Pre-Market Brief

Good morning. Futures are a touch lower (ahead of GDP data), sp -2pts, we're set to open at 2106. USD is building early gains, +0.4% in the DXY 97.30s. Metals are weak, Gold -$10, with Silver -1.0%. Oil continues to climb, +0.4% in the $49s.


sp'60min

VIX'60min'2

Summary

With the FOMC out of the way until mid Sept', the way forward is a little simpler from here.

Now it is simply a case of whether we see new highs in 'some indexes'... before breaking lower... or see another failure in the near term.. and then take out the recent key low of sp'2044.

It remains notable that a number of indexes recently broke the equivalent level of sp'2044. Then there are the trend breaks on the bigger weekly/monthly cycles, but few seem to have noticed that rather important development.

*I remain long-VIX... and frankly, considering we're now already in the 12s.. how much lower could it go anyway?

Hourly equity/VIX cycles continue to threaten an equity down wave into the Friday/monthly close... the setup does NOT favour the equity bulls across the next two days.
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Early movers...

FB -1.4% in the $95s.. post earnings depression

WFM -14%, after a marginal earnings miss, back to the low from last Oct',  $35s.

GDX, -2.4%, as the precious metals continue to weaken, Gold is headed for the giant $1000 threshold.

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Update from Oscar



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Overnight China action: The volatility continues. with the Shanghai comp' seeing a lot of chop.. but then a sharp sell down in the late afternoon, settling -2.2% @ 3705. The recent low of 3373 really isn't more than 1-2 trading days of declines away.
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Have a good Thursday

*standing by for Q2 GDP data - due 8.30am EST.
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8.31am GDP 2.3% , vs prev' +0.6% (revised from 0.2%)

Broadly.. a 'bearable' number for the market... not great... but not dire either. Further, the revision for Q1 negates the recessionary threat.

Equities weakening... .sp -6pts @ 2102
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Metals under increasing pressure as USD claws upward, Gold -$14.
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Equity bears should remain seeking a daily close back under sp'2100....  along with VIX 14s.. for the weekly/monthly close.


9.13am.. sp -8pts.. set to open at the 2100 threshold.... that will probably equate to VIX 13s.

A daily close <2090 would be useful... with VIX 14s.. but I realise most would argue that is out of range.
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9.38am.. VIX making an initial break above hourly 10MA.... hmm    with sp'2101


9.44am.. Clear breaks all over the place.. VIX 13.18...   with sp'2097. 

Mining stocks imploding. GDX -3.7%.... 100% horror.

How will the month close?

It was a second day of gains for the US equity market, sp +15pts @ 2108. A more important issue though is how will the month close? Will there will be further upside.. with a sig' net weekly gain - making for another monthly close above the key 10MA (2067)... or will the market unravel into the weekend?


sp'monthly1b

Dow, weekly1b

Summary

A monthly close under the 10MA on the sp'500 looks very difficult.. unless the market gets badly spooked by GDP data tomorrow.

re: Dow... despite the current net weekly gain of 1.0%, we did have a break of trend on Monday, and until the Dow is breaking new historic highs in the 18400s.. the bull maniacs can't get overly confident of the autumn.. and winter to come.
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Looking ahead

Thursday will see Q2 GDP data, market is expecting growth of 2.9%, which to me seems overly optimistic.

Other data, weekly jobs.
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Eyes still on the VIX

I remain (perhaps overly) focused on the VIX, but for me... that is where I believe the 'big money' might be made across the next few months.

VIX' weekly'2

With further weakness today, the MACD (blue bar histogram) cycle saw a bearish cross on the weekly cycle.  I want to see the VIX pick back up by the Friday/monthly close into the 14s. That would negate the cross... and keep the original scenario intact.

Goodnight from London

Daily Index Cycle update

US equities closed broadly higher, sp +15pts @ 2108. The two leaders - Trans/R2K, settled higher by 1.7% and 0.5% respectively. Near term outlook is mixed, with the hourly cycles offering a down wave across Thurs/Friday, but the daily close >sp'2100 (where the 50dma is lurking) is a rather bullish signal for early August.


sp'daily5

Trans

Summary

*the market laggard - Trans, has seen a rather decisive break above declining resistance/trend. Right now, it the most bullish break of trend that I'm aware of.
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The sp'500 close above the 2100 threshold.. and the 50dma was particularly bullish, and offers broader upside into August.
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a little more later...