There are no good choices

US equity indexes closed moderately weak, sp -6pts at 2429. The two leaders - Trans/R2K, settled lower by -0.3% and -0.1% respectively. VIX settled +3.8% at 10.45. Near term outlook offers further weakness to the sp'2410s,  the 2400 threshold should hold, even if the UK election result is an upset.


sp'daily5

VIX'daily3

Summary

It was a day of moderate swings, but with the market leaning on the weaker side. The sp'2410s seem very probable. Any sustained price action under the 2400 threshold looks very unlikely.

Market volatility remains subdued, with the VIX still broadly stuck in the 10/9s. The 11/12s seem probable later this week.
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There are no good choices

For those in the USA, this Thursday, there will be a UK general election, where all 650 districts vote for their representative.

There is no direct public vote for the prime minister. Each party will select (via various internal systems) their leader. The party with a majority gets their leader to be the Prime Minister.

It remains notable that unlike the US President, the UK leader has little executive power, aside from security/defence matters. I have always found it truly ironic that the US Presidency - in many ways, is effectively a Kingship system.


So... what are my choices this Thursday?

Liberal Democrats, a weak blended version of conservative and labour. No vision of anything.

Conservative Party, currently lead by May, a woman who doesn't believe in the right to privacy. Indeed, just this past Sunday morning, what was the theme she decided to run with? Ohh yeah, blame the internet for another terrorist attack. She even used one of the social justice warrior phrases of terrorists having a 'safe space'.

Naturally, being a conservative, she has a particular interest in other people's sex lives, and what should be allowed. Her voting record in terms of equality is pretty nasty. http://www.independent.co.uk/news/uk/politics/theresa-may-lgbt-rights-gay-commons-vote-same-sex-marriage-gay-adoption-tim-farron-a7702326.html  

I've no doubt that if May had her way, there would be a camera and microphone in every single room in every UK household. Of course, there would be exceptions to such surveillance for members of the political class. We're well on the way towards that dystopia.
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Labour Party: lead by Jeremy Corbyn, a man who continues to tout the virtue and success of Hugo Chavez of Venezuela. Do I really need to get into that? Should I focus on the starving people, the decaying oil/gas infrastructure, or just the hyperinflation?

UKIP: a one issue party, which would like the UK to be a whites only nation. They sure won't say it, but that is what their party is largely about.

Green Party: another one issue party, vehemently against anything related to 'free market capitalism'. If they had their way, they'd close the capital markets. No doubt, they'd also likely tout Venezuela as a system to aim for.


So, which of those five do I choose?

None of the above

For the record, I shall hope for a hung parliament - where no one party has an outright majority. If the ruling conservative party majority is negated, its very possible May will resign in disgrace this Friday. After all, it was her decision to call an election, three years ahead of what was required. I expect to see a great deal of bitching and infighting between the parties, especially on the matter of BREXIT negotiations with the European Parliament. The British people deserve nothing more... nothing less.

Goodnight from London

It is easier to be...

US equity indexes closed a little weak, sp -2pts at 2436. The two leaders - Trans/R2K, settled lower by -0.2% and -0.6% respectively. VIX settled +3.3% at 10.07. Near term outlook offers choppy downside to the 2410s. The 2400 threshold should hold into next week's FOMC, when rates are set to be raised.


sp'daily5

VIX'daily3

Summary

The week began on a somewhat subdued note, leaning on the weaker side, with a trading range of a tiny 5pts.

Volatility itself remains subdued, with the VIX opening in the 10s, cooling into the 9s, and settling in the low 10s. The 11s seem due this week, 12s on a stretch.
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In the trenches

I have often used military analogies to being a trader in this twisted casino. Yours truly resides in the metropolis of London, a capital that is under threat. Its not exactly a new situation of course, the IRA (significantly funded by Americans) would periodically blow up parts of the city. The recent names and faces are different, but the outcomes are much the same.

see: https://en.wikipedia.org/wiki/List_of_terrorist_incidents_in_London

Its a long list... and its only going to get longer.
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This scene came to mind this weekend...




... and its absolutely more 'true' lately.

yours... sleepless in London
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Weekend update - World monthly indexes

It was a very mixed month for world equity markets, with net monthly changes ranging from +4.4% (UK), +1.4% (Germany), +0.3% (USA, France), -1.2% (China), to -6.1% (Russia). Mid term outlook remains bullish, not least as the central banks keep hitting the buy button.


Lets take our monthly look at ten of the world equity markets

USA - Dow

The mighty Dow climbed 68pts (0.3%), settling at 21008. With June underway, we've broken a new historic high of 21225. The key 10MA has climbed to the 19900s. Upper bollinger is offering the 21700/800s in the near term. Certainly, 22k now seems viable as early as late July.

