Meanwhile.. in Brazil

US equity indexes closed moderately higher, sp +8pts at 2365 (intra range 2352/75). The two leaders - Trans/R2K, both settled higher by 0.4%. VIX settled -6.0% at 14.66. Near term outlook offers choppy weakness for Friday-opex. The lower gaps of sp'2348 and Nasdaq comp' 5910 remain set to be filled.


sp'daily5

VIX'daily3

Summary

It was a day of moderate swings, with the sp' seeing early weakness to 2352, but then battling upward. The sp'500 became stuck at first natural resistance of 2375. Its still possible we'll see a brief pop to around 2382.. before resuming low to fully fill the price gap at 2348.

Volatility remains a little elevated in the teens, and its notable the VIX did print a new multi-week high of 16.30. There is resistance (weekly cycle, not shown) around the 16s. Only a daily close >16 would offer any real threat of the key 20 threshold being seen.
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Meanwhile... in Brazil

Those getting overly hysterical at yesterday's US market decline should take some time to consider what a real drop looks like...

Brazil, daily

A net daily decline of -5943 (8.8%), settling at 61597, notably under the 200dma. The Dec'2016 low of 56828 looks vulnerable to being tested. Broadly though, the Brazilian market is still strong, having climbed from 37k in Jan'2016 to 69k in Feb'2017.

Beyond the short term political issues, the grander issue for Brazil are commodity prices. If commodities can climb across the second half of 2017, then the Bovespa should be able to challenge the 2008 historic high of 73920.

Q. Will we ever see such a daily decline in the next US bear market?

Its tough to imagine those at Print central ever allowing it. We know various Fed officials would start issuing threats of QE, with just a 10% correction spanning 3-6 weeks.
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I shall end today with a few tracks by Chris Cornell... who will be missed by many.



Seasons is a personal favourite, originally in the indie movie 'Singles', and later in 'Man of Steel'. During many hundreds of rainy afternoon walks, I have listened to that one.


Something lighter...




As ever, extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
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Pre-opex washout

US equity indexes closed significantly lower, sp -43pts at 2357. The two leaders - Trans/R2K, settled lower by -3.1% and -2.8% respectively. VIX settled +46.4% at 15.59. Near term outlook offers renewed upside into the opex/weekly close. Sporadic (and brief) washouts are to be expected, in what remains a powerful upward trend.


sp'daily5

VIX'daily3

Summary

Based on cyclical issues yesterday, I had expected the market to cool to sp'2393/90 this morning. Yet overnight 'Trump' chatter gave the HFT algo-bot's the excuse to washout much lower. The break into the gap zone of 2370/48 is a surprise, as that genuinely seemed to have become one of those rare 'breakaway gaps'.

Market volatility naturally jumped, with the VIX soaring into the mid teens, settling at the high of day in the brief 15mins of AH trading. Today's candle does look rather insane. Its notable that we've filled the big gap zone to the mid 14s
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A somewhat random news item, but it caught my attention...

So, according to the NY Fed, Q1 household debt has finally surpassed the pre-crash peak of 2008. Congrats to the American consumer, yes? This is a good sign of the underlying strength of the economy, right?
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Podcast from Coffey and Dr J'



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Will 'normal service' resume?

Broadly though, nothing has changed. We'll continue to occasionally see sporadic 0.25%, 0.5%, even 1-2% washouts, but the equity bears still won't likely be able to muster anything sustained. The underlying bid for equities (not least from the central banks) remains 'scary strong'.

I'll be the first one to sound alarm bells if the mid term trends are broken, and right now, that is still around 4% lower. I can't see that happening any time soon, can you?

Goodnight from London
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*extra charts in AH (usually after 8pm EST) @ https://twitter.com/permabear_uk

Reading around

US equity indexes closed moderately mixed, sp -1pt at 2400 (intra high 2405). The two leaders - Trans/R2K, settled -0.1% and +0.1% respectively. VIX settled +2.2% at 10.65. Near term outlook offers brief cooling to 2393/90. More broadly, a May settlement in the 2410/20s remains well within range.


sp'daily5

VIX'daily3

Summary

It was another day for the equity bulls, with new historic highs in the Nasdaq comp' and sp'500. Some cooling to 2393/90 zone looks due, before choppy upside into this Friday's opex.

Market volatility remains very subdued, with the VIX firmly stuck sub-teens. Does anyone seriously think we'll see the VIX >20 this summer? There is simply no threat of it, other than via something 'nuclear' in Asia.
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Reading around

I read around far less than I used to. As you might realise, I'm writing a great deal, and I just don't have the free time that I used to. I do however make a point of periodically browsing most of the sites/blogs I have listed on this very page.

I am still seeing a lack of capitulation. There are some notable names whom the market has yet to break. A number of infamous sites/blogs need to disappear before Mr Market is arguably satisfied. I could name names... but you can probably guess the ones I am thinking of.

Yours truly will remain bullish until the mid term trends in both the US - and most other world markets, have been broken and closed under. That looks at least 3-4 months away, if not spring 2018.

Goodnight from London
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