Saturday, 18 November 2017

Weekend update - US weekly indexes

It was a rather mixed week for US equity indexes, with net weekly changes ranging from +1.2% (R2K), -0.1% (sp'500), to -0.3% (Dow). Near term outlook offers a little chop, but leaning upward into the 2600s. The original year end target of 2683 will be a stretch.


Lets take our regular look at six of the main US indexes

sp'500


The sp' settled fractionally net lower for a second consecutive week, -3pts at 2578. There is a clear break of soft rising trend that stretches back to the Aug' low of 2417. The Wed' low of 2557 does look rather secure though, and considering broader market price action and structure, a push into the 2600s looks possible as early as next week.

Best guess: a little weakness next Monday, but then a push into the 2600s, certainly by end month. By year end, the market has a fair chance of trading within the 2650/700 zone. That will clearly need almost everything to go right, with a rate hike, and oil sustainably around/above $60.

Equity bears have nothing to tout unless a bearish monthly close, which to me, would equate to a monthly close under the monthly 10MA (currently at 2456). That number is set to jump by 35pts at the Dec'1st open. So, unless 2017 settles under 2490 or so, the m/t bullish trend can be said to remain intact.
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Nasdaq comp'


The tech saw a net weekly gain of 0.5%, and with a notable new historic high of 6806. Upper weekly bollinger will be offering the 6900s before end month. The 7000s are due in December, with the 8000s a valid target for late spring 2018. Broadly, Q3 earnings were unquestionably good, and in some cases (MU, INTC, CSCO) outright superb. There is little reason to expect the current m/t trend not to hold for some considerable time to come.


Dow


The mighty Dow was the laggard this week, settling -0.3% at 23358, but that is still very close to recent hist' highs. Indeed, the upper weekly bollinger will be offering the 24000s in December. Underlying MACD (blue bar histogram) cycle ticked lower for a second week, but its arguably just cooling like August or March. Note the weekly 10MA that has held since April. No price action <23k can be expected for the remainder of the year.


NYSE comp'


The 'master' index settled net lower for the third week of four, -0.2% at 12302. Things would arguably only turn bearish if <12k, and that looks very unlikely before year end. Upper bollinger will be offering the 12600s before end November. The 13000s look a stretch by year end.


R2K


The second market leader - R2K, was the leader this week, with a net gain of 1.2% to 1492. There was an intra week low of 1454, which is around a rather important price threshold, that stretches back to July. With the Thurs-Friday rebound, the bulls can be looking for new hist' highs (>1514) into early December.


Trans


The 'old leader' - Trans, settled lower for a fourth consecutive week, -0.2% at 9483. The tranny has seen a clear initial failure to break and hold the giant 10k threshold. Despite the bearish run, things really only turn bearish <9300, and considering the broader collective of indexes, that looks unlikely. Arguably, its now merely a case of whether the tranny settles the year a little above.... or below 10k. I'm leaning on the former.
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Summary

A mixed week for US equity indexes, with minor weakness in the Dow and Trans, but a sig' gain in the R2K.

The US market is still regularly generating new highs, with this week seeing a new hist' high in the Nasdaq comp'.

Most indexes have 3-5% of downside buffer before the m/t bullish trend from early 2016 would be challenged.
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Looking ahead

It will be a very light 3.5 day trading week.

Earnings: INTU (Mon'), LOW (Tues'), DE (Wed')

M - Leading indicators
T - Existing home sales
W - Durable goods orders, weekly jobs, consumer sent', EIA Pet', FOMC mins (2pm)

T - CLOSED for Thanksgiving
F - EARLY CLOSING at 1pm EST.
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*the next post on this page will likely appear 6pm EST on Monday.

Friday, 17 November 2017

Choppy opex weakness

US equity indexes closed rather mixed, sp -6pts at 2578. The two leaders - Trans/R2K, settled -1.1% and +0.4% respectively. VIX settled -2.8% at 11.43. Near term outlook offers a little weakness to around 2572. More broadly, the 2600s are due, whether before or shortly after Thanksgiving, it should make no difference to most.


sp'daily5



VIX'daily3



Summary

US equities opened in minor chop mode, and leaned on the weaker side into the late afternoon.

