Moderate swings to start the month

US equity indexes closed moderately mixed, sp' u/c @ 2170 (intra low 2157). The two leaders - Trans/R2K, settled +0.5% and u/c respectively. VIX settled +0.4% @ 13.48. Near term outlook threatens the sp'2190/2200s... but will clearly be dependent upon the jobs data.


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Summary

So.. another day where we saw moderate weakness.... and with yet another latter day recovery to close broadly flat.

Yes, I was surprised to see the Jackson Hole low of 2160 broken (if only marginally). Yet broadly... this is the same type of price action we've seen for almost two months.

Considering the larger weekly/monthly cycles... we're still inclined to push higher, not least as the Fed will still likely hold off from another rate rise until the Dec' FOMC.
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A new month... a new candle

sp'monthly

Note the key 10MA has now jumped to around 2075. Unless we're trading in the 2060/50s, I just can't take any bearish talk/outlooks seriously. Unlike last year, we're no longer in a trading range... having seen new historic highs in all three of the headline indexes.

Similarly, other world markets all appear headed higher into year end... and I'll cover that in depth this weekend.

Goodnight from London

Ending the month on a weak note

US equities ended the month on a moderately weak note, sp -5pts @ 2170 (intra low 2161). The two leaders - Trans/R2K, settled lower by -0.4% and -0.5% respectively. VIX settled +2.3% @ 13.42 (intra high 14.34). Near term outlook is for renewed upside, as the sp'2200s remain due.


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Summary

Today saw further weakness.. which was certainly a surprise. Yet the weakness was nothing of any significance, as has largely been the case since the BREXIT low of sp'1991.

VIX remains naturally subdued, as the market is comfortably holding above the breakout level of sp'2134. The key VIX 20 threshold looks out of range until at least the time of the Sept'21st FOMC.

I remain of the view that rates won't be hike until Dec'. If correct, the VIX might see not 20s until early Nov', as the US election would be a natural excuse for some higher (if brief) volatility.
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The monthly close

Without highlighting a truckload of world markets in this post (I will cover it in full at the weekend)... it was still a broadly bullish month.

sp'monthly

The sp' saw a net monthly decline of -2pts (0.1%), settling at 2170. There was a notable new historic high of 2193. Underlying MACD (blue bar histogram) cycle ticked upward for a sixth consecutive month, as the US market continues to battle upward.

Clearly, Sept/Oct' can be tricky for equities, and we have the election in early November of course. I'm well aware of some outlooks seeking the sp'1800s.. or even lower, but frankly, that just doesn't look probable. Instead, a year end close in the 2300s remains viable.. not least if Q3 earnings come in 'reasonable'.

Goodnight from London

A sixth consecutive net monthly gain?

US equity indexes closed moderately mixed, sp -4pts at 2176 (intra low 2170). The two leaders - Trans/R2K, settled higher by 0.1% and 0.6% respectively. VIX settled +1.4% @ 13.12. Near term outlook is bullish into and beyond the Labor day holiday break (Sept 5th), with sp'2225/50 a viable target by late September.


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Summary

A pretty subdued day.. as expected... leaning a little weak. Even the afternoon cooling to sp'2170 only saw the VIX climb to 13.60. A move to the 15s looks highly unlikely in the near term, with the key 20 threshold out of range until late September.

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A probable August net gain

sp'monthly

Considering the short term cyclical setup, the sp' is set for a sixth consecutive net monthly gain - the best run since summer 2013.

I am well aware - and would agree, that the Sept/Oct' period can be a struggle for equities, but broadly, I don't see a move back under the breakout level of sp'2134. Bears... look..... toast.

Yours.. the bullish permabear.

Goodnight from London