Pre-Market Brief

Good morning. US equity futures are a little weak, sp -4pts, we're set to open at 2041. USD is trying to stabilise, +0.1% in the DXY 98.70s. Commodities are bouncing, Gold +$2, whilst Oil is +0.4% in the $41s.


sp'60min

Summary

It is Friday the 13th, and for those who get easily spooked.... perhaps its best to stay in bed all day, with all windows/doors locked.

Seriously though, market still looks a little shaky... although I'm guessing today will end broadly flat.

VIX daily cycle though is still arguing for 20s... and that will equate to sp'2020s... but more viable... next Mon/Tuesday.
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notable early movers

Nordstrom (JWN) -21%.. after lousy earnings
Cisco Systems (CSCO) -5.9%.... post earnings upset

BAC -1.1%. as threat of rate hike lessens.
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Update from Oscar



I have followed Oscar since late 2008, and I certainly do respect his view. His comments in this video are somewhat spooky.

*the US market achieved a VERY powerful close last month, above the key 10MA. Yet... other world markets are yet to achieve that.

Certainly, I want to see NEW highs before year end in some indexes (Dow, sp, Nasdaq), along with other world markets also closing above their respective 10MAs. If not.... its a very serious problem.

For now.... I'm still guessing we battle broadly upward... helped by low rates and continuing QE (such as from the ECB and BoJ).
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Doomer chat with Hunter



I'll periodically slate Hunter for going soft on the Gold bugs (like the recent Hemke interview), but his end week news roundups are pretty good.
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Overnight Asia action

Japan: -0.5% @ 19596... a little weak into the weekend
China: -1.4% @ 3580. It will be VERY important for the Shanghai comp' to hold the 3400s.

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Have a good Friday.
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8.31am.. retail sales, m/m +0.1%.... weak.

PPI, -0.4%... pretty sig', not great for the macro-bulls.

Its not inspiring those seeking a rate hike.... BAC -1.4%

It is just a natural equity retrace

US equity indexes closed significantly lower, with the sp -29pts @ 2045. Chatter is naturally increasing in some of the more bearish corners of the financial sphere, about much lower levels into year end and across early 2016. Yet.. the October equity close argues strongly against sustained weakness.


sp'weekly1b

Copper, monthly

WTIC, weekly2

Summary

I do understand why some are getting a little excited in equity bear land. After all, commodity prices are seeing another rather powerful move lower, and that is clearly pressuring the broader market lower.

Yet.. having ramped from sp'1871 to 2116, even a retrace to the 2020s would be very natural.

For now, I see the current wave as merely one for existing shorts to offload... with an opportunity (for those that can stomach it) to go long into Christmas/New year.
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re: Copper, a net daily decline of -2.0% to $2.17. Sub $2.00 looks very probable, as King dollar - set for sustained action >DXY 100, will keep downward pressure on most commodities into 2016.

re: Oil.  A second consecutive red candle on the 'rainbow' chart. Absolutely bearish, sustained price action under the $40 threshold looks imminent.
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Looking ahead

The week will conclude with an array of key data... PPI, Retail sales, Busin' invent, consumer sent'.

*Fed official Mester is speaking in the late morning, and Mr Market will be listening.
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Goodnight from London

Daily Index Cycle update

US equities closed significantly lower, sp -29pts @ 2045. The two leaders - Trans/R2K, settled lower by -1.6% and -2.0% respectively. Near term outlook continues to offer a natural retrace to the sp'2020s, along with VIX briefly in the low 20s.


sp'daily5

R2K

Summary

*the second market leader - R2K, saw a very decisive break of rising trend. Next support is a touch lower in the 1150/40 zone. After that.. 1100.
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The sp' saw an opening break under the 200dma (2064)... and was broadly weak across the day. The daily close in the 2040s - with VIX 18s, is in line with the target of the 2020s by early next week.

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a little more later...