Permabear Doomster

Wednesday, 25 April 2018

Midweek swings

US equity indexes closed rather mixed, sp +4pts at 2639. The two leaders - Trans/R2K, settled +1.0% and -0.2% respectively. VIX settled -1.0% at 17.84. Near term outlook still offers weakness to sp'2604, before whipsawing upward into/across May.

sp'daily5

VIX'daily3

Summary

US equities opened fractionally higher, but saw an immediate reversal, with a morning low of 2612. From there, a great deal of chop, leaning upward in the afternoon to 2645, and settling at 2639. Near term outlook offers one final wave lower to around 2604, before whipsawing back upward.


Santelli, noting bond yields continue to claw upward

Volatility was choppy, opening at 18.14, and climbing to 19.84, before cooling into the close. Sustained VIX >20 looks unlikely in the near term.
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Tuesday, 24 April 2018

Yields used as an excuse

US equity indexes closed significantly lower, sp -35pts (1.3%) at 2634 (intra range 2683/17). The two leaders - Trans/R2K, settled -2.1% and -0.5% respectively. VIX settled +10.3% at 18.02. Near term outlook offers a full gap fill to sp'2604, before swinging back upward.

sp'daily5

VIX'daily3

Summary

Yesterday saw the sp'500 settle with a black-fail candle. Indeed, many individual stocks (including CAT) settled Monday with a black-fail candle. Those are inherently subtle warnings of s/t bullish exhaustion, and lean to the bears. Not always... but often.

Today opened moderately higher, with an early high of sp'2683, but with the 10yr yield hitting 3.00%, the sellers started to appear...


Santelli noticing the 10yr finally testing 3.00%

Lets be clear though, today's weakness was nothing especially dramatic. The VIX didn't even hit the key 20 threshold. Indeed, if you looked at the daily chart for the sp'500 yesterday, you should have noticed we had a handful of downside equity price gaps due to be filled. Today's yield at 3.00% was just used as an excuse the market needed for some sig' cooling, before swinging back upward.

If Wed' opens higher, I'd look for renewed cooling to around sp'2604, with VIX 19/20s, whether tomorrow or Thursday.
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US 10yr bond yield, monthly

Regardless of the s/t, a move to at least 3.50-3.75% looks due on a 3-12mth outlook.That will clearly be a downward pressure on equities, but that doesn't necessarily mean equities will be net lower by year end/early 2019.

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Monday, 23 April 2018

The lone maniac strikes again

US equity indexes closed a little mixed, sp' +0.15pts at 2670.29. The two leaders - Trans/R2K, settled +0.4% and -0.1% respectively. VIX settled -3.2% at 16.34. Near term outlook is uncertain, and will be dependent on the 10yr yield, and whether the mainstream can cope with >3.00%, or are briefly upset.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, and it remained very subdued. There was moderate cooling in the mid afternoon, with the Friday low broken under, but settling above. The settling black-fail candle does lean s/t bearish, and we still have three partly unfilled downside gaps to 2604.

It was a mixed day for volatility, seeing a morning peak of 17.56, but despite equities breaking a lower low in the afternoon, the VIX didn't pick up, and even settled fractionally lower in the16s.
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The lone maniac strikes again

Micron Tech' (MU) was moderately higher in pre-market, trading a little better than the main market. Then the lone maniac, aka Timothy Arcuri of UBS appeared once again, touting cyclical/dram concerns. His target on Micron is $35, which is a very considerable way lower, even below the key 200dma.

see: https://seekingalpha.com/news/3347591-micron-minus-1_7-percent-ubs-analyst-sees-weak-2019-nand-dram

Indeed, the same guy appeared just a few weeks ago... see: https://www.barrons.com/articles/buy-intel-dump-micron-advises-ubs-1522963364

The retail amateur (yours truly included) doesn't stand a hope in hell against this kind of sporadic nonsense from one of the 'smart guys' from a recognised (if partially failing) institution.

Keep in mind, Nomura-Instinet and Robert W. Baird are both seeking $100, with Cowen $65, and Mizuho at $70. QCOM and INTC have earnings this Wed' and Thurs' respectively. Both should come in fine, and should offer another reminder that 'cyclical concerns' for the semi-conductor industry are grossly misplaced right now.

MU, monthly

Suffice to add, Micron stock remains m/t bullish, but having lost psy'50 (again), next giant support isn't until the breakout threshold of $36/37s. For now, annual EPS of around $11 isn't seen as worth much by Mr Market. Truly. Bizarre.
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No sunshine for the Micron Bulls.