Ugly Thursday

US equity indexes closed powerfully lower, sp -100pts at 2581, notably breaking the Tuesday morning low of 2593. Dow -1032pts (4.1%) at 23860. Nasdaq comp' -274pts (3.9%) at 6777. The two leaders - Trans/R2K, settled -3.8% and -2.9% respectively. The VIX settled +20.7% at 33.46.


sp'daily5

VIX'daily3

Summary

US equity indexes opened a little choppy, but then started to slide... and just kept on falling. It was frankly... a damn ugly day, with the sp' breaking the Tuesday morning low of 2593, settling at 2581. This is 291pts (10.1%) below the Jan' high of 2872. We're seeing a main market correction for the first time since Jan/Feb'2016.

With equities powerfully lower, volatility naturally picked up. However, its notable that the VIX settlement in the 33s, is way below the Monday afternoon high of 46.34. Its one of a number of divergences, that subtly suggest that the most bearish equity downside was on Monday afternoon.

I can understand if some are getting seriously spooked, and wondering if we're in some kind of far larger crash wave. All of this... sparked by mainstream chatter about average earnings +2.9%, and the US 10yr >2.80%. I will add, even yours truly is starting to get just a little bit twitchy.
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Bonus chart: China, monthly

The Shanghai comp' is currently -6.3% at 3262, the lowest level since Aug'2017. Are the PBOC on holiday or something? China bulls should be desperate to see a recovery to at least settle February above the 10MA in the low 3300s.

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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Wednesday swings

US equity indexes closed moderately mixed, sp -13pts (0.5%) at 2681 (range 2684/2727). The two leaders - Trans/R2K, settled +0.3% and +0.1% respectively. VIX settled -7.5% at 27.73. Near term outlook offers further chop, but leaning upward, with the Tuesday low of 2593 increasingly secure.


sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, but then swung significantly upward from 2684 to an intra high of 2727. There was a late day cooling wave, even breaking a new intraday low of 2681. The daily candle bodes for (at least) early Thursday weakness. Price action is pretty choppy, but distinctly less than the previous two days. Its really a case of the market in a stabilisation phase.

Volatility cooled for a seconday, with the VIX settling in the 27s. This is notably still an elevated level, and even today's close is way above the 2017 peak of the 17s.
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Bonus chart: Japan, monthly

I realise many of you don't care (although you should), but the Nikkei is currently net lower for the month by -6.3% in the 21600s. So long as 21k holds... m/t bullish. I would acknowledge, that you could count 5 giant waves from the key low of Oct'2008. Those holding a broadly bullish outlook for global equities should be carefully monitoring the Japanese market.
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Another day closer to the green shoots of spring

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Turnaround Tuesday

US equity indexes closed significantly higher, sp +46pts (1.7%) at 2695 (range 2593/2701). The two leaders - Trans/R2K, settled +1.7% and +1.0% respectively. VIX settled -19.7% at 29.98. Near term outlook offers further swings, but broadly... another multi-month push upward is due to big target of 2950/3047.


sp'daily5

VIX'daily3

Summary

US equities experienced another wild day, opening sig' lower, but then seeing a powerful opening reversal from sp'2593, surging to 2682, before a great deal of chop that stretched into afternoon. The closing hour saw a new intra high of 2695.

It was a truly INSANE day for volatility. The VIX printed 50.30 in pre-market, opened in the 41s, collapsed to the 22s, then hyper ramped to an intra high of 46.34, before cooling into the afternoon, settling in the upper 29s.


Q. Do we have a key cycle low of 2593 from sp'2872?

Difficult to say. Volatility remains very elevated, but if the bears can't achieve another swing lower within 2-3 days, then we have a secure floor. Even if we did break <2593, it'd likely only result in a marginal lower low, before still whipsawing upward.

Big target for the late spring/early summer remains 2950/3047, which is where we'll get stuck. Considering recent price action/volatility, it has to be considered that a far bigger correction of 15/20% is viable this summer. Even that won't take out of range my year end target of 3245, that still looks good.
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Meanwhile...

Space X saw a successful launch of Falcon Heavy, carrying Elon's personal Tesla Roadster.

The full webcast is highly recommended...


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Sunny... but with occasional snowflakes.

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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