Pre-Market Brief

Good morning. US equity futures are sharply lower, sp -37pts, we're set to open around 1844, decisively breaking the Friday low. Oil continues to implode, -3.4%, with an overnight low of $28.45. Gold is catching a renewed fear bid, +$10, almost at $1100.


sp'60min

sp'monthly2b

Summary

*overnight low, sp -43pts... 1837.

This is a decisive 1% below the Friday low, and absolutely trashes any hopes of a short term floor.

Instead, the door is wide open to a straight move to the 1750/25 zone, here there are multiple aspects of support. Again, I'd refer anyone to the Jan'2008 candle on the 'Guppy' chart. A similar move right now would be to the 60 EMA, in the 1730s.
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early movers...

AAPL -2% @ $94s
BAC -3.7% in the $13.70s.. as hopes of another rate hike vapourise.
DIS -1.9% @ $92s
SDRL -11.8% @ $1.87... also on the 'disappear list'.
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GDX +2.2%.. as Gold catches a temporary fear bid.
NFLX +3% @ $111 on earnings, but well below the AH high of $123
TVIX +12% @ $11.88
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Doomer chat - Hunter with Williams



As ever.. make of that, what you will, I sure don't agree with any of the 'dollar doom' comments. Williams is much like Schiff, very inflexible, both of whom have touted the collapse of the USD for over a decade. Ironically, the USD increasingly looks set to further strengthen, as the ECB and BoJ print to oblivion.
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Overnight market action...

Japan: -3.7% in the 16400s
China: -1.0% @ 2976.
Germany:  currently -3.0% @ 9371
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Have a good Wednesday
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**awaiting CPI data...
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..ohh, and IBM -5.0% in the $121s is not helping the market mood either. Maybe they should just buy back more shares, that will solve the underlying problem, right?
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8.57am. .We're off the lows, but still, sp -29pts.. 1852.. and that certainly breaks the Friday low.

Mainstream are getting spooked.

Equity bears should look for VIX 31s to confirm that 1750/25 zone is coming BEFORE the FOMC.
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9.04am... Ray Dalio, aka.. Mr QE4 (remember the Bloomberg interview?) is in Davos, touting some 'depression' doom.

Q. Will the Fed launch QE4 when sp'1600s?
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9.37am.. and there goes the Friday low....  there is no real sig' support until 1750/25 zone.. which is clearly viable before end month.

VIX is a little lackluster.. +8% in the 28s... equity bears need 31s to confirm.

It sure isn't dull

It was another pretty wild day in market land, with pre-market gains of sp +30pts - at the equivalent of 1910, reversing to hit 1864 in the afternoon. The daily close of sp +1pt @ 1881, keeps the scenario of upside into the next FOMC on track.


sp'weekly1c

sp'monthly3d

Summary

Suffice to add, today was indeed pretty wild, and continues to reflect the underlying weakness that we've seen since late December.

Broadly... the trend is clearly much lower, but a bounce into next weeks FOMC looks very viable.. if not probable.

Shorting from the sp'1960s would be very attractive indeed, along with VIX 20/18 zone.
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re: monthly3d: I remain of the view that the market will level out in the late spring/early summer around sp'1600. So long as we don't see any monthly closes <1600 (1500 to be decisive), the deflationary collapse scenario of sp'1000 or even 500s is still in the realm of fantasy land.
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Looking ahead

Wednesday will see CPI and housing starts

*the EIA oil report is delayed until Thursday, due to the holiday.
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Goodnight from London

Daily Index Cycle update

US equities closed very mixed, sp +1pt @ 1881 (intra range 1901/1864). The two leaders - Trans/R2K, settled lower by -0.5% and -1.3% respectively. Near term outlook remains for a bounce into the next FOMC, best bullish case is for 1960/70s, before renewed powerful downside to the 1750/25 zone.


sp'daily5

Trans

Summary

Most notably, despite closing net lower, the two leaders - Trans/R2K, did manage to hold above the Friday low.

Similarly, the sp'500 held the Friday low of 1857... with a marginally higher low of 1864.

Near term outlook: bullish to sp'1940/60s, battling upward into the next FOMC.

Broader downside to at least 1750/25.

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a little more later....