable weakness: oil/gas drillers....usual suspects.. RIG/SDRL, both -2.5% or so.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -5pts, we're set to open at 1963, which is still a very significant 38pts above yesterday mornings low. Metals are climbing, Gold +$7, whilst Oil is still unable to rally, -0.6%.


sp'daily5

Summary

*jobless:287k, a touch better than expected.
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Well, after yesterday afternoons madness, it is difficult to know what to say. Even if somehow we could close in the 1940s today, it would still make a very difficult situation for those who believe further weakness is still possible.

Anyway, the only important near term resistance left now is sp'1977

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With the Wednesday jump... Oscar is back to normal service



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Good wishes for Thursday
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9.38am... Opening weakness, but really, not much downside pressure..and with a cluster of support around 1960...bulls are so far holding up very well.

Notable strength, airlines, UAL +6%... after all.. now that Ebola is cured... nothing to worry about global air travel. Oh wait....


9.45am.. Opening candle on the VIX turns black.... this bodes badly for bears... there just isn't any downside power right now.

Daily Wrap

US indexes saw a very powerful reversal to the upside, swinging from a morning low of sp'1925, and settling +33pts @ 1968. The VIX confirmed the equity gains, -12.1% @ 15.04. Last line in the sand for the equity bears is the Monday morning high of sp'1977.


sp'daily5

VIX'daily3

Summary

Most notable today, the daily candles...

Bullish engulfing for the indexes.. and (appropriately), a bearish engulfing candle for the VIX.

Frankly, it bodes badly for the equity bears. The last line now is the Monday morning high of 1977. Any move >1977.. and it will once again be a case of 'bears fail.. bulls win'. For the serious 'bear money' still holding short... it makes for a very appropriate exit level.


Weekly cycle still red (just)

It is notable that the weekly 'rainbow' candle remains red.. despite today's powerful gains.

MACD (green bar histogram) is still ticking lower, but we're on the low side, and if bears can't hold below the Monday high of 1977, then a new multi-week up cycle will begin.... with first target upside to 2050 or so.
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Looking ahead

Jobless claims, wholesale trade... in the scheme of things... not much of significance.

There are no less than four Fed officials speaking tomorrow, and Mr Market will be listening, not least after today's FOMC minutes. ECB chief Draghi is due to appear on some panel with Fed vice chair Fisher at 11am.

*next QE is not until next Tuesday
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Goodnight from London