Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +12pts, we're set to open at 2076. USD is +0.3% in the DXY 94.00s. Metals are under pressure, Gold -$10, with Silver -1.0%. Oil is +1.5% in the upper $46s.


sp'60min

Summary

Well... I'm pretty damn bemused at the gains we're set to start with.

Its going to be tough to attain a net daily decline, unless some of the big money really hit the sell button today. The fact oil is making a play for the $47s only adds to the problems.

Lets see how high the algo-bots can drive this to the typical turn of 11am.

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Update from Mr C.



Oscar is sounding extremely bearish, and although he doesn't explicitly say it, he is clearly still seeing the broadly bullish price action in Gold as an indirect bearish warning for the US equity market.

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Overnight action

Japan: recovering into the close, +0.4% @ 16646
China: early sig' declines, but settling u/c @ 2835
Germany: currently +0.5% @ 10022

Have a good Thursday
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**Bonus video....

Just a short update from Mario at SMF...



Mario sure is quirky.. but he called the late Dec/Jan decline, and is seeking a 20% fall this summer/autumn.
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8.51am.. sp +9pts.. .2073..... so.. we're cooling a little....

Still though... its annoying we ain't opening straight into the 2050s... 

WTIC oil - headed to $50?

Whilst US equities closed broadly lower, there was contrasting strength in WTIC oil, which settled +$2.19 (4.9%) at $46.75. The psy' level of $50 is the next natural upside target, but considering the US/world capital markets are set to get increasingly twitchy, that won't be easy.


WTIC, daily

WTIC, weekly

Summary

So.. with a break to the $47s... the $50 threshold is now really close... and its a bizarre thought that if Oil somehow reached $52.. that would be an effecting doubling.

However, considering the broader equity/capital markets should start to get increasingly twitchy into late May.. and especially across June... it would be surprising if Oil did not also start to cool on fears of weak global growth.

Then there is the underlying over-supply issue. Despite today's net weekly surplus of 3.4 million barrels, global supply remains well above demand... and that should keep prices from seeing any sustained action above the big $50 threshold.

I remain of the view that the $26 low will be tested again.. if not briefly broken to the upper teens..for capitulation in the energy industry.


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Looking ahead

Thursday will see the usual weekly jobs, and import/export prices.

*there are a trio of fed officials on the loose.. and Mr Market will be listening for any hint that the Fed will hold off.. ahead of the BREXIT vote.
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4.07am BST.. still awake...

*bonus chart... for the real doomers out there..

sp'weekly8e

Ironically.. for those equity bears who can't much stand Oscar Carboni (its been a while since I received an emailed complaint for highlighting one of his videos), his 'failed head test' scenario is still offering one of the more valid bearish scenarios this summer/autumn.
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I shall close with this...



I could listen to the first 80 seconds of this... for eternity. Make of that... what you will.

Goodnight from London

Daily Index cycle update

US equity indexes closed significantly lower, sp -19pts @ 2064. The two leaders - Trans/R2K, settled lower by -1.5% and -1.2% respectively. Near term outlook remains borderline, as until the Friday low of 2039 is taken out, price action still remains pretty choppy... with a broadly subdued VIX.


sp'daily5

Dow

Summary

sp'500: negating most of the Tuesday gains, but still well above the 50dma (2052). Equity bears need a break of the Friday low of 2039, to open up the 2000/1990s, from which another bounce would likely occur.

Dow: 217pts of the Tuesday gain of 222pts were negated.. which is pretty bearish.. and offers moderate opportunity for near term downside to the 17300/200s. A break <17K looks out of range for at least another 3-4 weeks.

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a little more later...