Pre-Market Brief

Good morning. Futures are broadly flat ahead of the jobs data, we're set to open around 2083. Equity bears just need an intraday move of sp -12pts to 2071 to break the 200dma.. which will open the door to a weekly close in the 2060s.. or even 50s. That should equate to VIX 15/16s.


sp'daily5

sp'weekly

Summary

 *it would be really useful for the equity bears to break below last weeks low of sp'2063.
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A big day is ahead. We're currently net lower on the week by around 1% for the sp'500. A weekly close <2070 would make for a very bearish close, and offer further clarity that the market has maxed out for the summer, if not the year.

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Overnight China action:  Broad upside across the day, settling +2.3% @ 3744. There remains a high risk the PBOC will cut rates this Sunday.
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standing by for the jobs data (due 8.30am EST)................


8.31am net gains: 215k, headline jobless rate: 5.3%. . inline.

Indexes:  moderate weakness, sp -3pts... 2080.

Eyes to the USD and bonds....

USD +0.3% DXY 98.10s....
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Now.. its merely a case of whether we can break <sp'2072 today....
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8.34am.. with stronger USD.. commodities under pressure,  Gold -$4... with Oil -0.7%


8.40am.. sp -5pts.. 2078... just 6pts away from a clear break..  Of course.... the Dow/Trans... well below such equivalent levels.


KEY signal...  bonds just jumped... TLT +0.3% in the $123s... a break into the 124s today would likely equate to sp'2060s.

Bonds look set for broad upside into early Oct'... and that sure isn't going to help equities.
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8.56am... micro jump... sp +2pts... 2085.  Hmmm

USD remains +0.4%  98.20s.... underlying downward pressure on commodities....increases.


9.00am.. sp +5pts... 2088...

Arguably... another opening minor gain... set to fail....

For those not already long VIX... its a viable entry this morning....  unless of course you think we're headed to new highs into Sept/Oct.

.. but then... what about the technical breaks in AAPL... DIS, INTC.... etc ?
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9.05am.. So... mixed chop in pre-market.... but we have some underlying key moves in the USD.. and bonds. Both are supportive of the bearish equity/commodity case.

USD in the 98s... it does bode for a key break above the giant DXY 100 threshold... and onward to the 120s.

I myself am still churning on 'how the hell can equities rebound after October.. if USD is broadly climbing across 2016'.
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9.17am. Not surprisingly, the cheerleaders on clown finance TV are getting twitchy a viable seventh consecutive net daily decline for the Dow.. not seen since the mini crash wave of July/Aug 2011.

.. sp +1pt... set to open 2084.

Eyes on TLT +0.5% in the $123.40s... set to break new cycle highs.
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9.38am.. battling it out... a few are clearly buying on support.. now at 2075.

Broadly..  the weekly/monthly cycles are clear...

*opening VIX reversal candle.

The Dow monthly is ugly

The Dow saw a sixth consecutive net daily decline, settling -120pts (0.7%) @ 17419, the lowest level since Feb 3rd. The bigger monthly cycle looks conclusively maxed out, with viable downside to the 16500/000 zone by early October.


Dow' monthly2

Dow'weekly1b - H/S scenario

Summary

*a notable red candle on the monthly 'rainbow' chart... the first since Sept'2011.
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With severe technical breaks in stocks like AAPL and DIS, the Dow is a broken index, and looks headed for the 17000 threshold in the immediate term.

Price structure on the weekly cycle is a clear H/S formation, and is highly suggestive of the 17000 threshold before first opportunity of a bounce. Much lower levels look due across the next two months.
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Looking ahead

Friday will center around the monthly jobs report. Mr Market is expecting net gains of 212k, with a headline jobless rate of 5.3%. Frankly, 212k looks set to be easily surpassed, 250/275 seems very viable, and would probably result in case of 'good news is bad news'.
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Goodnight from London

Daily Index Cycle index

US equities closed broadly weak, sp -16pts @ 2083 (intra low 2075). The two leaders - Trans/R2K, settled lower by -0.8% and -1.3% respectively. Near term outlook is for a key break of the 200dma (2072), which should offer further downside to the 2050/40s.


sp'daily5

Dow

R2K

Summary

*a notable sixth consecutive net daily decline for the Dow.
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Little to add.

The Wed' rally... with the failed spike, was confirmed with today's downside. Lower levels look due in the immediate term.

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a little more later...