Wednesday, 17 August 2016

Oil continues to climb

US equities closed moderately lower, sp -12pts @ 2178. The two leaders - Trans/R2K, settled u/c and -0.9% respectively. VIX settled +7.0% @ 12.64. Near term outlook offers threat of the 2160s.. before resuming upward. Broadly... the market still looks strong into early September




So... moderate weakness across most US indexes.

Yet... are any equity bears going to let themselves get overly excited about a decline of 12pts (0.5%) ? Similarly, VIX was only moderately higher... still stuck sub-teens. Does anyone seriously think the key 20 threshold is due in the near term?

Broadly.. equity price action remains strong... and is certainly being helped via continued strength in Oil.

WTIC, weekly

A fourth consecutive net daily gain of $0.84 (1.8%), settling @ $46.58. The psy' level of $50 is well within range by mid September. The past few weeks of USD cooling is no doubt helping Oil build gains. Any closes >$50 should clarify $60 will be hit. The inv' H/S scenario - as also seen in many energy stocks, would be suggestive of $70/75 by late spring 2017.

Goodnight from London