Short term top

US equity indexes closed moderately mixed, sp +1pt at 2732. The two leaders - Trans/R2K, settled -0.5% and +0.4% respectively. VIX settled +1.7% at 19.46. Near term outlook offers a basic retrace of 2.5% to around sp'2670. More broadly, big target remains the sp'2950/3047 zone.


sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, but then built moderate gains into late morning, breaking a new cycle high of 2754, some 222pts (8.8%) above last Friday's low. Pretty incredible. The 2754 high does appear to be a short term top, with the sp' seeing distinct cooling to fractionally negative in the afternoon.

Volatility opened fractionally higher, but cooled into the 12pm hour. With equities cooling in the afternoon, the VIX swung significantly upward.

Best guess: equity cooling to around sp'2670, which should see the VIX back in the 25/30 zone. More broadly, m/t bullish, with big target of sp'2950/3047 by late spring/early summer. Then things will get 'really interesting'.
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Sunshine to conclude a powerfully bullish week

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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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