Thorny Thursday

US equity indexes closed significantly lower, sp -36pts (1.3%) at 2677. The two leaders - Trans/R2K, settled -0.5% and -0.3% respectively. VIX settled +13.2% at 22.47. Near term outlook offers capitulation around sp'2630, which would make for a 61% retrace of the 2532/2789 wave.


sp'daily5

VIX'daily3

Summary

I've never actually crunched the numbers, but having watched this nonsense for over a quarter century, I have long noticed that Thursday's tend to favour the equity bears. There are a few reasons for this, not least that downward pressure can take some days to build.

Today was an especially thorny day in market land. Pre-market moderate declines were negated by the open, but then the sellers appeared, only for the market to bounce from 2699. The bounce was very shaky, and the market rolled over again, and then very significantly imploded into the afternoon. The following sure didn't help...

... tariff chatter from Trump really upset the mainstream, and almost everything - except the Steel and Alu' producer stocks, swung significantly lower. The afternoon break <2690 saw equities spiral lower, with an afternoon low of 2659, notably under the 50% fib' retrace.

With equities lower for a third day, the VIX swung upward from a morning low in the mid 19s, to the mid 25s, and settling in the mid 22s.

Best guess: further weakness to sp'2630, as VIX 30/34 will be technically viable. On no realistic outlook do I expect the recent sp'2532 low to be broken under.
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Failed gains

US equity indexes closed significantly weak, sp -30pts (1.1%) at 2713. The two leaders - Trans/R2K, settled -1.3% and -1.6% respectively.  VIX settled +6.8% at 19.85. Yesterday's bearish engulfing daily candles were confirmed, offering further weakness at least the basic 38% fib' of sp'2691.


sp'daily5

VIX'daily3

Summary

Yesterday saw bearish engulfing candles for most indexes. This morning opened moderately higher, climbing to 2761, but then we saw another significant reversal to settle net lower.Today's failed gains fully confirm yesterday's reversal. We're arguably seeing the first proper retrace from the initial wave of 2532>2789. The 38% fib' retrace of 2691 looks highly probable.

With equities unravelling into the late afternoon, the VIX surged from a morning low of 17.39 to 20.44, and settling in the upper 19s. Further upside to the 22/25 zone looks probable.


The February settlement: sp'monthly

Yes, the sp' saw a very significant net monthly decline of -110pts (3.9%) to 2713, but this was far above the intra month low of 2532. Note the hyper spike from around the key 10MA. M/t upside to the 2950/3047 zone still looks due, where the market will be highly inclined to become seriously stuck.
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A rare snow day in the London metropolis

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Powell induced swing

US equity indexes closed on a significantly weak note, sp -35pts (1.3%) at 2744. The two leaders - Trans/R2K, settled -2.3% and -1.5% respectively. VIX settled +17.7% at 18.59. Near term outlook offers renewed upside to the 2800s in March. More broadly, big target remains the 2950/3047 zone.


sp'daily5

VIX'daily3

Summary

US equities opened fractionally mixed, but then clawed upward to a morning peak of 2789, notably just 11pts shy of the 2800s. As Powell was questioned by the US house, the algo-bots used some of the comments on inflation and rate hikes, to knock the market lower, settling the day at 2744.

With equities leaning a little weak, the VIX picked up, battling back into the 18s.
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Bonus chart: Russia, monthly

I recognise most will not see the relevance, but the Russian equity market has swung from an intra month low of 1177, and is currently net higher by 2.5% at 1313. Big target is psy' 1500, and that is clearly some months away. Indirect bullish implications for other world markets, and that includes the USA.
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Sunshine between the snow showers.

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