A fifth day of gains

US equity indexes closed broadly higher, sp +32pts (1.2%) at 2731. The two leaders - Trans/R2K, settled higher by 0.7% and 1.0% respectively. VIX settled -0.7% at 19.13. Near term outlook offers chop into the opex/3 day weekend. A test near/at the recent sp'2532 low remains a high threat into end month.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, saw an early high of 2717, and then cooled back to around u/c. Yet again, the buyers appeared, pushing strongly upward into the afternoon. Today's high of 2731.51 is notably 198.82pts (7.8%) above last Friday's low.

Volatility saw a mixed day, seeing a high of 20.66, but settling lower for a fifth consecutive day in the low 19s. Considering a 3 day holiday weekend is ahead, the VIX will likely see further cooling on Friday.
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Bonus chart: Germany, monthly

With 9 trading days left of February, the DAX is currently -6.4% at 12346, notably still under the key 10MA. The German market is central to the EU, and how it settles the month should be seen as very important. Cyclically, its looking ugly, as a bearish MACD cross is due.
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Sunny skies for the equity bulls

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Temporal inflation hysteria

US equity indexes closed broadly higher, sp +35pts (1.3%) at 2698. The two leaders - Trans/R2K, settled +1.0% and +1.8% respectively. VIX settled -22.9% at 19.26. Near term outlook offers the sp'2710/20s, which is where we'll likely get stuck. A re-test at/near last Friday's low of 2532 is on the menu next week.


sp'daily5

VIX'daily3

Summary

In pre-market, the sp' was higher by around 13pts. Then the CPI data was released - m/m +0.5%, the algo-bots freaked out, and swung the market to -35pts or so. By the time the market did open, declines only amounted to -10pts. Once again, there was a distinct turnaround, with the sp' settling significantly higher.

Volatility saw a spike in pre-market to 25.72, but then melted across the day, settling back under the key 20 threshold for the first time since Feb'2nd.
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Rate hikes and inflation

The market is currently expecting 2-3 hikes this year. Yours truly is holding to 4 hikes.This morning's pre-market reaction to the notion of higher inflation is a sign the mainstream are still very twitchy. Ironically, this is the same mainstream that have been seeking inflation >2.0% for around a decade.

Ohh, and to be clear, if the Fed don't raise rates this March 21st, that would merit provisional alarm bells. For the moment, I still think they will, but each point lower in the sp'500... will lower the probability.

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Yet another turnaround Tuesday

US equity indexes closed on a somewhat positive note, sp +6pts at 2662. The two leaders - Trans/R2K, settled +0.8% and +0.3% respectively. VIX settled -2.5% at 24.97. Near term outlook offers further upside of 1.5-2.0%, then things get real tricky for the bulls, as a re-test of the hyper-spike low of 2532 is probable.


sp'daily5

VIX'daily3

Summary

US equities saw a day of moderate swings, seeing an early low of 2637, but then battling upward into the afternoon. The daily gain is just part of a rally that will likely take the sp' back into the low 2700s. The 50dma - currently at 2720, will offer prime resistance.

Volatility saw an opening high of 27.82, but then melted lower across the day, settling in the upper 24s. Further cooling to near the key 20 threshold looks due within the next few days, before a probable swing back to around 30/35.
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Bonus chart: Japan, monthly

The Nikkei is currently net lower for the month by a powerful -8.0% at 21244. Any sustained price action <21k would be a break of key support, and would merit alarm bells. If the BoJ are going to spool up the printers, now would be the time.

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Goodnight from London
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