Cooling into quad-opex

US equity indexes closed moderately mixed, sp -5pts at 2432. The two leaders - Trans/R2K, settled +0.2% and -0.5% respectively. VIX settled +2.4% at 10.90. Near term outlook offers further weakness to at least 2410. The 2390s - where the 50dma is lurking, would be 'best bear case', before another big push upward into Q2 earnings.


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VIX'daily3

Summary

US equities opened broadly lower - lead by the Nasdaq, with a morning low of sp'2418. There was then a rather typical latter day recovery.  Still, it was a second consecutive net daily decline for most indexes, and on balance, the market looks set for further weakness.

The VIX spiked to 12.01 in the morning, and then cooled into the afternoon. The 13/14s seem due with any price action to sp'2410/00, and certainly with the 2390s.

Friday is quad-opex, and such days are inherently choppy. If the market trades lower to 2410/2390, there will be extremely high probability of a key floor being put in, with yet another latter day recovery. Bears... beware.
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Bullish hazy summer sun

Meanwhile... in the metropolis

Some of the populace are starting to get real pissed, as the Grenfell Tower fire story continues to develop. There are a great many issues involved, not least the lack of sprinkler systems, and why many thought it was fine to wrap entire buildings in flammable plastic blocks.

see: http://www.bbc.co.uk/news/uk-40294993

The current death toll stands at 17, but there is background chatter that it might eventually be in the 75-125 range. There is zero mainstream talk (that I'm aware of) about the burnt out husk of a tower being torn down, but I can't imagine it won't be.

There are even still fires within the tower. http://www.bbc.co.uk/news/av/uk-40295505/london-fire-flames-still-visible-at-tower

As noted... it has to be torn down, but what about all the hundreds of others built in the 1960/70s? None of them merit retrofit, they should simply be pulled. Just two years ago, this article highlighted the growing trend of building high rise apartment blocks...

http://www.dailymail.co.uk/news/article-3032452/More-200-tower-blocks-planned-London-s-skyline.html

I've no issue with most of the designs, just don't wrap them in flammable plastic blocks!

Goodnight from London
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Post hike depression

US equity indexes closed moderately weak, sp -2pts at 2437. The two leaders - Trans/R2K, settled lower by -0.7% and -0.6% respectively. VIX settled +2.1% at 10.64. Near term outlook offers a washout in the 2410/2390 zone. Broadly though, the 2500s remain highly probable, no later than September.


sp'daily5

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Summary

US equities opened fractionally higher, with the Dow and NYSE comp' breaking new historic highs. Yet.. there was a reversal from the open, and after a little micro chop with the press release from Print Central at 2pm, equities leaned increasingly weak. The closing hour saw an intra low of 2428, before a micro ramp to close fractionally lower.

Volatility was mostly subdued, but VIX did see the 11s in the afternoon. The 13/14s look due if sp'2410/2390s by Friday.
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1970s construction in the UK

I was awake until sunrise last night, mostly due to watching a few live feeds of the London tower block fire. In the 1960/70s, the UK built a huge number of low quality tower blocks. The designs were absolute garbage, and it only took a few years for them to start decaying and become areas of utter social and economic horror.

Grenfell tower: http://www.bbc.co.uk/news/uk-40272984

Last night's fire was at one of the recently refurbished ones. One of the trends is to cover the concrete with plastic coverings. Naturally (as also seen at 'The Torch' in Dubai), such coverings can catch fire, and spread like.. well, wildfire.

Listening to some chatter last night, there was the common mistaken belief that such towers have sprinkler systems. No. Most don't, especially anything built before 1990. Even worse, the designs are such - as was the case with Grenfell tower, there is only one entry/exit.

With at least a dozen having died, I'd imagine that particular tower will be torn down, along with many others in the coming years.

A city of mid rise tower blocks

Yours truly would prefer a literal bunker by the sea - much like the picture in the top left of this page. That remains a distant hope.

Extra charts in AH @ https://twitter.com/permabear_uk

Goodnight from London
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Yours truly is battling hard to provide the most balanced appraisal and outlook out there.

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Time for another rate hike

US equity indexes closed moderately higher, sp +10pts at 2440 (intra low 2431). The two leaders - Trans/R2K, settled higher by 0.7% and 0.5% respectively. VIX settled -9.1% at 10.42. Near term outlook offers a washout within the 2410/2390 zone, before the broader trend reasserts itself. The 2500s appear a given by late September.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, and clawed higher all the way into the closing hour. There were new historic highs for the Dow and NYSE comp'.

Volatility was under particular pressure, with the VIX knocked lower by a very significant -9.1% to the mid 10s. Its possible we'll see a flash print of the 9s on Wednesday, but a foray to the 13/14s seems very viable before the weekend.
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Special note about tomorrow

The short-term cyclical setup favours the equity bears tomorrow, and more so, for Thursday.

If the market does see another sig' wave lower, look for many within the mainstream to blame the equity weakness to the fed raising rates. That would be a gross mis-attribution. First, the rate hike is expected. Second, the short term cyclical setup for Wed/Thursday will favour a wave to the downside.

Tomorrow will be rather interesting!

*Extra charts after 7pm EST @ https://twitter.com/permabear_uk

Goodnight from London
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