The dash to trash

US equity indexes mostly closed weak, sp -25pts (0.8%) at 3207. Nasdaq comp' +0.3%. Dow -1.1%. The Transports settled -2.3%.

sp'daily5

VIX'daily3

Summary

US equities opened broadly lower, largely pressured via very significantly lower European markets.

Meanwhile, the US President appeared in pre-market...

Somewhat surprisingly, there was no comment (before the close), noting the Nasdaq did break >10K.

The afternoon saw a recovery to sp'3222, but with a little closing hour cooling.

Volatility picked up a little ahead of the Fed, the VIX settling +6.8% to 27.57. Things only turn 'interesting' <sp'3090, and with VIX >30.50s.


The dash to trash

The past few weeks have seen an increasing interest in highly speculative stocks. This movement, the 'dash to trash' is not a healthy sign. Some are arguing it is indirectly linked to the lockdown, with more retail amateurs having the time to day/swing trade. Further, there is also an element of desperation, in the newly jobless trying to make some money.

Key stocks...
-Luckin Coffee, a company which was a fraud since the May 2019 IPO. Set to be delisted late  June/July.
-Chesapeake Energy, a mountain of debt, still set to implode, as its resource - Nat' gas, remains broadly subdued <$2.00.
-Hertz, a company that has recently filed for bankruptcy.
-Transocean, long term horror, and it remains difficult to see this one surviving. I'd expect Schlumberger to pick up the pieces, for cents on the dollar.

Your view...

Of the four, I'd have chosen LK, but that company is to be seen as tier'1 communist garbage. As I often say, there is a lot to be said for a big and boring Dow component.
--

Pre-dawn moon

--
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

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

 

Starting positive

US equity indexes closed significantly higher, sp +38pts (1.2%) at 3233. Nasdaq comp' +1.1%. Dow +1.7%. The Transports settled +1.8%.

sp'daily5

VIX'daily3

Summary

US equities opened on a moderately positive note, helped by other world markets.

The US President appeared in late morning...

For now, the US President is very pleased with the ongoing equity ramp, and its been some time since we've seen any criticism of the fed/Powell.

Equities saw considerable chop, but leaned upward into the late afternoon.

Volatility was itself subdued, the VIX settling +5.3% at 25.81. Tuesday/early Wednesday offer broad chop ahead of the Wed' FOMC. Next resistance are the sp'3250s, which might sync with VIX tagging the upper end of legacy gap of 22/17s.

--
Your views...

Its difficult to see the fed changing rates before year end.

A mere 6.2% expect a surge in inflation >10% by end 2021.

96.9% accept the Fed's balance sheet will be at least >$8tn by year end. A break above ten trillion will require the excuse of another stimulus bill, and subsequent T-bond issuance. Right now, the (eventually probable) infrastructure bill looks a stretch ahead of the election.
--

The skies remain unusually quiet

A fine end to the day

--
Extra charts in AH (usually around 5pm EST) @ https://twitter.com/permabear_uk

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

 

Weekend update - US equity indexes

It was a powerfully bullish week for US equity indexes, with net weekly gains ranging from +10.1% (Transports), +7.1% (NYSE comp'), +6.8% (Dow), +4.9% (SPX), to +3.4% (Nasdaq comp').


Lets take our regular look at five of the main US indexes (monthly candle charts).

sp'500

Nasdaq comp'

Dow

NYSE comp'

Trans

–


Summary

All five US equity indexes settled net higher for the week.

The Transports is leading the way higher, with the Nasdaq trailing.

The Nasdaq comp' broke a new historic high.

All five indexes have re-taken their respective monthly 10MA.
–


Looking ahead

A pretty light week is ahead, with just a handful of notable earnings, and a few pieces of econ-data. Whilst there will be an FOMC, there will clearly be no change in policy.

Earnings:

M - SFIX
T - TIF, CHWY, GME, FIVE, AMC
W - GES, RRGB
T - ADBE, LULU, PVH
F -
-

Econ-data:

M -
T - JOLTS, wholesale inventories
W - CPI, EIA Pet', US T-budget

FOMC announcement 2pm, with a press conf' at 2.30pm.

T - Weekly jobs, PPI, Fed bal' sheet (4.30pm)
F - Import/export prices, consumer sent'
-

The Longest Day (1962)

Final note

May saw the SPX and Nasdaq comp' settle back above their respective monthly 10MA. Under my criteria, that made for a bullish monthly settlement, and changed the m/t trend back to bullish. This past week has seen other indexes follow.

A multi-week retrace is due, and whilst we might break back under sp'3K at some point, I do not expect any bearish monthly settlement (under the 10MA). Any cooling wave/retrace is thus to be seen as such. I hope that is (as Wonka might say)... clear as crystal!

Strawberry full moon

I can understand if some saw Friday's equity gains as a case of moon-madness, but the employment data was a distinct improvement. A massive economic recovery is underway, with the Fed activity preventing any mid/upper tier corporate bankruptcies. By year end, perhaps half of the -40% collapse in GDP will have been recovered. That will still make for a broken society and economy into 2021.

With further QE and zero rates, I will merely re-iterate, I see long gold and the related miners, as the most straight forward trade into 2021. Be careful out there... in the twilight zone.


If you value my work on Blogger and Twitter, subscribe to my intraday service.
For details/latest offers, see: Permabeardoomster.com

Have a good weekend
--
*the next post on this page will likely appear 5pm EDT on Monday.