Daily Wrap

US equity indexes closed moderately mixed, sp -0.4pts @ 2090. The two leaders - Trans/R2K, settled lower by -0.3% and -0.1% respectively. VIX remained in cooling mode, -3.4% @ 13.43. Near term outlook threatens a minor wave higher to attempt to clear the sp'2100 threshold, but it should fail.


sp'daily5

VIX, daily3

Summary

A day of very minor chop, much like the price action of May 20th/23rd. There is clearly threat of another minor lurch higher, but broadly... we're seeing increased selling as we're close to the sp'2100 threshold.

Price action remains much the same since summer 2015. A big move is coming, as many are starting to recognise.

--
Update on the USD, weekly

The DXY 91s mark a clear spike low. Underlying MACD (blue bar histogram) is set for a bullish cross within 2-6 trading days.

The market is trying to price in a possible second rate hike - which is inherently bullish for the USD, although I'm still highly dubious the Fed will raise until the Dec' FOMC.

What should be clear, any price action above the double top of DXY 100, and the door will be wide open for a straight run to the 120s. That would have a great many implications for just about everything.
--


Looking forward to a three day weekend

Its been a tiresome week, not least as I've been battling to build my new home site, but also to keep this page (and a few others) routinely updated.

Once the GDP data is out of the way tomorrow, by 11am, price action will likely be even more muted that today's narrow range of 7pts (0.3%).

Yes.. Yellen is speaking, but its just an award ceremony, and I'm bemused that the mainstream seem to be giving it so much attention. Do they really expect Yellen to give a long speech on monetary policy?

Goodnight from London

Daily Wrap

US equities settled broadly higher for a second consecutive day, sp +14pts @ 2090 (intra high 2094). The two leaders - Trans/R2K, settled higher by 0.8% and 0.5% respectively. VIX remained in cooling mode, -3.6% @ 13.90. Near term outlook is extremely borderline, as the sp'2100 threshold remains major resistance.


sp'daily5

VIX'daily3

Summary

So, a second day of equity gains, with the VIX continuing to cool from last week's high of 17.65.

With a three day holiday weekend approaching, price action will be leaning on the quieter side, and that will favour the equity bulls.

A move back above the key VIX 20 threshold looks inevitable in June, but then, are we only looking at a brief foray to the low/mid 20s, before renewed equity upside (to new historic highs) across the summer?

--

Market chatter from the Schiff




--
Three days left

With next Monday CLOSED in the US market for Memorial day, my attention is increasingly focused on how the month will settle.

sp'monthly2 - boll/Keltner

I highlight the above monthly chart as I see some people posting overly bearish downside targets for June.

As I often like to say... first things first.

First, the equity bears need to break last week's low of sp'2025, then the giant psy' level of 2K, and then show some downside power to the low 1900s.

Indeed, across June, the lower monthly bollinger will be around 1930/20s. Any initial break <1900 looks overly difficult.

The lower Keltner band will be offering first viable chance of the low 1800s in July.

...and of course, any break above sp'2134, with Dow >18351, would negate ALL bearish targets, and open up an entirely different outlook, the far more scary inflationary scenario.

Goodnight from London

Daily Wrap

US equity indexes closed significantly higher, sp +28pts @ 2076, with the two leaders - Trans/R2K, higher by 0.6% and 2.1% respectively. The VIX was naturally ground lower across the day, settling -8.8% @ 14.42. The mainstream mood is back to almost maximum complacency, as rate hikes and a BREXIT vote are no longer seen as a problem.


sp'daily5

VIX'daily3

Summary

It was a pretty damn bizarre day in market land, with even some of the cheerleaders on clown finance TV recognising that the degree of gains were not remotely justified.

It is understandable that some of the bull maniacs are now seriously looking for a break back into the sp'2100s, broadly higher across the summer, and indeed... the rest of 2016.


Yet... has anything really changed?

Today's gains do nothing, as the market remains stuck in a relatively narrow trading range. Aside from a few brief forays >2100, and the two down waves to the 1800s, the market has been broadly stuck in a 4-5% range for an entire year.

Trading ranges won't last forever... and whichever side we do break, will likely determine the market direction for many months.. if not years.


--
The bare bones view...

sp'monthly3c

We've been broadly stuck for an entire year (1.5yrs for the 'old leader' - Transports). The obvious break levels are >2134 and <1810.

Very few in the mainstream now consider the latter as remotely possible this year, and its that degree of near total complacency that should actually concern the bulls right now.

*I realise a fair few of the wave counters out there are calling the move from 2134-1810, a giant 4, with a fifth now underway. But hey... I'm not much one for counting this nonsense.
--


So.. what about the Fed/rates... and the BREXIT vote?

I'm still of the view the Fed will not raise rates ahead of the BREXIT vote, which many realise would be a very valid excuse for the market to at least cool (if briefly) back under sp'2K.

As for how the UK populace will vote (June 23rd), the outcome is likely to be pretty close - much like the Scottish independence vote in 2014. I'm still leaning on the conservative side.. which would see a 'STAY' outcome. Were that the case.. the market would rally.. at least initially.

--
Goodnight from London