Falling into the weekend

US equity indexes closed very significantly lower, sp -58pts (2.2%) at 2604. The two leaders - Trans/R2K, settled -2.9% and -1.9% respectively. VIX settled +13.5% at 21.49. Near term outlook offers a Monday gap lower, with the sp'2470/50 zone on the menu, for a pre-earnings washout.


sp'daily5

VIX'daily3

Summary

Overnight futures were sig' lower (the low was -42pts to 2620), as Trump's request for consideration of another $100bn of tariffs really upset the mainstream. US equities opened to 2652, but then saw a reversal. Unlike Wednesday though, the reversal was itself reversed, with renewed downside (if somewhat choppy) into the early afternoon.

Appearances from Powell and Mnuchin didn't help, and with a few breaks of soft support, equities spiralled under 2600. The closing hour was choppy, with the market makers working their magic, almost managing to pin the SPY to 260.00.

Its notable that today saw a break of the 200dma, and even though we settled above it, today's price action bodes very bearish for next week.

Volatility naturally picked up, with the VIX seeing a peak of 23.12, and settling in the mid 21s.

Best guess: the mid sp'2400s, which would arguably equate to VIX around 30. That would make for a very natural pre-earnings washout.
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Sunshine for the equity bears

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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 *the weekend post will appear Sat'12pm, and will detail the US equity indexes.

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Thursday follow through

US equity indexes closed moderately higher, sp +18pts (0.7%) at 2662. The two leaders - Trans/R2K, settled +0.6% and +0.7% respectively. VIX settled -5.6% at 18.94. Near term outlook offers cooling to at least the sp'2630/20 zone.


sp'daily5

VIX'daily3

Summary

US equities opened moderately higher, and broadly climbed into the afternoon. With a positive market, volatility cooled for a third consecutive day, settling in the upper 18s.

Friday should be interesting as not only do we have the monthly jobs data, but Fed chair Powell is due in the 1pm hour, and Mr Market will be watching.

There will be live coverage on the main financial networks, but there will also be a live feed
see:  https://www.youtube.com/user/EconomicClubChicago
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Bonus chart: Japan, monthly

We've a long month ahead, but as things are, the Nikkei is +2.3% at 21645. The 21k threshold remains very important. Core rising trend is currently around 20k. At the current rate, we're due a bearish MACD cross within 1-2 months, and that would merit alarm bells.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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Wednesday reversal

US equity indexes closed broadly higher, sp +30pts at 2644 (intra low 2573). The two leaders - Trans/R2K, settled -0.1% and +1.3% respectively. VIX settled -4.9% at 20.06. Near term outlook offers Thursday weakness, but after today's reversal, the Monday low of 2553 arguably is just a marginally higher low - relative to Feb'9th.


sp'daily5

VIX'daily3

Summary

US equities opened significantly lower, as the mainstream was spooked by Chinese trade tariff news. However, there was a reversal almost immediately from sp'2573. By late afternoon, most indexes had built rather significant gains.

It was a mixed day for the VIX, opening in the mid 24s, but settling moderately lower, just above the key 20 threshold.

Unless we see VIX >26s, equity bears should be largely resigned that the Monday low of sp'2553 is to be treated as a marginally higher low - relative to Feb'9th. That sure doesn't mean Thurs/Friday can't see some sig' downside, but this morning's low does look pretty secure.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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