Daily Wrap

US equity indexes ended the week on a moderately positive note, sp +8pts @ 2099. The two leaders - Trans/R2K, settled higher by 0.6% and 0.9% respectively. VIX cooled into the weekend, -2.3% @ 13.12. Outlook remains extremely borderline, as the market is a mere 1.7% from breaking a new historic high.


sp'daily5

VIX, daily3

Summary

sp'500: the fourth net daily gain of the last seven trading days. A notable fourth day above the 50dma. Underlying MACD (blue bar histogram) is the highest it has been since late March - when sp' 2050s.

VIX: naturally melting lower into the long weekend, with a notable black-fail candle on Monday, followed by four net daily declines.
--


Update on the USD, weekly

A fourth consecutive net weekly gain. Underlying MACD is set for a bullish cross at the Tuesday open, and the DXY 96/97s looks highly probable in June.

It is a curious thought as to when the mainstream will start getting twitchy about the strengthening dollar. Similarly, the 'dollar doomers', what are they going to say as the USD (as seems inevitable) breaks above the DXY 100 threshold.. and keeps on going?
--


A big move is coming

Many now recognise that a big move is coming. Either the market is going to see a massive breakout to new historic highs, or the recent rally from sp'2025 is just another tease to the bulls, before renewed significant downside in June.

My best guess?  Considering an array of threats - not least the BREXIT vote, I'm still leaning for another wave lower.

Clearly though, if we break >2111, that will likely lead >2134, in which case, the short side trade is arguably dead for the better part of a year or two.

Yours... trying to be open minded.

Goodnight from London

--
*the weekend post will appear here (as normal), Sat' 12pm EST, and will detail the US weekly indexes

Daily Wrap

US equity indexes closed moderately mixed, sp -0.4pts @ 2090. The two leaders - Trans/R2K, settled lower by -0.3% and -0.1% respectively. VIX remained in cooling mode, -3.4% @ 13.43. Near term outlook threatens a minor wave higher to attempt to clear the sp'2100 threshold, but it should fail.


sp'daily5

VIX, daily3

Summary

A day of very minor chop, much like the price action of May 20th/23rd. There is clearly threat of another minor lurch higher, but broadly... we're seeing increased selling as we're close to the sp'2100 threshold.

Price action remains much the same since summer 2015. A big move is coming, as many are starting to recognise.

--
Update on the USD, weekly

The DXY 91s mark a clear spike low. Underlying MACD (blue bar histogram) is set for a bullish cross within 2-6 trading days.

The market is trying to price in a possible second rate hike - which is inherently bullish for the USD, although I'm still highly dubious the Fed will raise until the Dec' FOMC.

What should be clear, any price action above the double top of DXY 100, and the door will be wide open for a straight run to the 120s. That would have a great many implications for just about everything.
--


Looking forward to a three day weekend

Its been a tiresome week, not least as I've been battling to build my new home site, but also to keep this page (and a few others) routinely updated.

Once the GDP data is out of the way tomorrow, by 11am, price action will likely be even more muted that today's narrow range of 7pts (0.3%).

Yes.. Yellen is speaking, but its just an award ceremony, and I'm bemused that the mainstream seem to be giving it so much attention. Do they really expect Yellen to give a long speech on monetary policy?

Goodnight from London

Daily Wrap

US equities settled broadly higher for a second consecutive day, sp +14pts @ 2090 (intra high 2094). The two leaders - Trans/R2K, settled higher by 0.8% and 0.5% respectively. VIX remained in cooling mode, -3.6% @ 13.90. Near term outlook is extremely borderline, as the sp'2100 threshold remains major resistance.


sp'daily5

VIX'daily3

Summary

So, a second day of equity gains, with the VIX continuing to cool from last week's high of 17.65.

With a three day holiday weekend approaching, price action will be leaning on the quieter side, and that will favour the equity bulls.

A move back above the key VIX 20 threshold looks inevitable in June, but then, are we only looking at a brief foray to the low/mid 20s, before renewed equity upside (to new historic highs) across the summer?

--

Market chatter from the Schiff




--
Three days left

With next Monday CLOSED in the US market for Memorial day, my attention is increasingly focused on how the month will settle.

sp'monthly2 - boll/Keltner

I highlight the above monthly chart as I see some people posting overly bearish downside targets for June.

As I often like to say... first things first.

First, the equity bears need to break last week's low of sp'2025, then the giant psy' level of 2K, and then show some downside power to the low 1900s.

Indeed, across June, the lower monthly bollinger will be around 1930/20s. Any initial break <1900 looks overly difficult.

The lower Keltner band will be offering first viable chance of the low 1800s in July.

...and of course, any break above sp'2134, with Dow >18351, would negate ALL bearish targets, and open up an entirely different outlook, the far more scary inflationary scenario.

Goodnight from London