PPT activated

US equity indexes closed powerfully lower, sp -65pts (2.7%) at 2351. Nasdaq comp' -2.2%. Dow -2.9%. The two leaders - Trans/R2K, settled -2.7% and -1.9% respectively. Near term outlook offers major support starting at  2350/40s, with secondary of 2250/40s. A major multi-week bounce to the old floor of 2532 will then be due.

sp'daily5

VIX'daily3

Summary

US equities opened weak, and quickly spiralled to very significant declines, breaking a new low for the year of sp'2367. There was a powerful morning swing to sp'2410, but then the US President decided to tweet...

That really roiled the mainstream, with equities swinging back lower, and breaking a new intraday low into the early 1pm close.

Volatility naturally broke a new cycle high, settling in the low 36s. The 40/50s appear viable (if not probable) before the weekend.


PPT Activated

Sunday evening saw US Treasury Secretary Mnuchin announce on Twitter he had been calling various bank CEOs, and that he was arranging a Monday meeting of the President's working group on financial markets. This is better known as the Plunge Protection Team... the infamous PPT.

Whilst the mainstream don't even like to use the acronym PPT, the PPT is indeed real, and is effectively tasked with ensuring stability in the US capital markets. No doubt, a key part of this is propping up equity prices.

Whether you believe the Fed (or its partners - the 'primary dealers') are directly or indirectly pumping up the market (most viable via index ETFs or overnight ES futures), doesn't really matter. What does matter is that its recognise that 'they' are very much already scared.

It only took the sp'2400s for them to start freaking out. My grander target for 2019/20 are the sp'1500s. What 'magical' monetary easing schemes will Print Central initiate by that level? We've seen Govt' bonds and MBS in the precious cycle. Next due are corp' bonds, then index ETFs, and finally... individual stocks, as the BoJ and a number of other central banks are already doing.

2018 is ending on a wildly bearish note, with 2019 set to be a fiercely bearish year. There will be very powerful bounces... but they are to be seen as such.
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Christmas Eve

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Goodnight from London
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Weekend update - US equity indexes

It was a severely bearish week for US equity indexes, with net weekly declines ranging from -8.4% (Nasdaq comp', R2K) , -7.0% (sp'500), -6.9% (Dow), -6.7% (Trans), to -6.1% (NYSE comp'). The m/t outlook is bearish, with all bounces to be seen as such.


Lets take our regular look at six of the main US indexes

sp'500

The spx fell for a third consecutive week, the 9th week of 13, settling -183pts (7.0%). Underlying macd (blue bar histogram) cycle is at the lowest level since the height of the financial crisis in Oct'2008.

Price structure is a valid H/S formation, and however you might draw it, the loss of the Feb' low of 2532 has taken out the floor/neck-line. The minimum downside target is the 2300/250 zone.

Considering price action/structure in other world equity markets, and the recent break in the US bond market, a grander target of the sp'1500s appears on the menu in latter half of 2019/early 2020. That target will remain valid so long as no monthly close above the key monthly 10MA.
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Nasdaq comp'

The Nasdaq (along with the R2K) lead the way lower this week, with a net weekly decline of a very severe -577pts (8.4%) to 6332. The loss of the Feb' low of 6630 is decisive, and offers downside to giant psy'5K.


Dow

The mighty Dow fell for the 9th week of 13, imploding by -1655pts (6.9%) to 22445. The break of the April low is decisive, and offers min' target of 21k, with secondary support of 20400/20000. Grander target for late 2019/early 2020 would be around 14k.


NYSE comp'

The NYSE comp' was the most resilient index this week, but still settling lower by a severe -6.1% to 11036. Next support is around 10K. Its notable that the NYSE was the only index that never made a new historic high in late summer. Instead, a lower high, rolling over, and the first index to break the Feb' lows.


R2K

The R2K imploded by a very severe -118pts (8.4%) to 1292. Next support is not until around the 1150s... back to the Nov'2016 'Trump election' breakout. Indeed, the US equity market is set to see the entirety of the Trump gains erased.


Trans

The 'old leader' - Trans, fell for a third consecutive week, settling -693pts (6.7%) to 8874. Next support is another 10% lower to around 8k... back to the Nov'2016 election breakout level.
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Summary

All six US equity indexes saw severe net weekly declines, having fallen for a third consecutive week.

Weekly price momentum is at levels not seen since Oct'2008

YTD price performance:

The Nasdaq comp' is the most resilient, but powerfully lower for the year, -8.3%, The Dow is -9.2%, with the spx -9.6%. The NYSE comp' is -13.8%, the R2K is -15.8%, and the Trans -16.4%.
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Looking ahead 

It will be a short 3.5 trading day week. There are just 4.5 trading days left of the year.

M - Christmas Eve: EARLY CLOSING at 1pm EST
T - Christmas Day: CLOSED
W - Case-Shiller HPI, Richmond Fed
T - Weekly jobs, FHFA house price index, new home sales, consumer con', EIA Pet' & NG
F - Intl' trade, pending home sales 
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A Santa rally?

The Santa rally period begins next Monday, and stretches to Wed' Jan'3rd.
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Final note

I have especially endeavoured to highlight other world markets in recent months, which have been increasingly warning of trouble. I could list the usual ten, but I don't have the time. I'll merely highlight one...

Japan, monthly

The Nikkei is in the early phase of a massive multi-month down wave. It fractionally broke l/t rising trend in October. November saw a weak bounce, and December is now decisively under key price threshold of 21k.

If you believe the world economy will weaken into/across 2019/20, its not a stretch to see the Nikkei being cut in half to key price threshold of 12k. The US indexes could be expected to be similar in style, with the sp'1500s and Dow 14k. How the Fed, and the US President react and deal with that situation, will be truly entertaining to see.
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*the next post on this page will likely appear 2pm EST on Monday Dec'24th

Spiraling into the weekend

US equity indexes closed powerfully lower, sp -50pts (2.1%) at 2416. Nasdaq comp' -3.0%.  The two leaders - Trans/R2K, settled -1.7% and -2.5% respectively. Regardless of any sporadic bounces, the sp'2300/250 zone is on track, and will have far grander implications for 2019.

sp'daily5

VIX'daily3

Summary

US equities opened in chop mode, leaning on the upward side. Williams of the Fed was wheeled out to CNBC in the 10am hour, spewed some fedspeak, and the market jumped to sp'2504, only to then fully reverse into midday.

Wheeled out from Print Central to pump the market

Indeed, traders should be well aware that the lower we go, the more inclined the fed will be to issue threats of suspending QT... or even cutting rates. Such threats will lead to powerful bounces, but they won't last long, as this morning showed.

The market spiraled in the 12pm hour, but things turned really ugly with Navarro comments in late afternoon, that saw the spx break a new low for the year of 2408.

Navarro.. the bearish gift, that keeps on giving the whole year

Volatility swung from the 25s to the 31s, and settling +6.1% at 30.11. Considering equity price action, the VIX is still rather low.
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Winter solstice sunshine

A shrouded... almost full moon

A half century ago...


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

Goodnight from London
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If you value my work, subscribe to my intraday service. 
For details and the latest offers, see: permabeardoomster.com