Pre-Market Brief

Good morning. US equity futures are a little higher, sp +2pts, we're set to open around 1861. USD is -0.1% in the DXY 99.00s. Metals are cooling, Gold -$2. Oil continues to implode, -2.0%, around the $28.00.


sp'60min

Summary

*awaiting the ECB/Draghi...
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So.... is sp'1812 a short term low? The daily candles - esp' Trans/R2K, are suggestive of yes.

We need a daily close >1900 to give clarity.

In terms of downside, best bear case remains 1750/25 zone.

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Update from an increasingly loud Oscar


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Overnight action...

Japan: holding steady for most of the day, but then spiralling lower into the close, -2.4% @ 16017. Not pretty.
China: much like Japan, falling into the close, -3.2% @ 2880
Germany: shaky gains, currently +0.8% @ 9469

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Have a good Thursday
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8.13am... ECB keep rates unchanged (keep in mind, they are already negative).

Now its a case of word games from Draghi. Will he threaten increased QE... and would the market buy such threats?
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sp +4pts... 1863.... clearly, just getting to 1900 won't be easy.... and seems unlikely today.
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8.27am.. sp +11pts... 1870.... as Draghi is due in a few minutes.

*keep in mind, we've the EIA oil report at 10.30am. It could be one of those days when despite a bad inventory number, the Oil market still rallies.
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8.36am... with talk of 'extended period'... markets initially ramping, sp +18pts... 1877.

8.38am... continued threats.... sp +21pts... 1880.

So.. Draghi is giving the market a major kick higher.... now its about how the market inteprets the Oil report at 10.30am.
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9.13am.. twitchy market.. sp +8pts... 1867.

Still... 1812 is a long way down...... time is, or has already run out for the bears.

Bland capitulation?

It was another day for the equity bears, with a new multi-year low of sp'1812, along with VIX climbing to the 32s. However, the hyper ramp into the closing hour to 1876 was a powerfully bullish swing, and with VIX cooling from an intra high of 32.09 to 26.59, we may have a rather bland capitulation floor.


sp'weekly1b

R2K, weekly

Summary

So, new multi-year lows for most indexes, but the ramp from the morning low of sp'1812 and R2K 958 was powerfully bullish.

The daily close could have been a little stronger, but anyone holding short overnight now faces the threat of Draghi inspiring the EU market tomorrow.. before the US open.

Any break back above sp'1900 would be decisive, and then it would be a case of how high the market can rally across February/March.

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Looking ahead

Thursday will see an ECB meeting, with Draghi set to appear around 8.30am EST.

data: weekly jobs, phil fed', EIA oil report, Nat' gas report.
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Fibonacci nonsense

Here is something that crossed my mind earlier...

sp'daily3

The chart should explain itself. Anyone out there with some related ideas/thoughts?

A multi-week bounce is obviously inevitable, but with broader weakness into the late spring/early summer. The ultimate issue remains whether the the sp'500 can hold the 2000/2007 double top of 1553/1576? For now, I'm holding to the original outlook that I posted Jan'3rd.
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Market/econ chatter from Schiff



As ever, I sure don't agree with everything Schiff says, but I usually think he is worth listening to.

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A frustrating year so far

Frankly, its been a damn frustrating start to the year. Equity bears were teased across 2015... and I think many are simply battle scarred.

A bounce seemed due last week.. but never came. Today, the Oct'2014 low of sp'1820 was decisively broken, followed by a natural rally into the 2pm hour. I launched a VIX-long (via TVIX) position, there was some market chop, but then the market hyper-ramped (especially the Trans/R2K)... with VIX imploding from the 29s to 26s.

I have a very low tolerance lately, and I was more than content to make a run for the exit door, as there now appears serious threat we've made a short term low.

I suppose it could be worse. I could have been long from sp'2081.. or using margin to be long energy stocks/Oil. No doubt some retail amateurs will have been zeroed out since the start of this year.

I guess you could say... another battle has ended, but the broader war continues.

Goodnight from London

Daily Index Cycle update

US equities closed very mixed, sp -22pts @ 1859 (intra range 1812/76). The two leaders - Trans/R2K, settled -0.5% and +0.4% respectively. With a rather powerful wave from 1812 to 1876, the market is threatening a short term floor, although 1812 makes little sense as a key floor.


sp'daily5

R2K

Trans

Summary

sp'500: the Oct' 2014 low of 1820, decisively broken, but then a rather powerful wave to 1876 in the closing hour.

R2K, a hyper swing of 5% from 958 to 1008, settling @ 999.

Trans breaks a new cycle low of 6403, briefly turning positive in the closing hour, but settling -0.5% @ 6625. It is notable that the 200dma is at 8125.. and looks out of range for many months.
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Closing update from Riley


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a little more later...