More bad news?

US equity indexes closed moderately mixed, sp -1pt at 2097 (intra high 2109). The two leaders - Trans/R2K, settled higher by 0.5% and 0.2% respectively. VIX settled -1.3% @ 14.76. Near term outlook continues to offer the 2040/30s, which should equate to VIX around the key 20 threshold.


sp'daily5

VIX'daily3

Summary

The morning high of sp'2109 was just another tease to those who still believe we're in a bull market. Arguably, today saw failure number 18, since the May 2015 high of 2134.

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VIX remains relatively subdued, but as this afternoon showed, any degree of equity weakness will see the VIX jump pretty quickly.

From a pure cyclical perspective, equities are more likely to break lower.. than up and away.


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More bad news?

The US capital markets await the latest employment data from the BLS. Regardless of whatever numbers are issued, what will matter is how the market interprets the data.

My guess is 90-110k net gains, but even if that is correct, would the market decide that 'bad news is bad news' or 'bad news is good news', in that a rate rise could be ruled out for the remainder of the year?

Anyway, besides the US data, the financial tremors continue to grow in the EU, and that can't just be dismissed as 'not important' by the equity bull maniacs.

notable weakness, DB, daily

A net daily decline of -3.2% to $12.56, but hey... its nothing to be worried about, right?

Goodnight from London

Underlying financial tremors

US equity indexes closed moderately mixed, sp +11pts at 2099 (intra low 2074). The two leaders - Trans/R2K, settled -0.1% and +0.7% respectively. VIX settled -4.0% @ 14.96. Near term outlook continues to offer the 2040/30s - which should equate to VIX 19/20.


sp'daily5

VIX'daily3

Summary

It was not exactly the most exciting day in equity land, with a morning low of sp'2074, and then a pretty tedious (but not unexpected) latter day recovery to fill the price gap zone of 2095/2100.

VIX remains relatively subdued in the mid teens, a return to the key 20 threshold looks viable as early as this Friday.
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The tremors are getting bigger

Far more notable than the past three days of main market price action, are the continuing developments for European financials. With stocks like DB and RBS continuing to implode, the stories of impending doom just keep on coming.

Mainstream chatter of a mass EU bank bail-in is increasing, as more recognise that huge capital injections are needed just to keep the EU system ticking over.

No doubt the ECB is standing by to print 'some number' of trillions to at least provide a temporarily fix. Further QE would be hyper-bullish for Gold and the related mining stocks.
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For the systemic risk that remains the DB, it was just another day

DB, monthly, 20yr, linear scale

Nothing to add from yesterday's post on my 'fairvaluestocks' page.

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The bigger weekly cycle continues to offer another big drop

sp'weekly1b

I've eyes on the MACD (blue bar histogram) cycle which is set to turn negative cycle in the near term. The pattern is similar to last December. First soft target is the 2000/1990 zone, and then the lower bollinger, which will be around 1990 next week.

As has been the case since summer 2015, the broader bearish outlook is dropped on any break >sp'2134, or for the less risk tolerant... >2113/20.
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Fed/Market chatter from Schiff


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As ever, I continue my intraday postings... see HERE for details.

Goodnight from London

Turning back lower

US equity indexes closed broadly lower, sp -14pts @ 2088 (intra low 2080). The two leaders - Trans/R2K, settled lower by -1.3% and -1.5% respectively. VIX settled higher by 5.5% to 15.58. Near term outlook offers the 2040/30s, with VIX 19/20s.


sp'daily5

VIX'daily3

Summary

The short trading week began on a somewhat bearish note.

To be clear, I don't expect anything under sp'2030 this week, even if the Friday jobs data comes in <50K. It always takes some time to build downward momentum. A break under the BREXIT low of 1991 looks out of range until at least next week.

As next week is opex - which inherently leans in favour to the bulls, more 'interesting' downside to the 1950/20 zone looks out of range until after July 17th.


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US Bonds, TLT, monthly2

US bonds continue to rise as the 10yr yield is now down to around 1.3%. TLT in the $150/160s is a viable near term target. By default, higher bonds bode against equities.. not always... but often.


WTIC oil, weekly2

A seventh consecutive blue candle, after a Tuesday decline of -4.9% to the $46s. First big support is the $40 threshold, which looks probable before end month, and that would bode well for the equity bears.

Goodnight from London