Despite equities leaning weak, the VIX opened lower, and stayed negative across the day. Its arguably a sign of underlying capital market confidence. The key VIX 20 threshold looks out of range for the rest of the year. Near term offers a little equity weakness to begin next week, but not much below sp'2572.
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*the weekend post will appear Sat'12pm EST, and will detail the US weekly indexes
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Thursday, 16 November 2017

Naturally rebounding

US equity indexes closed broadly higher, sp +21pts at 2585. The two leaders - Trans/R2K, both settled higher by around 1.6%. VIX settled -10.4% at 11.76. Near term outlook offers a touch of cooling to the mid sp'2570s, but with the 2600s due before end month.


sp'daily5



VIX'daily3



Summary

US equities opened moderately higher, and built broad gains into the afternoon.

It was notable that once again the mainstream have seen their mood swing from effectively 'on suicide watch' to 'everything is fine again'. We're only in the sp'2500s, what happens when we're in the 3000s next year, and we drop 1% at the open? Who at CNBC, Bloomberg, or Fox Business, is responsible for calling the fed to request at least a press release threatening QE4 ?

Market volatility was naturally whacked at the open, and ground down to the mid 11s in early afternoon. With a retrace to the mid sp'2570s, VIX 12.50/13s seem due, before another wave to the 9s. Whether that is before or after the Thanksgiving break.... is of no importance.
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Appropriate.

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Goodnight from London

Wednesday, 15 November 2017

More of the same

US equity indexes closed moderately weak, sp -14pts at 2564. The two leaders - Trans/R2K, both settled lower by -0.5%. VIX settled +13.3% at 13.13. Near term outlook offers a bounce to the 2580s before the weekend. More broadly, the 2650/700 zone is still on track in late December.


sp'daily5



VIX'daily3



Summary

The day began with a mild case of mainstream media bearish hysteria...



Its not what Cramer stated, as the mainstream's lack of perspective, seeing equity futures as 'sharply lower', whilst the sp' was set to open lower by just -10pts (0.4%).Would an opening decline of -25pts (1.0%) now justify the word 'crash' being used?

US equities did indeed open moderately lower, breaking below quad-spike support of 2565/66. The market floored at 2557, to whipsaw back upward, although the closing hour price action wasn't exactly great.

Its notable that the VIX broke to the mid 14s, the highest level since Aug'21st. The key 20 threshold still looks out of range for the rest of the year.
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Grey horror - marginally more inspiring than GE CEO/Chair' Flannery.
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Tuesday, 14 November 2017

Another day of moderate chop

US equity indexes closed moderately weak, sp -5pts at 2578 (intra low 2566). The two leaders - Trans/R2K, both settled lower by around -0.3%. VIX settled +0.8% at 10.59. Near term outlook offers further moderate swings into Friday opex. More broadly, the 2650/700 zone remains viable into year end.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, cooled to 2566, and then hyper spiked. The 2565/66 threshold has indeed been rather important across the last few weeks. Whilst the bulls are struggling to break into the 2600s, neither are the bears able to muster any sustained/significant downside.

Volatility climbed in the morning, with a notable higher low of 12.61, but settling in the mid 11s. The key 20 threshold looks well out of range for the rest of the year, unless things turn hot in the middle east or NK.

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Monday, 13 November 2017

Choppy start to the week

US equity indexes closed on a fractionally positive note, sp +2pts at 2584. The two leaders - Trans/R2K, settled +0.2% and u/c respectively. VIX settled +1.9% at 11.50. Near term outlook offers further moderate chop, with last week's low of sp'2566 appearing very secure. The 2600s are clearly viable before next week's Thanksgiving break.


sp'daily5



VIX'daily3



Summary

US equities opened moderately weak (pressured via Asian/EU markets), but the bears were even weaker than usual, with some indexes turning positive in the 10am hour. The rest of the day was rather tedious micro chop.

