Powerfully bullish week

US equity indexes closed broadly higher, sp +13pts @ 2259. The two leaders - Trans/R2K, settled -0.1% and +0.1% respectively. VIX settled -7.0% @ 11.75. Near term outlook offers a retrace, but broadly.. the US market is unquestionably hyper-strong.


sp'daily5

VIX'daily3

Summary

A sixth consecutive net daily gain for the sp'500.

With equity indexes managing to keep pushing higher, the VIX was re-crushed back into the 11s.

For now, there is zero sign that the market is exhausted. Even with the Fed set to raise rates next week - which the market has clearly accepted as 'due', is the market merely going to keep clawing higher all the way into early 2017 without any degree of retrace?

--
A week for the bulls

sp'weekly1b

A powerful net weekly gain of 67pts (3.1%). Its notable the upper weekly bollinger is in the 2230s, and the market is clearly on the extended side. Its ironic that many are now resigned to the 2300s, whether by year end.. or more viable.. in January. Further out, the 2400/500s are now consensus for 2017, with Bank of America recently touting a bullish case of the 2700s.

In any case... I think many are starting to settle into a pre-holiday mode... with just 14 trading days left of the year.





Goodnight from London
--

*the weekend post will appear Sat' 12pm EST, and will detail the US monthly indexes

The VIX divergence

US equity indexes closed broadly higher, sp +4pts @ 2246. The two leaders - Trans/R2K, settled higher by 0.5% and 1.6% respectively. VIX settled +3.4% @ 12.64. Near term outlook increasingly threatens a retrace, as the VIX appears floored from 11.30. At best, the sp'2170s... where the 50dma will soon be lurking.


sp'daily5

VIX'daily3

Summary

Yesterday saw equities break new historic highs. Today was a mere repeat performance, as 5 of the 6 main indexes I regularly highlight pushed well beyond the twilight zone.

Also like yesterday, there was a clear divergence between equities and the VIX. Whilst few noticed it yesterday, a great many did notice it today.

The VIX is clearly flashing an early warning, and confirming the (obvious) notion that equities are over-extended.

A retrace is due. The irony is that the market could fall a significant 4%, and that would only take us to around the sp'2170s, where the 50dma will be lurking next week. At best, that might equate to VIX 16/17s. Anything above the key 20 threshold looks out of range.

Goodnight from London

The Transports follows

US equity indexes closed broadly higher, sp +29pts @ 2241. The two leaders - Trans/R2K, settled higher by 2.5% and 0.9% respectively. VIX settled +3.6% @ 12.22. The market is due a retrace, but for now... with new historic highs being regularly achieved, there is little sign of it.


sp'daily5

VIX'daily3

Summary

Well, today was particularly bizarre. The market opened with very minor mixed chop, a touch of weakness to sp'2208, but then grinding higher, and accelerating into the afternoon.

We saw a quartet of new historic highs: dow, sp, R2K, and most notable... Transports.

VIX naturally broke a new cycle low of 11.33, the lowest level since August. However, there was a distinct divergence to equities, with the VIX closing in the 12s. The 14s are within range before the weekend, with 15/16s more viable early next week.

--
Transports, monthly

With a new historic high of 9383, it was a particularly strong day for the 'old leader'. Its notable the upper bollinger is still around 9000, and its difficult to see the tranny keep on pushing in the near term. In any case... 10k seems a given into spring 2017.

Goodnight from London