Pre-tariff gains

US equity indexes closed broadly higher, sp +23pts (0.9%) at 2736 . The two leaders - Trans/R2K, settled +0.6% and +1.2% respectively. VIX settled -7.2% at 14.97. The s/t cyclical setup for Friday offers a cooling wave, but regardless, m/t outlook remains bullish to 2950/3047.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, but the gains were rather shaky. After some chop, the market clawed upward into mid afternoon, breaking a new high of 2735 with the FOMC minutes. After a few swings, the market resumed upward into the close.Volatility was a little mixed, seeing a high of 16.22, but with the VIX settling in the upper 14s.
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China tariffs

A new set of tariffs will begin on Friday. The rate will be 'up to 25%', on $34B of US goods. For now, the numbers remain trivial. Yes, certain individual companies could be hit hard, but overall, its still a minor economic issue. It is arguably the case that China needs the US more, than the US needs China. It might perhaps explain the ongoing weakness in the Shanghai comp'....

Not a great July, breaking a new low for the year of 2722, with no real technical support until the Feb'2016 low of 2638.
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Closing hour drama

US equity indexes closed on a very weak note, sp -13pts (0.5%) at 2713. Nasdaq comp' -0.9% at 7502. The two leaders - Trans/R2K, settled -0.8% and +0.3% respectively. VIX settled +3.5% at 16.14. Near term outlook offers Thursday cooling. Most bearish case would be 2671.


sp'daily5

VIX'daily3

Summary

Opening moderate gains, and then a great deal of minor chop... to be expected for a lead into a holiday break. However, there was closing hour drama, as a Chinese court ruled against Micron (MU), and that literally dragged the entire market lower. The closing hour was indeed ugly, seeing a low of 2711.

Volatility was in melt mode until the equity closing hour drama, with an upward spike to settle the VIX a little higher in the low 16s. If sp'2698 is broken early Thursday (the s/t cyclical setup offers it), then old target of 2671 will be viable. 

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Enjoy the holiday break!

*the next post will appear Thursday, by 6pm EDT.
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Daily reversal

US equity indexes closed on a broadly positive note, sp +8pts (0.3%) at 2726. The two leaders - Trans/R2K, settled +1.0% and +0.7% respectively. Near term outlook offers upside across holiday week. Things will turn very bullish >sp'2754.


sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, with an early low of 2698 - back to last Monday's low. The opening 30/60min candles for equities and VIX offered clear reversals. The rest of the morning was choppy, but each micro down wave was negated. The afternoon saw the sp' turn moderately positive.

Volatility saw an opening high of 18.08, but then cooled, with the VIX settling in the mid 15s. Near term outlook offers equity upside for the half-day Tuesday session.
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Bonus chart: China, monthly

It was a very bearish start to July/Q3/H2, with the Shanghai comp' settling the day -2.5% at 2775. Its technical 'open air' to the Feb'2016 low of 2638. Not pretty.

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Goodnight from London
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