Permabear Doomster

Friday, 29 March 2019

The Rate Cut

US equity indexes ended the month/Q1 on a broadly strong note, sp +19pts (0.7%) at 2834. Dow and Nasdaq comp' both settled +0.8%. The two leaders - Trans/R2K, settled +0.9% and +0.3% respectively.

sp'daily5

VIX'daily3

Summary

US equities opened moderately high, and whilst the opening gains were a little shaky, there was very little selling pressure, as the mainstream were very much focused on the LYFT IPO. The afternoon saw a lot of chop, but leaning upward, helped by Kudlow and a light sprinkling of end month/Q1 'window dressing'.

Volatility was naturally subdued, settling in the 13s, and fully reflective of a complacent mainstream.

The Rate Cut

If you've garnered anything from yours truly, I would hope its the notion that a rate cut will (ironically) be the ultimate equity sell signal.

Today saw Kudlow calling for an immediate 50bps cut, whilst Fed official Quarles said further hikes might be necessary.

Rate cuts are a bearish sign

SPX, fed rates, 20yr

We've already had our precursor signal of an end date for QT. Its not a question of if rates are cut... but when. Right now, I'd look to the FOMC of Oct'30th or Dec'11th.
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Sunset 6.10pm GMT. In two days that will jump to around 7.12pm BST

A Lyft coloured wheel of doom!

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Goodnight from London
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Thursday, 28 March 2019

Leaning upward into end month

US equity indexes closed on a positive note, sp +10pts (0.4%) at 2815. The two leaders - Trans/R2K, settled +1.2% and +0.8% respectively. Nasdaq comp' +0.3%. Near term outlook favours the bulls into end month/Q1.

sp'daily5

VIX'daily3

Summary

US equities saw a day of relatively minor chop, but still mostly leaning on the upward side. Volatility saw a high of 15.62, but settled -4.7% at 14.43.

Friday will be end month/Q1, and some degree of window dressing can be expected, which will inherently favour the bulls. March is on track to settle outright bullish for 4 of the 6 main indexes (Trans and R2K the exceptions).

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High above

Wednesday, 27 March 2019

Another loss maker IPO

US equity indexes closed on a weak note, sp -13pts (0.5%) at 2805. Nasdaq comp' -0.6%. The two leaders - Trans/R2K, settled +0.9% and -0.4% respectively. Near term outlook offers upside (if choppy) into end month/Q1.

sp'daily5

VIX'daily3

Summary

US equities opened in minor chop mode, but turned lower as bond yields broke new cycle lows. The spx saw a low of 2787, followed by a latter day recovery, settling at 2805. Volatility was a little twitchy, swinging from the mid 14s to 16.71, and settling +3.2% at 15.15.

Another loss maker IPO

This Friday morning, Lyft (LYFT) will be listed on the Nasdaq. That will garner a great deal of attention from the mainstream cheerleaders, who are rather desperate to see a major IPO proceed without any problems. As a company though, Lyft is just another loss maker...

Of the other four names on that list, things never turned out so great for GRPN or SNAP. As Friday is end month/Q1, there will be at least some degree of 'window dressing', and that will likely favour the equity bulls.
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