Troublesome tweet

US equity indexes closed moderately mixed, sp -14pts (0.5%) at 2642. The two leaders - Trans/R2K, settled -0.3% and +0.2% respectively. Near term outlook offers Thursday weakness, but the sp'2600 threshold should hold.


sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, directly pressured via...

Regardless of whatever you might think of the US President, such comments did unquestionably upset the US/world capital markets in early morning. I'll merely add that I see such a tweet as 'troublesome'.

Despite pre-market significant declines, equity bears couldn't manage much of anything, and we even saw some of the indexes turn fractionally higher in early afternoon. There was some natural late afternoon weakness, as some of the more cautious bulls closed out on concerns of possible overnight missile launches.

VIX was pretty subdued across the day, settling lower for a second day, but still broadly holding the key 20 threshold.

The outlook for Thursday leans bearish, but we shouldn't see any price action <2600, where the key 200dma is soon to reach. Earnings - which should be superb, are set to start pouring in this Friday with C, JPM, WFC, and PNC.

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The swings continue

US equity indexes closed significantly higher, sp +43pts (1.7%) at 2656. The two leaders - Trans/R2K, settled higher by +1.1% and +1.9% respectively. VIX settled -6.0% at 20.47. Near term outlook threatens another wave lower, but the 200dma (sp'2595) looks secure.


sp'daily5

VIX'daily3

Summary

The powerful equity swings continue, with today seeing equities open sig' higher. The market climbed to 2662 in the 11am hour, then briefly fell to 2635 on another sporadic Cohen-related news headline. There was a fair amount of chop in the afternoon, but the market did manage a new intraday high of 2665, before some moderate cooling.

Meanwhile, it was a day of moderate chop for the VIX, seeing an opening reversal, but then melting lower in the afternoon. Its notable that despite significant net equity gains, the VIX still managed a close above the key 20 threshold. 

Near term outlook offers another cooling wave, perhaps as low as around the sp'2600 threshold. However, unless VIX can break >26, with sp' seeing a close under the 200dma, the broader outlook still leans to the bulls. Earnings are set to start pouring in, and those will be a reminder that the US economy is far from recession.

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Failed gains

US equity indexes closed a little mixed, and significantly below their highs, sp +8pts (0.3%) at 2613 (intra high 2653). The two leaders - Trans/R2K, settled -0.3% and +0.1% respectively. VIX settled +1.3% at 21.77. Near term outlook offers Tuesday weakness.


sp'daily5

VIX'daily3

Summary

US equities began the week with a significant bounce from the Friday close of sp'2604, climbing to an early afternoon high of 2653. However, there was then a rollover, and things increasingly spiralled lower, not helped by news of an FBI raid on the office of Trump Lawyer Cohen.

The daily candle is of the black-fail type, with a clear spiky top, indicative of a failed rally/bullish exhaustion. It bodes bearish for at least part of Tuesday. The ultimate issue is whether the market will fail to hold the 200dma (sp'2594).

Volatility saw a mixed day, and with late day equity weakness, the VIX settled a little higher in the 21s.Things only get interesting if >26s, which would offer the 29/30 zone.


Bears running out of time

Earnings are set to start pouring in. Certain stocks - such as CAT, have price structure of a giant bullish pennant. Today's settling black-fail candle though is an immediate concern for Tuesday. CAT hasn't seen any daily closes under the 200dma ($135s) since March 2016.

CAT, daily

Any price action in CAT above the 50dma (currently $153s) would be decisive, and offer new historic highs this summer. That is clearly the most bullish 'rainbows and unicorns' outlook, but price structure IS a bullish pennant.

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