The VIX saw a pre-market high of 12.18, notably 0.01pts below last week's cash market high. The 9/8s appear probable into next week's Thanksgiving break. Indeed, with a holiday break on the horizon, the market will be inclined for a great deal more of what we saw today. Clearly, underlying price pressure is still to the upside, and the 2600s are absolutely viable by next Wed/Friday.

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As the fed might say... transient grey gloom rolling in, to conclude a rather cold November's day in London.

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Saturday, 11 November 2017

Weekend update - US monthly indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -0.2% (sp'500, nasdaq comp'), -1.3% (R2K), to -2.6% (Trans). Near term outlook offers renewed upside to the sp'2600s by Thanksgiving. The year end target of 2683 will be just about technically within range.


Lets take our regular look at six of the main US indexes

sp'500


Despite a net weekly decline of -0.2%, the sp' is currently net higher for an 8th month, with a new historic high of 2597. Underlying MACD (blue bar histogram) cycle is just flat lining on the high side, showing no sign of a downward swing. The key 10MA stands at 2456. Rising trend from early 2016 is around the 2470s.

Best guess: near term upside to the 2600s by Thanksgiving. The original year end target of 2683 is just about technically viable. More broadly, 3K is a valid target by mid 2018, not least if commodities can break upward (CRB >197s).

Equity bears have nothing to tout unless a bearish monthly close, which (to me) would constitute a settlement under the key 10MA. Keep in mind, the 10MA is rising around 35pts a month, so from Dec'1st onward, it'll be around 2490.. possibly even the 2500 threshold.
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Nasdaq comp'


The tech remains broadly super strong, having seen a new hist' high of 6795. The 7000s are clearly viable before year end. The 8000s are a valid target for late spring/summer 2018. Recent earnings from most tech stocks have come in fine, with some (such as INTC, MU, NVDA) outright superb. The 'comp @ 10k' is a valid target for 2019, although I realise most will be laughably dismissive of it.


Dow


The mighty Dow remains broadly strong, with a recent historic high of 23602. The key 10MA is currently in the 21700s, and will be around 22000 from Dec'1st onward. A year end close in the 24000s is very much within range. Things are arguably only bearish with a monthly close <21500, and that sure doesn't look likely.


NYSE comp'


The 'master index' saw a net weekly decline of -0.4%, holding just a little shy of the Oct' historic high of 12415. Near term outlook offers renewed upside to the 12500s. Upper monthly bollinger will offer the 12700s 'on a stretch' by year end. 13k looks out of range until at least early 2018.


R2K


The R2K settled lower for the 4th week of the past 5, -1.3% at 1475. However, broadly, the R2K is super strong. Another push upward is due, not least if financials climb into year end on 'higher rate hopes in 2018'. Only bearish if <1425.


Trans


The 'old leader' - Trans, saw a very sig' net weekly decline of -2.6%. Underlying MACD cycle ticked lower for a second week. At the current rate, a bearish cross will be due by early December. However, considering earnings and econ-data, the broadly super strong main market, the tranny should resume upward. A 2017 settlement >10k is very much within range.
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Summary

Net weekly declines for all US indexes, but its highly notable that the sp', dow, and nasdaq comp' still broke new historic highs.

Most indexes have around 4-5% of downside buffer, before the core upward trend from early 2016 would be challenged.

Equity bears have nothing to tout unless the majority of indexes see a monthly close under their respective 10MAs.
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Looking ahead

Notable earnings: JD (Mon'), HD (Tues') CSCO (Wed'), WMT (Thurs'), FL (Fri')


M - US T-budget
T - PPI
W - CPI, retail sales, empire state, bus' invent' EIA Pet' report
T - Weekly jobs, phil' fed, import/export prices, indust' prod, housing market index
F - Housing starts  *OPEX*

*there are a few fed officials on the loose, notably: Bullard (Tues), Evans, (Wed' in London), Mester (Thurs)

**As Friday will be opex, expect a lot of price chop with increasing vol' into the weekend.
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Have a good weekend
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*the next post on this page will likely appear 6pm EST on Monday.

