Econ-data coming in reasonable

US equity indexes ended the week on a moderately positive note, sp +7pts at 2372. The two leaders - Trans/R2K, settled higher by 0.9% and 0.4% respectively. VIX settled -5.2% at 11.66. Near term outlook offers choppy upside into next Wednesday's FOMC, when the fed are set to raise rates by 25bps to a target range of 0.75-1.00%.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher on 'good jobs news is good news', but oil kinda spoilt the party a little, with indexes pinned lower into the late morning. There was another wave higher in the afternoon, but broadly, it wasn't of any significance.

VIX itself was red across the day, seeing a classic case of 'melting lower into the weekend'. A brief foray into the low teens seems viable next Wednesday - as the Fed will raise rates. The key 20 threshold looks out of range until at least late April... when the French will be voting.
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The jobs data

Just a short note on today's monthly jobs data from the semi-mysterious organisation that is the BLS. With net Feb' gains of 235k, and a headline jobless rate of 4.7%, the data is still coming in 'reasonable', right? I'd agree, you could argue the U6 employment rate of 63.0% is still a dire level, and one that is indicative of huge underlying problems.

For the moment though... it can be justifiably argued that the data is coming in reasonable, and it has been a fascinating thing to see the market come to accept that it merits another rate hike.

Those calling for a recession within a quarter or two... are frankly... just plain.... wrong.
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Something I noticed after the close...

So.. the attempt to have an ETF based on Bitcoin has been rejected by the SEC. Frankly... I'm glad. The very notion of an ETF for a crypto currency seems ludicrous, and is anathema to the core philosophy of Bitcoin itself. No doubt some will be very disappointed, and it will be interesting to see how BTC trades across the weekend.

Goodnight from London
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*The weekend post will appear Sat 12pm, and will detail the US monthly indexes.
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Transient turmoil in oil

US equity indexes closed moderately mixed, sp +2pts at 2364. The two leaders - Trans/R2K, settled lower by -0.7% and -0.4% respectively. VIX settled +3.7% at 12.30. Near term outlook offers a 'good jobs news is good news' burst upward into the weekend. However, if the bulls can't quickly push back above 2400 next week, there will be very high threat of another cooling wave to at least 2350.


sp'daily5

VIX'daily3

Summary

It was yet another pretty subdued day for US equities. Price action was a moderately narrow 15pts wide. Note the 50dma - now at sp'2308, and still rising each day. Its difficult to see any price action under that MA.. even given another week or two.

VIX is naturally also very subdued. Just consider this.. we've not seen VIX 13s since Jan'19th!  As the fed now look set to raise rates next Wednesday, a brief foray to the mid teens is a threat, but nothing close to the key 20 threshold seems viable until at least late April.. with round'1 of the French Presidential elections.
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WTIC oil - transient turmoil

Dare I use one of the fed's favourite words 'transient' for a sub title on the world's most important commodity of oil?

WTIC oil, weekly

Last year saw massive resistance at the $50 threshold. This year has seen oil hold above such resistance... until the overnight session. There are a fair few aspects of support within the 48/45 zone. Frankly, I can't see any sustained price action <45... never mind <40, as a few are now starting to suggest.

After all, with each dollar drop in oil, the probability of a sporadic press release (threatening supply cuts) from some oil minister/OPEC exponentially increases.

Goodnight from London
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Bonds weak as yields rise

US equity indexes closed moderately weak, sp -5pts at 2362. The two leaders - Trans/R2K, settled lower by -0.5% and -0.6% respectively. VIX settled +3.6% at 11.86. Near term outlook offers threat of further cooling to around sp'2350, before another push to the sp'2400 threshold, as econ-data is coming in better than 'reasonable'.


spdaily5

VIX'daily3

Summary

It was another pretty subdued day in equity land, with the sp'500 seeing a trading range of just 12pts (0.5%). Yes, short term price pressure is leaning weak, but the bears are still not able to muster anything significant. 

VIX remains naturally subdued, still unable to even briefly trade in the low teens. If the market can rally on 'good jobs news is good news' this Friday, the 10s will be due into the weekend.
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Bearish bonds

June 2016 increasingly looks to have marked a key multi-decade top in US bonds. With the election of Trump, we saw a clear break of rising trend. Since the Fed raised rates last December, price action has been choppy.. leaning a little to the upside.


TLT, monthly2

Price structure is a clear bear flag, and we're already seeing provisional confirmation of it with TLT in the $117s. First soft downside target is around $110. The $100 threshold* seems valid by year end.

*Its important to keep in mind that $100 is an arbitrary number, as TLT is an ETF, and there is some degree of inherent decay (via management fees etc).
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In any case, the old issue remains... would you like some AAPL, BAC, INTC, or even F... or instead, does a US 10yr bond seem more attractive? Unless you think another major deflationary wave is due - with yields set to collapse, bonds are the last place to be headed. Although I'd agree, US bonds would be superior to anything on offer from the UK, EU, or anywhere in Asia.

Goodnight from London
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