Choppy weakness

US equity indexes closed fractionally mixed, sp -7pts at 2500. The two leaders - Trans/R2K, settled +0.2% and -0.1% respectively. VIX settled -1.1% at 9.67. Outlook still offers a 4-5% main market correction into October. More broadly, the bullish train is set to remain on the tracks into spring 2018.


sp'daily5

VIX'daily3

Summary

US equities opened a little weak, and saw a great deal of minor chop across the day. There was a touch of renewed weakness into the close, as the market feels distinctly tired.. especially with the fed out of the way. Cyclically, price momentum is increasingly swinging back toward the bears. At the current rate, we'll see a bearish MACD cross next Tue/Wed.

Market volatility remains broadly subdued, with the VIX spiking to 10.21, but settling in the mid 9s.

Near term outlook remains unchanged, a 4-5% correction into Oct' is due, which should equate to VIX in the upper teens, perhaps briefly testing the key 20 threshold.

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Quantitative tightening to begin

US equity indexes closed rather mixed, sp +1pt at 2508. The two leaders - Trans/R2K, settled higher by 1.5% and 0.3% respectively. VIX settled -3.9% at 9.78. Near term outlook offers initial weakness to the 2474/61 gap zone.


sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, with the sp'500, dow, and NYSE comp' breaking notable (if fractional) new historic highs. The market saw a moderate downward swing with the Fed press release, but there was a distinct bounce into the close, especially within the Transports.

Market volatility remained broadly subdued, with the VIX notably settling in the 9s, the lowest close since late July.

Outlook into October remains unchanged. A 4-5% main market correction is due, which would take most indexes to near their respective 200dmas. That would likely equate to VIX near the key 20 threshold... if briefly.
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Quantitative tightening to begin

The Fed balance sheet reduction plan - as outlined some months ago, is set to begin in October. Things start slow at just $10bn a month, but after a year, it will total $50bn a month, which will amount to a very significant annual QT of $600bn.

Further, another rate hike is highly probable at the December 13th FOMC. Frankly, the equity/econ bulls should be very pleased with how things are proceeding.
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Autumn in London

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Awaiting the Fed

US equity indexes closed fractionally mixed, sp +2pts at 2506. The two leaders - Trans/R2K, both settled -0.1%. VIX settled +0.3% at 10.18. Near term outlook offers a key turn, once the Fed are out of the way. A 4-5% main market correction to the 200dma remains on the menu.


sp'daily5

VIX'daily3

Summary

US equities opened fractionally higher, notably breaking two new historic highs for the Dow and NYSE comp'. With equities still leaning upward, market volatility remained very subdued, with the VIX again dropping into the 9s, but managing to settle fractionally higher in the low 10s.


As for the fed tomorrow...

I sure don't expect a rate hike, and neither does the mainstream. The only uncertainty is whether QT will be announced to begin. The plan was issued some months ago of course, and even if the Fed starts selling T-bonds and MBS back to the market, the amounts are insignificant, at least to begin with.

What will be interesting tomorrow afternoon is the Yellen press conference at 2.30pm. Even if the market initially spikes higher on 'omg, QT has begun!' hysteria, I would see the market at high threat of a sig' reversal, not least with each question that Yellen responds to.
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Quartet of doom: Quakes, terrorism, hurricanes, and fire

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A peaceful end to the day

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