A September rate hike?

US equity indexes closed moderately mixed, sp +4pts @ 2182 (intra low 2168). The two leaders - Trans/R2K, settled +0.4% and -0.3% respectively. VIX settled -3.6% @ 12.19. Near term outlook offers renewed upside... straight into the 2200s, with the 2225/50 zone seemingly probable by mid September.


sp'daily5

VIX'daily3

Summary

So.. the sp' floored at the upper end of the secondary gap zone of 2168/64. The market will now be vulnerable to further chop, but leaning to the upside. A move to the 2200s looks due.

VIX finally broke back into the low teens... but couldn't hold them. Further cooling to the 11s looks a given. The only issue is whether we'll see single digit VIX with sp'2225/50 into September.
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More fedspeak

Along with a few sporadic comments from officials like Dudley and Lockhart, the latest FOMC minutes has again resulted in the market questioning whether the Fed might actually raise rates in September.

Frankly, it seems highly unlikely. After all, Yellen will still have reasons 482-485 to throw at the media hacks at the press conf' of Sept'21st.

My best guess remains - as it has been the early spring... no rate hike until the Dec' FOMC.

On this issue though, I'd hope to be wrong. Higher rates are a good thing...and would (ironically) inspire confidence in the US market/economy. Financials would be particularly helped, and I favour Bank of America as having the best potential of the financial stocks within the Dow.

BAC, monthly

BAC has been struggling - like most other financials, since getting stuck in early 2014. The $18 threshold is critical. Any monthly close >$18, would be extremely bullish, and offer an initial target of the psy' level of $20, and then powerfully onward to the 28/30 zone. The latter is going to require a 'Disneyland' scenario of higher rates - at least to 1.5-2.0%, with a US economy that can keeping ticking along.

In any case... BAC is one to watch, and the importance of the $18 threshold is something most should be aware of.

Goodnight from London

Oil continues to climb

US equities closed moderately lower, sp -12pts @ 2178. The two leaders - Trans/R2K, settled u/c and -0.9% respectively. VIX settled +7.0% @ 12.64. Near term outlook offers threat of the 2160s.. before resuming upward. Broadly... the market still looks strong into early September


sp'daily5

VIX'daily3

Summary

So... moderate weakness across most US indexes.

Yet... are any equity bears going to let themselves get overly excited about a decline of 12pts (0.5%) ? Similarly, VIX was only moderately higher... still stuck sub-teens. Does anyone seriously think the key 20 threshold is due in the near term?

Broadly.. equity price action remains strong... and is certainly being helped via continued strength in Oil.


WTIC, weekly

A fourth consecutive net daily gain of $0.84 (1.8%), settling @ $46.58. The psy' level of $50 is well within range by mid September. The past few weeks of USD cooling is no doubt helping Oil build gains. Any closes >$50 should clarify $60 will be hit. The inv' H/S scenario - as also seen in many energy stocks, would be suggestive of $70/75 by late spring 2017.

Goodnight from London

A trio of new historic highs

US equity indexes closed moderately higher, sp +6pts @ 2190 (intra high 2193). The two leaders - Trans/R2K, settled higher by 0.6% and 1.0% respectively. VIX settled +2.2% @ 11.81. Near term outlook remains bullish, as the 2225/50 zone looks due by mid September.


sp'daily5

VIX'daily3

Summary

New historic highs for the sp', dow, and Nasdaq comp' to begin the week, which is about as bullish as it gets.

VIX remains naturally subdued, unable to even break into the low teens. Talk of single digit VIX around the Labor day holiday (Sept'5th) can begin.


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notable strength, UK, monthly

An eighth consecutive net daily gain of 0.4% to 6941 - the highest level since June 2015. The 7k threshold is approaching even faster than I had thought possible. Any monthly close >7K - whether August, or beyond, will be an extremely bullish sign, not just for the UK market, but across the EU... and indeed...the world.

Goodnight from London