Best guess: upside across the summer, with the 22000s no later than September. No retraces bigger than 5-7% this year. A year end close in the 23000s is viable, not least if GDP >2.5%, with the fed raising rates at least twice more.

Equity bears should arguably remain mute, unless the Dow is trading back under 20k. It is notable that 20k has many intersecting aspects of support. It does mark a critically important threshold into early summer. 
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Germany

The economic powerhouse of the EU , Germany, saw its DAX climb for a sixth consecutive month, settling +177pts (1.4%) to 12615. With June underway, there is already a new historic high of 12878. The 13000s are clearly viable within the near term. A year end close as high as the 15000s is now on the menu. Core multi-year support lies at 8k, which will surely hold in the next grand retrace of 30/50%.


Japan

The BoJ fuelled Nikkei climbed for a second month, +453pts (2.4%) to 19650. With June underway, we've broken above the giant psy' level of 20k. From the June 2nd close of 20177, next target is the June 2015 high of 20952, which seems viable in July/August.


China

The Shanghai comp' settled lower for a third consecutive month, -37pts (1.2%) at 3117. The Chinese market is indeed struggling. Things would turn very bearish with a break <3k, but frankly, the PBOC - at the behest of the communist leadership, will be actively fighting to prevent further downside. A mid term upward target of 4500/600 seems realistic by spring 2018.


Brazil

It was a rough month for the Bovespa, which settled -2691pts (4.1%) at 62711, although this was significantly above an intra low of 60314. Price action has been choppy, leaning on the weak side, since the Feb' high of 69487. Renewed upside seems probable, with big target of the 2008 historic high of 73920. Talk of 100,000 should have already begun, as sooner or later... commodity prices are going to ramp.


Russia

Russia equities were especially weak, with the RTSI -68pts (6.1%) at 1051. Choppy/weak energy prices remain a problem. Price structure is offering a large bull flag/pennant, which will be provisionally confirmed with any price action >1200. A monthly close in the 1200s will offer grander upside to 1500/1700 in the first half of 2018.


UK

The FTSE climbed a rather powerful 316pts (4.4%) to 7519, having made a new historic high of 7586. The 8000s seem a given this summer. Grander upside to at least 10k seems due, as 7k is now core support. If the next bear market for the UK is on the order of 50%, with 7k to hold, that would mean the FTSE has to climb to 14/15k before it maxes out.

Thursday June 8th will see the UK populace vote. The ruling conservative (aka, soft-republican) party thought it was a good time to call a vote as the polls showed them leading by around 20pts. The irony is that a recent poll is suggestive the lead is now effectively gone. A 'hung parliament' is a valid possibility. Current Prime minister May will have two choices, to resign in disgrace on her poor decision to call an election 3 years ahead of schedule, or to stay... but have no adequate working majority to push policies through. 

My guess? Its tough to call, but if the recent poll is correct, then Thursday night will be rather entertaining to watch. If no outright winner, or far worse.. a Corbyn victory, then FTSE could briefly implode by 5-7%, but in theory... it should hold 7k. No doubt, the BoE will on standby to intervene if the UK capital market is upset with the result.


France

The CAC climbed for a fourth consecutive month, +16pts (0.3%) to 5283. The settling May candle was a black-fail, with a topping spike. This bodes bearish near term. The recent breakout >5k remains massively bullish though. The 6000s remain probable, even if June cools to the 5200/100s. Any price action <5k looks very unlikely, not least as the ECB are still juicing the EU capital markets.


Spain 

The IBEX climbed for a fourth consecutive month, +164pts (1.5%) to 10880. A test of giant resistance around the 12k threshold appears due within 2-4 months. Any monthly closes >12k will offer upside to 15/16k in early 2018. At that point, a double top will be a serious threat.


Australia

The Australian equity market had a rough month, settling -186pts (3.1%) to 5761. However, much like the French market, the recent breakout remains the important issue. That should hold, with further upside to challenge the 2007 historic high of 6873 seemingly a given.
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Summary

It was a particularly mixed month across world equity markets, but all markets are holding within broad upward trends.

The US and German markets remain strongest, with the BRICs of Brazil, Russia, and China lagging. The latter are clearly struggling (in part) due to weakness in commodities.

For now, there is still zero reason to expect a mid/long term top. If commodity prices pick up, most markets will accelerate to the upside.
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Looking ahead 

M - Prod'/costs, PMI/ISM serv', factory orders
T -
W - EIA Pet' report, consumer credit
T - weekly jobs, EIA Nat' gas

Thursday will be somewhat interesting, as there is a UK general election. The result will be known by the Friday US market open. Further, ex-FBI Comey is set to testify.

 F - wholesale trade

*with the FOMC due to meet June 13/14th, the blackout period is in effect, and no voting fed officials are scheduled.
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Have a good weekend

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