Ending the week on a negative note

Equity bulls managed a new multi-year high of sp'2120.55 on Wednesday, but there has since been a distinct change in market mood, with a Friday decline of -19pts ( 0.9%) at 2096. VIX is reflecting some increasing mainstream concern ahead of the FOMC (June 15th) and BREXIT (June 23rd) vote, settling +16.3% @ 17.03.


sp'daily5

VIX'daily3

Summary

Clearly, not massive declines to end the week, but somewhat significant.

Market remains stuck under the May 2015 highs.

Earnings, growth/production data, and a number of geo-political issues continue to pin the US - and world markets, from breaking any higher.

The central banks are no doubt on standby to initiate more (insane) measures... but for them to justify that, we'll need to see considerably lower index levels.

It is highly arguable that the US Fed would not be able to initiate QE4, unless sp'1600s.. or lower. Of course, talk of NIRP and QE would begin from the sp'1900/1800s.


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A fractional net weekly decline

sp'weekly1b

A net weekly decline (if fractional), with a spiky top candle, which is suggestive of a short/mid term high. As anticipated, we have a divergent lower MACD cycle high. At the current rate, we'll see a bearish cross in BREXIT week, with increasing weakness into early July.

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

Another day closer to BREXIT

US equity indexes closed moderately lower, sp -3pts @ 2115 (intra low 2107). The two leaders - Trans/R2K, settled lower by -0.2% and -0.6% respectively. VIX settled +4.0% @ 14.64. Near term outlook offers pre-FOMC downside to at least test the double low of sp'2085.


sp'daily5

VIX'daily3

Summary

A day of moderate weakness, but clearly.. nothing of any significance. Even a move to the recent low of sp'2085 looks out of range until early next week.

VIX remains broadly subdued, stuck in the mid/low teens, and it will likely take a break of the sp'2025 low to see the VIX test the key 20 threshold.
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Another day closer

The BREXIT vote is just two weeks away. The count will begin at 10pm BST (5pm EST) on Thursday June 23rd. The result should be clear before the close of US trading on Friday 24th.

Yours truly has the following ballot paper sitting on his dining room table.

I guess I should probably start thinking about sending this form back soon, with an X in the correct box.


How will the UK populace vote?

By definition, the UK populace lean on the conservative side of things. They don't much like change (even when its for a better outcome), and will be more inclined to vote to remain in the EU. However, the movement to leave is unquestionably more motivated and arguably... more inclined to vote.

The vote will likely be pretty close, with the outcome important not just to the UK equity/capital market, but to the wider EU.. and to a lesser extent, the US.

If the UK vote to leave, there will be at least some degree of initial upset/shock in equity land, and then its a case of whether that will be maintained, or whether the dip buyers will flood in once more.

If the UK vote to stay, we'd certainly see an initial equity relief rally, with the £ and € strengthening, and the USD cooling, with most equity markets rising 2-3%... on either the Friday.. or following Monday.

For the more conservative trader out there... holding long (or short) overnight Thursday will be fraught with massive risks (especially in FOREX land), but certainly... the vote also offers some interesting opportunities.

Goodnight from London

Daily Wrap

US equity indexes closed moderately higher, sp +6pts @ 2119. The two leaders – Trans/R2K, settled higher by 0.6% and 0.7% respectively. VIX settled +0.2% @ 14.08. The market has built almost 5% of downside buffer room, ahead of the FOMC/BREXIT.


sp'daily

VIX'daily

Summary

It was just another day of algo-bot upside melt, with a new multi-month high of sp'2120.55, a mere 14pts (0.7%) from the May 2015 high.

VIX remains broadly subdued, ahead of next week's FOMC, when (as most agree), the Fed will once again refrain from raising rates. This time they have excuse number 427 'lousy jobs data', along with excuse number 428 'looming BREXIT vote'.

All things considered, a down wave to at least briefly test the recent key low of sp'2025 looks due. If the market holds above that low, the VIX will not see any sustained action above the key 20 threshold.


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Macro chatter on China, Mr Long and Mr Smith



*the audio is a little off, but its worth sticking with.


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USD still cooling from the weak jobs data

weekly, 3yr

The market continues to believe the fed won't raise rates next week... nor in July (not least if Q2 earnings come in weak). Broadly, the USD remains stuck in a near 10% range since the first hit of the DXY 100 threshold in March 2015. The dollar doomers have nothing to tout unless a break <90.
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Goodnight from London