Thursday, 4 September 2014

1pm update - a green candle

Whilst the top calling maniacs continue to call a new top EVERY single trading day (although why am I surprised at this?)... the bigger weekly 'rainbow' cycle merely sports a simple.. but elegant green candle.



Trend is up... primary target zone remains 2030/50.

There is little else to add. New highs.. almost every single day.

back at 3pm...maybe.

12pm update - just another minor down wave

Having broken new historic highs on a trio of key indexes, the market is cooling a little, slipping from sp'2011 to 2006. USD continues to build gains, +0.9% in the 83.60s. Metals are holding flat, whilst Oil/gas are both -0.8%.



Today is very much just like yesterday..which itself was much like the previous day. get the point.

VIX update from Mr T.

time for lunch

11am update - sp'2010

US equities have broken new historic highs for the Dow, sp'500, and NYSE Comp'. With the ECB cutting rates, along with a bond buying program, most world indexes are somewhat relieved. USD continues to build gains, +0.86%




Probably one of my top ten movie scenes from my childhood.... but more on that later.. perhaps.

Mr Market continues to climb.... and we've probably another 2% or so to go.

Equity bears need some patience.

I will look to short in FOMC/opex week...somewhere in the sp'2045/55 zone.

11.30am.. chop chop... 2011 to 2007.... highs....are new highs.

With the big jobs data tomorrow...still high threat of a weekly close in the 2020s.

10am update - new highs

The 'old leader' - Transports, has already broken a new historic high, and is a strong signal that the market will continue to broadly climb into next week. USD is +0.6%, and that remains a problem for commodity land. VIX is in melt mode.. -4%, in the 11s.

Trans, daily


So...EU lowers rates, and we have some kind of bond buying program - although the details on that remain VERY murky. I'm not sure anyone has a clue about how that will actually be implemented.. even Draghi seemed unable to answer the question.

As for the market..well, we ain't lower. Sure, we're not 'soaring', but bulls have nothing to prove.

Daily/weekly cycles continue to offer 2025/30 in the immediate term, and that remains a threat to anyone currently short.

Notable reversal in AAPL, swinging from the 97s.. to $99, and set to re-take the $100 threshold. A daily close in the $100s would be pretty bullish, and re-open the door to $110.

10.17am... New historic high on the Dow... NYSE comp'.. set to follow.

Best guess...2% higher to come..across the next two weeks...into opex/FOMC week..which would give us the sp'2045/55 zone.

10.34am... sp'2010.....    

Pre-Market Brief

Good morning. Futures are moderately higher, sp +8pts, we're set to open at 2008, with the ECB having cut int' rates by 10bps. The USD is sharply higher on the latest ECB decision, +0.7%. Metals are flat, whilst Oil is -0.8%



*ADP jobs: 204k, vs 223 expected.. a clear miss
weekly jobs: 302k, vs 300, 'reasonable'.

So.. the ECB have (to the surprise of most).. cut rates by 0.1%.. from 0.15% to 0.05%.

Neg' rates really aren't far away now, are they?.

* from what I understand, there is a plan to buy $656bn of bonds (in some form) across the next 3 years. For the EU, that is a sizable amount.

Draghi in the press conf' is stating it is NOT QE.. but 'credit easing'. Frankly, I think most are bemused as to what the hell he is announcing.

The market is clearly going to take some time to really digest this latest ECB news, esp' the rate decision.

We do still have ism and pmi service sector data to come, along with EIA oil/gas data.

Good wishes for Thursday

8.56am... futures cooling, sp +4pts... 2004.  but still... the big announcement is out of the way..and Draghi has not disappointed.

9.42am... Well, Dow looks set to break new highs this morning.

Transports already has.  Really..thats the one to watch...and it ain't bearish.

Volatility remains bizarrely low

Considering a veritable truck load of simmering geo-political issues, market volatility remains exceptionally low. The VIX continues to struggle just to break/hold the low teens. The key VIX 20 threshold looks unlikely to be attained until at least mid October.




As quite a few have recognised over the past few years, the weekly 200 MA remains a real brick wall. Since the key floor in Oct'2011, the VIX has never been able to attain a weekly close above the weekly 200 MA.. currently in the 17.50s..and which continues to decline each week.

Right now, at best... if sp'1970/50 zone in early October, VIX will likely get stuck in the 16/18 zone.

Indeed, ALL those equity doomer bears seeking a major multi-month drop, aka.. the 'intermediate wave 4 (or D), should be seeking a weekly VIX close in the 20s.. to help clarify that the bigger trends have changed. 

All things considered, I find VIX 20s unlikely in the remainder of the year, but maybe that is just classic bearish capitulation on my part.

*as things are, I have ZERO interest in being long VIX in the near term.

Video from Gordon T Long, with Egon (sadly..not Spengler)

Financial repression and precious metals

I will note, I certainly see Gold as a valid form of financial insurance against Government. Yet this single asset class is overly focused upon by many, not least those in the 'doomer' community.

Looking ahead

Thursday is set to be quite busy. We have weekly jobs, ADP jobs, PMI and ISM service sector, and productivity/costs data.

More importantly though, the ECB are due to make a decision on a likely QE program, although what they might decide on, is very difficult to guess. What is certain, the ECB will be keeping rates very low for a long time to come.

*there is minor QE-pomo of around $1bn.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately mixed, sp -1pt @ 2000. The two leaders - Trans/R2K, settled lower by -0.2% and -0.6% respectively. Near term outlook is for the sp'2020/30s, and a slightly grander target of 2050 in opex week.




Little to add.

Price action remains mostly chop... but then, the market is arguably just taking a minor pause, having ramped from sp'1904 to 2009 in just over a month.

Unquestionably, with new historic highs regularly being attained, this is still no market for the equity bears.

Closing update from Riley

a little more later...