Another day closer to BREXIT

US equity indexes closed moderately lower, sp -3pts @ 2115 (intra low 2107). The two leaders - Trans/R2K, settled lower by -0.2% and -0.6% respectively. VIX settled +4.0% @ 14.64. Near term outlook offers pre-FOMC downside to at least test the double low of sp'2085.


sp'daily5

VIX'daily3

Summary

A day of moderate weakness, but clearly.. nothing of any significance. Even a move to the recent low of sp'2085 looks out of range until early next week.

VIX remains broadly subdued, stuck in the mid/low teens, and it will likely take a break of the sp'2025 low to see the VIX test the key 20 threshold.
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Another day closer

The BREXIT vote is just two weeks away. The count will begin at 10pm BST (5pm EST) on Thursday June 23rd. The result should be clear before the close of US trading on Friday 24th.

Yours truly has the following ballot paper sitting on his dining room table.

I guess I should probably start thinking about sending this form back soon, with an X in the correct box.


How will the UK populace vote?

By definition, the UK populace lean on the conservative side of things. They don't much like change (even when its for a better outcome), and will be more inclined to vote to remain in the EU. However, the movement to leave is unquestionably more motivated and arguably... more inclined to vote.

The vote will likely be pretty close, with the outcome important not just to the UK equity/capital market, but to the wider EU.. and to a lesser extent, the US.

If the UK vote to leave, there will be at least some degree of initial upset/shock in equity land, and then its a case of whether that will be maintained, or whether the dip buyers will flood in once more.

If the UK vote to stay, we'd certainly see an initial equity relief rally, with the £ and € strengthening, and the USD cooling, with most equity markets rising 2-3%... on either the Friday.. or following Monday.

For the more conservative trader out there... holding long (or short) overnight Thursday will be fraught with massive risks (especially in FOREX land), but certainly... the vote also offers some interesting opportunities.

Goodnight from London

Daily Wrap

US equity indexes closed moderately higher, sp +6pts @ 2119. The two leaders – Trans/R2K, settled higher by 0.6% and 0.7% respectively. VIX settled +0.2% @ 14.08. The market has built almost 5% of downside buffer room, ahead of the FOMC/BREXIT.


sp'daily

VIX'daily

Summary

It was just another day of algo-bot upside melt, with a new multi-month high of sp'2120.55, a mere 14pts (0.7%) from the May 2015 high.

VIX remains broadly subdued, ahead of next week's FOMC, when (as most agree), the Fed will once again refrain from raising rates. This time they have excuse number 427 'lousy jobs data', along with excuse number 428 'looming BREXIT vote'.

All things considered, a down wave to at least briefly test the recent key low of sp'2025 looks due. If the market holds above that low, the VIX will not see any sustained action above the key 20 threshold.


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Macro chatter on China, Mr Long and Mr Smith



*the audio is a little off, but its worth sticking with.


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USD still cooling from the weak jobs data

weekly, 3yr

The market continues to believe the fed won't raise rates next week... nor in July (not least if Q2 earnings come in weak). Broadly, the USD remains stuck in a near 10% range since the first hit of the DXY 100 threshold in March 2015. The dollar doomers have nothing to tout unless a break <90.
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Goodnight from London

Daily Wrap

US equities closed moderately mixed, sp +2pts @ 2112 (intra high 2119). The two leaders - Trans/R2K, settled higher by 1.1% and 0.2% respectively. The VIX settled +2.9% @ 14.05. Near term outlook remains extremely borderline, as the market is on the edge of a major bullish breakout.. or the third epic fail since summer 2015.


sp'daily

VIX'daily

Summary

Today provoked a few flash backs to the algo-bot upside melt of 2013.

Equity bulls had a new multi-month high of sp'2119 to tout - a mere 15pts (0.7%) from the May 2015 high. Although it remains notable that most other indexes are still significantly below their historic highs.

Volatility remains bizarrely subdued in the low teens. A move to at least briefly test the key 20 threshold looks highly probable this month, especially around the time of the next FOMC (June 15th), and the BREXIT vote (June 23rd).


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The wave five scenario

First, to be clear, I'm no direct follower of Elliott wave, but I'm well aware of some of the outlooks currently being held. Most notable.. is the following count/theory...

sp'monthly1c

Effectively... if Jan/Feb' saw a C' wave complete.. we're soon to break up and away. Upside price target would be somewhere in the 2300/2500 zone (at min). However, an issue that is usually overlooked is the aspect of time.

If sp >2134 this summer... then at minimum, I would be seeking broader upside into spring 2017. However, based on the fact that wave'1 - March 2009-May 2011, spanned a full two years, if you simply extrapolate that from the recent lows.. that is more suggestive of upside into 2018...a clear 18 months.


Siegel on CNBC...

Talk of Dow 20K has resumed on clown finance TV. The one thing that Prof' Siegel is concerned about is if earnings fail to improve, current equity levels are arguably pricey.
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I would agree there are a truck load of threats to the market right now, but the market will do what it will do. There is no point fighting it, and if June closes broadly in favour of the bulls, then those bears who can't stomach being long should merely go into early hibernation... for a very considerable time.

Goodnight from London