US equity indexes closed moderately weak, sp -6pts @ 2132 (intra low
2114). The two leaders - Trans/R2K, settled u/c and -0.9% respectively. VIX settled +4.9% @ 16.69. With the break of sp'2119 and Dow 18k, near term outlook is bearish,
until the market can break and hold the sp'2170s.
spdaily5
VIX'daily3
Summary
First, lets be clear, the break under sp'2119 and Dow 18k is unquestionably bearish.
Yet, the daily index candles were of the hollow red reversal type.. and that leans bullish.
The VIX daily candle settled black-fail - with a topping spike, and that favours the equity bulls.
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Its clearly a very mixed picture. The break of recent key lows is arguably more important, and thus I'm leaning bearish. The soft threshold of sp'2150 used to be support, but that will now act as first resistance.
Unless the market can trade into the sp'2170s, the door will remain open to another 3% of downside to test the 200dma, around sp'2070/60s - with Dow 17600/500s, by the time of the US election in early November.
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**Bonus chart: Nat' gas, monthly
I rarely get around to highlighting Natural Gas. Today's inventories leaned bullish, and we saw Nat gas hit $3.37, the highest level since Dec' 2014. A move to $4 looks rather easy, the only issue is whether we see a cold winter, in which case the $5s will be seen.
US equities closed moderately mixed, sp +2pts @ 2139. The two leaders -
Trans/R2K, settled -0.4% and u/c respectively. VIX settled +3.6% @ 15.91. Near term outlook offers
upside to challenge the 2161/63 gap zone before the weekend.
sp'daily5
VIX'daily3
Summary
It was not exactly the most exciting day, with a trading range of just 13pts. The close of sp'2139 should not exactly inspire the bulls, but neither did it offer the bears any follow through from the Tuesday decline. Overall price action remains... messy.
VIX managed a second consecutive net daily gain, but we're still only talking about a VIX in the mid teens. Just 3-4 years ago.. the mid teens would have been a typical floor... now its a typical cycle high.
I will note, if the week ends on a bearish note.. with Dow <18k, and sp <2119... that would bode for another 3% of downside into early November. I've seen a lot of 'crash chatter' today, and its somewhat ironic that some people are using the C word to describe a possible 3-5% down wave.
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I read around a lot, am subscribed to a fair few things, and this morning I noticed this...
I like the interviewer - Hunter, he is pretty good, and always gives his guests the time to say what they want. The guest - Holder, is usually interesting to hear.
Today's comments though, were classic Gold bug crazy talk.
First, the issue that a number of high profile 'end of the world' callers keep pushing their dates out. Holder's defence that at least it inspires some to prepare, I can almost kinda understand. But still... the system collapse callers have been issuing dates for the better part of a decade.
Second... and far more bizarre... the notion that 'price doesn't matter' when it comes to buying Gold and Silver. Really? I would merely ask Holder to tell that to anyone who was chasing the metals higher during the spring 2011 bubble.
Does Holder seriously think those who bought Gold in the $1900s, or Silver in the high $40s are remotely pleased right now? Many are understandably outright mad as hell, others have no doubt had to sell at a considerable loss to raise cash.
I myself am long term bullish for the precious metals, but even on the most optimistic inflationary outlook, its going to take at least another 2-3 years for the metals to be trading at, or above the 2011 historic highs.
US equities closed broadly weak, sp -26pts @ 2136 (intra low 2128). The
two leaders - Trans/R2K, settled lower by -0.6% and -1.8% respectively.
VIX settled +14.8% @ 15.36. Near term outlook offers renewed equity upside, at least to the 2161/63 gap zone.
sp'daily5
VIX'daily3
Summary
A far more interesting day in market land, as equities saw the first significant decline in around a month. The break into the sp'2120s was a surprise.
The afternoon saw a rather clear floor of sp'2128... with a moderate closing hour recovery. It'd seem we'll see 2145 tomorrow morning... a little chop. Then its a case of whether the FOMC minutes will be enough to grind the market to a close in the 2150s.
On balance, today really didn't change anything. Few noticed.. but Copper and WTIC oil prices both held up rather well, certainly relative to the broader market and strengthening dollar.
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USD, weekly2
As noted on the chart, the scenario will need to get trashed on any move into the DXY 98s, which would be decisively above the July 25th high of 97.62. Any move >DXY 100 would really change the bigger picture. We shall see.
