A retrace to the breakout zone?

US equities closed moderately weak, sp -7pts @ 2165. The two leaders - Trans/R2K, settled lower by -1.3% and -0.5% respectively. VIX settled +8.2% @ 12.74. Near term outlook offers a retrace to the breakout zone of the sp'2130s, but broadly, price action remains very bullish.


sp'daily5

VIX'daily3

Summary

So, moderate declines, and frankly, nothing for the equity bears to get excited about. Even a move to the sp'2130s next week would merely make for a minor retrace, before the 2200s.

VIX failed to close in the low teens for a sixth consecutive day, which kinda sums up just how strong/confident the US market is. The key 20 threshold looks out of range until at least mid/late September.

--

Notable world market - UK, monthly

A July close >7k looks out of range, but by Sept/Oct, it looks viable. A break/hold >7K would be extremely bullish, and bode for broader upside to the 8000s in early 2017. Most other world markets look similarly bullish.


--
Regardless of any further cooling tomorrow/early next week, the underlying upward pressure should be clear to almost everyone.

I'm well aware of some out there touting a return to the sp'1800s by the early autumn, yet... how is that going to occur? Even the 'shock' BREXIT result only resulted in a two day decline.. and the second day even saw the VIX close red!

Last Monday's breakout >sp'2134 remains a hugely significant event, and the 2200s look an easy target for Aug/September.

Goodnight from London

Blue skies for the equity bulls

US equities closed moderately higher, sp +9pts @ 2173 (intra high 2175). The two leaders - Trans/R2K, settled u/c and +0.8% respectively. VIX settled -1.7% @ 11.77. Near term outlook still threatens a minor retrace to the breakout level of the 2130s, but broadly... the 2200s look an easy target for August.


sp'daily

VIX, monthly

Summary

Another day for the equity bulls, as the sp' breaks a new high of 2175, along with Dow 18622.

VIX remains utterly crushed, today's close of 11.77 was the lowest since 26th August 2014.
--


Blue skies for the equity bulls

With another pair of historic index highs, the bulls have justification to be very confident for the rest of the summer. Regardless of the threat of a minor retrace to the breakout level of the sp'2130s, the 2200s look an easy target for August.

I realise some out there are still holding short, the obvious question is... why? The May 2015 high of sp'2134 was always the ultimate line in the sand. That has been decisively broken through, and today marks the eighth consecutive day above the old high.

Sure, we can't keep rising at the current post BREXIT rate (184pts, 9.2%, across 17 trading days) forever, but it should be clear, this is no market for the bears.

Goodnight from London

Quiet day in market land

US equities closed moderately weak, sp -3pts @ 2163. The two leaders - Trans/R2K, settled lower by -0.1% and -0.6% respectively. VIX settled -3.8% @ 11.97. Near term outlook threatens a retrace to the breakout zone of 2135/00. The 2100 threshold looks increasingly out of range.


sp'daily5

VIX'daily3

Summary

A fourth consecutive day of minor chop for US equities, arguably in consolidation mode, after the powerful run from the BREXIT low of sp'1991.

With Microsoft (MSFT) earnings coming in much better than expected, the VIX fell into the 11s in the brief 15 minutes of AH trading, which made for the lowest close since July 17th 2015.
-

King Dollar remains... King

USD, weekly

Today's close in the DXY 97s was overlooked by many, but I sure noticed. The 97s open the door to further grind higher to the 98/99s.

A break above the 100 threshold would be massively significant, and as many recognise, would have all sorts of consequences, particularly for commodities.

Why is the USD rising? Mostly capital flows into the US, from almost every part of the world. A secondary issue is that much foreign debt is denominated in USD, and that underpins a strong USD bid.

Goodnight from London