Blaming the bears

US equity indexes closed powerfully lower, sp -86pts (3.1%) at 2736. Nasdaq comp' -3.5%. Dow -2.7%. The Transports settled -1.6%.

sp'daily5

VIX'daily3

Summary

US equities opened very significantly lower, pressured by other world markets, and ongoing turmoil within the oil market.

Meanwhile...

It would seem the US Govt' will also bailout the energy sector, at least to some extent. I'd still expect some of the mid/small tier listed names to disappear, such as NBR, DO, CHK, and probably.. RIG.

The afternoon saw considerable chop, leaning rather weak.
Volatility picked up, the VIX settling +3.6% at 45.41.


Blaming the bears

In Monday evening's Corona press conf', the US President blamed the collapse in WTIC on the commodity bears.

It has long been the case that Trump has taken issue with those on the short side. Even as early as the election rallies in 2016, Trump would occasionally take a few swipes at anyone 'bearish USA'.

I can kinda understand Trump trying to place blame, but it sure as hell doesn't lay with those shorting oil or the related energy stocks. The reality is that almost all of the US energy sector has been operating at a sustained loss for many years. All that talk about the successful US shale/fracking industry is one giant LIE. 

I expect more such 'blame the bears' talk from Trump in the weeks and months ahead. They are an easy target, and some in the mainstream will gladly play along with that notion, rather than face the reality that the US energy sector simply isn't competitive to the rest of the world.
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Sunset in the city of mass hysteria

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Goodnight from London
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Monday Madness in WTIC

US equity indexes closed very significantly lower, sp -51pts (1.8%) at 2823. Nasdaq comp' -1.0%. Dow -2.4%. The Transports settled -3.2%.

sp'daily5

VIX'daily3

Summary

US equities opened very significantly lower, and after an attempt that saw the SPX come close to turning positive, there was renewed weakness into the late afternoon, pressured by the bizarre price action in WTIC.

Indeed it was a case of Monday madness for WTIC, with the May contract (which settles Tuesday, 2.30pm EST), at -$37.63.

Indeed, it was a truly incredible and historic day in commodity land, and it will make for some sideline entertainment to see how the May contract settles Tuesday afternoon.

Volatility picked up, the VIX settling +14.9% at 43.83. I would note the break above s/t declining trend, and that argues against the notion of the sp'2900s.
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Your views...

Pretty evenly split.

A clear majority don't expect new historic highs this year.

Indeed, 46% believe the low is in. Only 11% expect a broad collapse. For the record, I would be surprised if we don't at least challenge the 2100/2000 zone, and in theory, that should be within 2-3 months.
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It was just another day... in the twilight zone.

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Goodnight from London
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Weekend update - US equity indexes

It was a positive week for most US equity indexes, with net weekly changes ranging from +6.1% (Nasdaq comp'), +3.0% (SPX), +2.2% (Dow), +0.6% (NYSE comp'), to -0.04% (Trans).


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

sp'500

The SPX climbed for the third week of four, setting +84pts (3.0%) to 2874, having printed 2879 in Friday's closing hour. I would note key price threshold in the 2940s, as the 2930/50 zone contains a number of other aspects of resistance.

At the current rate, weekly momentum will turn positive at the Monday Apr'27th open. However, best guess is the market will stall in the low/mid 2900s. Minimum downside target are the mid 2300s. Considering the break of mid/long term trend in March, an eventual move <2K could be expected.
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Nasdaq comp'

Dow

NYSE comp'

Trans

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Summary

Four US equity indexes settled net higher for the week, with one net lower.

The Nasdaq comp' lead the way higher, whilst the Transports was fractionally lower.

More broadly, four of the US equity indexes are still below their monthly 10MA, the exception being the Nasdaq comp'.
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Looking ahead

A busy week is ahead, not least with an increasing number of earnings, but also another truck load of Corona related news.

Earnings:

M - HAL, STLD, IBM, INFY, ALLY, EFX,
T - KO, SNAP, UAL, NFLX, TXN, TRV, LMT, IBKR, CMG
W - DAL, AA, KMI, T, LVS, LRCX, SAVE, BIIB,  CSX, PYPL, AMTD, NVS, STX, XLNX
T - DOW, PHM, FCX, CX, UNP, INTC, MMM, BX, LLY, AMZN, COF, DPZ, LUV, TAL, GNC, HTA, WST. WWE
F - AAL, VZ, DB, SNE, AXP, ON, TREE
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Econ-data:

M - Chicago Fed' nat' act' index
T - Existing home sales
W - EIA Pet' report
T - Weekly jobs, PMI manu', PMI serv', new home sales, Fed bal' sheet
F - Durable goods orders, consumer sent'.
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Final note

The big question is... does the equity market just continue to broadly climb from here, re-taking old broken mid/long term supports? Some, such as Piper Sandler, are seeking a year end target of sp'3600. Unless we see most, if not all of the indexes re-take their respective monthly 10MA, I have to see the market as mid/long term broken.

Clearly, the fed's trillions of QE are going to help patch over some of the economic/market wounds, but such stimulus can only do so much. It sure won't help entice people back into the cinema, the shopping mall, or least of all...a ship or plane. Neither will it be enough to reopen hundreds of thousands.... if not millions, of smaller businesses.

Whilst an economic recovery can be expected across Q3/Q4, it will be painfully slow, and the market will become increasingly frustrated. We have further interesting and wild times ahead.... in the twilight zone.

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*the next post on this page will likely appear 5pm EDT on Monday.