I like to sleep soundly

US equity indexes closed significantly lower, sp -45pts (1.6%) at 2690. Nasdaq comp' -3.0% at 7028. The two leaders - Trans/R2K, settled -0.4% and -2.0% respectively. VIX settled +10.8% at 20.10. Near term outlook offers choppy upside into the Thanksgiving break, and then renewed weakness into end month.


sp'daily5

VIX'daily3

Summary

US equities opened moderately lower, and steadily cooled into the mid afternoon, seeing a low of 2681. There was a vain attempt at a latter day recovery, but the closing hour sure wasn't pretty.

Volatility picked up, with the VIX settling back above the key 20 threshold. S/t outlook will favour the equity bulls into the Wed'/Thanksgiving break.
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Bonus chart: Germany, monthly

With nine trading days left of the month, the DAX is lower for the sixth month of seven, currently -1.8% at 11244. Soft psy' support at 10k, and then the old double top (now core support) of around 8k. If you believe the DAX is going to 8k, you can have some confidence about which direction the rest of the EU markets will trade into 2019, and to some degree... the US market.


I like to sleep soundly

Last week saw some powerful upside in Natural Gas (NG) to $4.93, although it wasn't entirely surprising, as NG had broken and settled above core resistance of the $3.20s in mid October.

The past few days have seen a fair amount of coverage given to optionsellers.com, whose site has effectively 'gone dark'....

From what I gather, the company was leveraged short NG, via naked put writing. Effectively... losses could have been infinite.

Last week saw the fund not only lose ALL of its funds, but most (or all?) clients now have negative balances. Some will no doubt be able to throw more money to at least zero-balance their accounts, but not all.

If I've instilled anything of use to you across the past few years, it is hopefully the notion that if you want to sleep soundly at night, then no margin/leverage!

Across the many years, I've had some superb, and also horrific trades, but never have I had a sleepless night, worried about seeing my account balance turn negative. I simply never trade on margin, and I sure as hell sleep better for it.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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Weekend update - US equity indexes

It was a broadly bearish week for US equity indexes, with net weekly changes ranging from -2.2% (Dow), -2.1% (Nasdaq comp'), -1.6% (sp'500), -1.4% (R2K), -1.1% (NYSE comp'), to +0.6% (Trans). Outlook offers s/t choppy upside into Thanksgiving, and then resuming lower.


Lets take our regular look at six of the main US indexes

sp'500

The spx settled -44pts (1.6%) to 2736, having swung upward from a Thursday low of 2670. Note the macd (black line) at 1.774, and set to turn outright negative, for the first time since March 2016. The Oct' low of 2603 looks vulnerable in early December, with secondary support of the Feb' low of 2532.


Nasdaq comp'

The Nasdaq settled -2.1% at 7247. Price structure across the last four weeks could be argued is a bear flag, offering far lower levels into December. Support 6922, then the Feb' low of 6630.


Dow

The mighty Dow settled -2.2% to 25413. Note resistance around 26k, where the sellers have been appearing. Thanksgiving week offers a challenge to the 50dma in the 25700/800s, but regardless of any holiday week gains, further downside into early December appears probable. Support 24122, and then the April low of 23344. Any sustained price action under the 23300s would be suggestive of grander cooling to the giant 20K threshold.


NYSE comp'

The master index settled -1.1% to 12400. Note that the nyse comp' is one of two indexes that have recently traded under the Feb' lows. Support 11820, and then psy' 10K, near the June 2016 low of 9918.


R2K

The R2K settled -1.4% at 1527. Support 1459, and then the Feb' low of 1436. Technically, this index is mid/long term broken.


Trans

The transports was very resilient to the broader market, climbing for a third consecutive week, managing a moderate net weekly gain of +0.6% to 10583. S/t price structure could be argued is a bear flag. Support 9757, and then 9k. A sixth consecutive net weekly decline in WTIC is clearly helping to prop up transportation stocks.
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Summary

Five indexes settled sig' lower, whilst one settled moderately higher.

The Dow lead the way lower, whilst the Transports was resilient.

Price structure across the past four weeks is a viable bear flag, offering further very sig' downside into end month/early December.

YTD price performance:

The Nasdaq is holding a yearly gain of 5.0%, with the Dow +2.8%, and the spx +2.3%. The Transports is -0.3%, the R2K -0.5%, and the nyse comp' -3.2%.
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Looking ahead

Key earnings; JD, LB (Mon'), TGT, LOW, KSS, GPS, ADI (Tues'), DE (Wed')

It will be a very light 3.5 trading day week, and for most, it should be a case of 'turn your screen off, and come back Nov'26th.'

M - Housing market index
T - Housing starts
W - Durable goods orders, weekly jobs, consumer sent', existing home sales, leading indi', and the latest EIA Pet' and NG reports.

T - CLOSED, for Thanksgiving
F - Early CLOSE at 1.00pm EST
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Have a good weekend
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*the next post on this page will likely appear 5pm EST on Monday.

Opex chop

US equity indexes closed a little mixed, sp +6pts (0.2%) at 2736. The two leaders - Trans/R2K, settled -0.3% and +0.2% respectively. Near term outlook offers choppy upside ahead of the Thanksgiving break, but then a very bearish wave into end month.


sp'daily5

VIX'daily3

Summary

US equities opened moderately weak, but there wasn't any real selling behind it, and indexes quickly reversed. Trump trade comments directly saw the market spike higher in the 12pm hour, but those gains soon faded. The afternoon saw further chop... carrying into the weekend.

Volatility saw an opening high in the low 21s, and then resumed melt mode, settling in the low 18s.
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Bonus chart: Japan, monthly

The Nikkei is currently net lower for a second month, -1.1% at 21680, sitting on l/t rising trend. A Nov' close <20900s would be decisive, and offer soft support of around 19000. Note price momentum, which is increasingly negative.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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