A mixed March

US equity indexes closed significantly higher, sp +36pts (1.4%) at 2641. The two leaders - Trans/R2K, settled +2.0% and +1.0% respectively. VIX settled -12.7% at 19.97. Near term outlook offers another rollover next week, the only issue is whether a daily close under the sp' 200dma.


sp'daily5

VIX'daily3

Summary

The market opened moderately higher, but the gains were shaky, and the Nasdaq even turned briefly negative. There was renewed upside that took the market to significant gains into the mid afternoon. The closing hour was naturally rather mixed, swinging from an intra high of 2659 to settle at 2640, notably well above the key 200dma.

With higher equities, volatility was crushed, with the VIX settling (if fractionally) under the key 20 threshold. The last five days of price action in the VIX threaten a bull flag, with a corresponding bear flag in equities. That does merit consideration for next week.


The March settlement...

The sp' settled net lower by -72pts (2.7%). Relative to February, we saw a lower high, but the March low of 2585 was well above the Feb' low. The settlement of sp'2640 is 44pts above the key 10MA of 2596. So, whilst we saw a second consecutive net monthly decline, it was not a bearish monthly close. Underlying MACD (blue bar histogram) cycle ticked lower for a second month, and a bearish cross is due in May. If we're to avoid that... the bulls are likely going to need to see the market back in the 2800s. 

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*the weekend post will appear late Friday/Saturday.

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Tomorrow is Thursday

US equity indexes closed fractionally mixed, sp -7pts (0.3%) at 2605. The two leaders - Trans/R2K, settled +0.1% and u/c respectively. VIX settled +1.6% at 22.87. Near term outlook offers further chop to conclude the month. If the 200dma is lost, there is a viable 5% of further 'trap door' downside.


sp'daily5

VIX'daily3

Summary

US equities opened a little choppy, saw an early low of 2593, and then battled upward to 2632. The gains were always shaky though, and the market saw renewed choppy cooling into the close. The market feels very weak, and a break of the 200dma appears increasingly probable. On balance, its more viable early next week than tomorrow.

With equities still leaning on the weaker side, volatility picked up (intra high 24.95), with the VIX settling in the upper 22s. If the market spirals lower on a break of the 200dma, then big VIX target would be 29/30.


Tomorrow is Thursday

Yes, Thursday obviously follows Wednesday. The issue I wish to highlight is that Thursdays do tend to favour the equity bears. Tomorrow will be complicated by the fact it is not just the end of the week, but the month and quarter. Its been a very mixed month, and as things are, its going to be a second month for the equity bears.

Even if tomorrow ends on a somewhat positive note, I'm still concerned we'll see a daily close under the 200dma in early April, with a washout to the legacy gap of sp'2474/61. Q1 earnings should come in broadly superb, and that would be the natural excuse for renewed upside.
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Bonus chart: Germany, monthly

I'd guess that Germany is also closed on Friday, so there is likely just one trading day left of the month. Clearly, the DAX is set for a bearish monthly close under the key 10MA. This does merit as an alarm bell. I'll cover the world markets in the weekend post.

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So much for the provisional floor

US equity indexes closed significantly lower, sp -45pts at 2612 (intra high 2674. The two leaders - Trans/R2K, settled -1.8% and -1.9% respectively. VIX settled +7.0% at 22.50. With bearish engulfing candles all over the place, near term outlook threatens a break of the Friday low... which has already happened in the Nasdaq comp', Trans, and R2K.


sp'daily5

VIX'daily3

Summary

US equities opened somewhat positive, and built gains to 2674. There was a latter day very significant swing lower, with the market in free fall in late afternoon, lead lower by the Nasdaq. With bearish engulfing daily candles for the Nasdaq comp, R2K, and Transports, it bodes for further weakness for the Dow and sp'500 tomorrow/Thursday.

VIX saw a morning break under the key 20 threshold, but it didn't hold for very long, and the VIX settled the day in the mid 22s. It could be argued s/t price structure is a baby bull flag. If correct, the 25/26s would likely be seen within 1-3 trading days.


So much for the 'provisional floor'.

Yesterday's gains were indeed powerful, but they've effectively been fully negated today, in three of the six main indexes.

Right now, the most bearish case is another 5% lower in the main market, to around the sp'2475/50 zone. Its notable there is one remaining legacy gap from Sept'11th 2017 of 2474/61. Even if that is briefly seen, I still expect subsequent new historic highs in another multi-week up wave, but it would viably be the last wave of the grand rally from March 2009. Such a final wave would put in a monstrously clear divergence between actual price, and underlying price momentum - as seen on the bigger weekly/monthly charts.

As things are, with two trading days left of the week/month/quarter, the bears are seizing control.There are other issues of course, not least how other world markets will settle the month. Right now, its still rather mixed, but with a notably weak German and Chinese market. Today's US weakness will likely carry across to Asia/Europe, and that sure won't help the monthly settlement levels.
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Late afternoon sunshine for the bears

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

Goodnight from London
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