USD rising ahead of the FOMC

US equities closed moderately weak, sp -8pts @ 2139 (intra low 2131). The two leaders - Trans/R2K, settled lower by -0.4% and -0.2% respectively. VIX settled -12.2% @ 15.37. Near term outlook offers further chop, with the market set to remain broadly stuck within the 2120/50 zone, until the FOMC announcement.


sp'daily5

VIX'daily3

Summary

Quad-opex naturally saw a lot of chop, leaning on the moderately weaker side.

However, the VIX did reflect underlying market confidence, as it cooled into the weekend, which resulted in a significant net weekly decline.. having briefly seen the 20s in pre-market on Monday.

I will note there is a threat of the sp'2070/50 zone - where there are multiple aspects of support. That would likely require the fed to raise rates next Wednesday, and frankly.. that just doesn't seem at all likely.

I remain of the view the fed won't raise until the Dec' FOMC, which would be a far simpler time, not least as the US election will be out of the way.
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USD, weekly'2

A net weekly gain of 0.8%, settling at DXY 95.99.

RE: H/S scenario. Any break above DXY 96.25 next week would provisionally trash the scenario. A break <94.75 would break the mid term rising trend from May, and would open the door to the 92.00-91.50 zone before year end.

My best guess remains the same... no rate hike until December. If correct, it'd give the USD the excuse for further cooling across Oct/early Dec', before a bounce into early 2017, and then significant weakness across the summer/autumn.

By definition, the H/S scenario offers the DXY 83/82s. I understand how that could be seen by many as crazy talk. First things first... lets see how the USD trades with next week's Fed decision.

Goodnight from London
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*the weekend post will appear Sat' 12pm EST

They tell me its crashing

US equity indexes closed broadly higher, sp +21pts @ 2147 (intra low 2122). The two leaders - Trans/R2K, settled higher by 0.6% and 1.3% respectively. VIX settled -10.1% @ 16.30. Near term outlook offers a great deal of moderate price chop all the way into next Wednesday's FOMC.


sp'daily5

VIX'daily3

Summary

There is not much to note about today. There was a pre-market tease to the equity bears, as the sp' tested the 2120/19 floor, but it held of course.. with the broader market building gains across the day.

If the Fed decide to once again hold off from raising rates - which seems very probable, then the market will resume pushing higher into October, and viably, all the way into spring 2017. 
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The crash callers

Like many of you, I read and follow a lot of people online. A few are outright bullish cheerleaders... others are from the more murky corners.

Its that time of year when the crash/collapse calling is most frequent. This is somewhat understandable, as some of the biggest drops have been during the Sept-Oct' period.

The following three videos are a fair representation of some of the ongoing crash calling.





Ron Walker is actually one of my most favoured chartists, but how could he be bearish with the market just 2-3% from recent historic highs? Walker can spend hours quoting dozens of different technical indicators, but actual price action remains broadly bullish, and that's what really matters, right?
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The end game - SGT



When they aren't promoting a particular micro mining stock, SGT will normally have guests touting an imminent collapse wave. In particular, the 'dollar doomers' are regularly featured. After all, the American people are going to be shopping at Walmart, and pay with Gold and Silver coins, yes?
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Financial apocalypse - Bo Polny



The phrase 'viewer discretion advised' comes to mind for this third and final example. Its 'entertaining' in a particularly twisted way, and is far beyond the twilight zone of 'kook' land. I'd imagine Mr P would be interesting
to chat with, and I have to wonder, is he currently holding hundreds of VIX calls and SPY puts?
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Nothing bearish yet

Despite the (surprising) decline back under the breakout level of sp'2134, the US market remains broadly bullish. My personal 'alarm bell' level are the sp'2050s. If we see any sustained price action in the 2050s or lower, then yes... I'll be open to some kind of sharp (if brief) crashy move. Until then though... any such crash talk can be dismissed as attention-seeking, playing to the 'end of the world' crowd, or just plain wrong.

I could easily increase my audience by touting such an 'imminent crash', but as I've said a fair few times over the last four years... I ain't doing it.

Goodnight from London

Oil remains in cooling mode

US equity indexes closed moderately mixed, sp -1pt @ 2125. The two leaders - Trans/R2K, settled lower by -0.2% and -0.1% respectively. VIX settled +1.6% @ 18.14. Near term outlook offers the 2150s ahead of the weekend. Clearly, the 2200s are out of range until after the FOMC.


sp'daily5

VIX'daily3

Summary

Today was a lot less exciting, as price action is becoming more subdued, with the market another day closer to the FOMC.

With a test of the 2119/20 floor in the closing hour, we now have a short term triple floor of sp'2119/20/19, and that will likely hold into next week's rate decision. I do recognise the threat of another push lower - regardless of a hike or not, but I sure don't expect price action in the sp'2050s or lower.
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Oil continues to cool

WTIC oil, weekly

Oil has continued to broadly cool since last week's high of $47.75, settling -$1.32 (2.9%) @ $43.58. Short term price structure is threatening a move to the 42/40 zone.. before pushing upward into October.

I'm still of the view that we'll break back above the psy' level of $50. If correct, that would unquestionably help kick the equity market higher into the 2200s and beyond.

I will conclude by noting, I've no doubt that if oil is trading in the $60/70s in 2017, the cheerleaders on clown finance TV will tout it as a good thing for the US consumer.

Goodnight from London