Friday, 10 November 2017

A mixed week

US equity indexes closed fractionally mixed, sp -2pts at 2582. The two leaders - Trans/R2K, settled -0.2% and u/c respectively. VIX settled +7.5% at 11.29. Near term outlook offers the sp'2600s by Thanksgiving. The year end target of 2683 will be technically within reach.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, saw a morning low of 2575, with a moderate upswing into the late afternoon. A few indexes even turned fractionally positive.

Market volatility remains broadly subdued, with the VIX settling the week in the low 11s. The key 20 threshold looks out of range for the rest of the year. Near term outlook offers the sp'2600s by Thanksgiving. If correct, the VIX will be back in the 9/8s.
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A mixed week


A notable new historic high of 2597.02, but a net weekly decline of -5pts (0.2%), the first decline since early Sept'. Broadly, the m/t trend remains super strong.
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Thursday, 9 November 2017

A sporadic drop

US equity indexes closed broadly weak, sp -9pts at 2584 (intra low 2566). The two leaders - Trans/R2K, settled lower by -1.2% and -0.5% respectively. VIX settled +7.4% at 10.50. Near term outlook offers some weak chop, but nothing sustained <2560. Broadly, nothing has changed, as the 2600s are due into Thanksgiving.


sp'daily5



VIX'daily3



Summary

US equities opened moderately lower, saw a bounce in the 10am hour, but with some sporadic 'spooky news' about the Senate possibly delaying a corp' tax reduction until 2019, the market resumed back lower. There was a distinct latter day recovery, with most indexes only settling moderately lower.

Market volatility picked up, but even the intra day high of 12.19 is still to be seen as broadly subdued. Despite today, the key 20 threshold still looks out of range for the remainder of the year. Its notable that whilst front month VIX was sig' higher, further out months were only a touch higher. The 'big money' does not expect significantly higher volatility before year end.
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Bonus chart: Japan, Nikkei, daily



I thought the Japanese market merited highlighting, after the Thursday session saw a wild swing from 23382 to 22522. The daily candle is one of rather severe 'indecision'. Further, on any basis, the Nikkei is short term cyclically overbought, although that could have been argued since mid September. The Oct' settlement >21k is what matters, and it offers next soft target of 25/26k in 2018.
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Wednesday, 8 November 2017

Moderate chop

US equity indexes closed moderately mixed, sp +3pts at 2594. The two leaders - Trans/R2K, settled -0.4% and +0.2% respectively. VIX settled -1.1% at 9.78. Near term outlook still offers 'natural' target of 2560 with VIX 11s. More broadly, the year end target of 2683 remains within range.


sp'daily5



VIX'daily3



Summary

US equities opened a little weak, saw a floor around 12pm from sp'2585, and then clawed upward across the afternoon to 2595.

Market volatility remains broadly subdued, with the VIX settling in the upper 9s. A burst to the low 11s remains due, and that would equate to at least sp'2570, if not '60. The key VIX 20 threshold looks out of range for the rest of the year.
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A chilly afternoon sunset

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Tuesday, 7 November 2017

A little weak

US equity indexes closed on the weaker side, sp -0.5pts at 2590 (intra high 2597). The two leaders - Trans/R2K, settled lower by -0.6% and -1.2% respectively. VIX settled +5.2% at 9.89. Near term outlook offers moderate weakness to sp'2560, which should equate to VIX 11s (ohh, the drama!).


sp'daily5



VIX'daily3



Summary

US equities started the day on a positive note, with a trio of new historic highs in the sp', dow, and nasdaq comp'. There was a soft reversal around 9.50am, and then the market broadly cooled into the late afternoon. There was a closing hour mini ramp, but another wave lower to around 2560 seems very probable within the next day or two.

Market volatility opened fractionally lower, climbed to the 10s, but settling in the mid 9s. We're not going to see the VIX above the key 20 threshold before year end, are we? Indeed, we've not see a year without VIX >20 since 2005, and its reflective of just how confident the US/world capital markets are.
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To the APRN and SNAP holders, ohh, and Bill 'no stops' Ackman... the following is for you..


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