Saturday 30 December 2017

Weekend update - World equity markets

It was a mixed month for world equity markets, with net monthly changes ranging from +6.2% (Brazil), +4.9% (UK), +1.8% (USA), -0.3% (China), to -1.6% (Spain). It was a broadly bullish year, with net yearly changes ranging from +26.8% (Brazil), +25.1% (USA), +12.5% (Germany), +7.6% (UK) to -0.02% (Russia).


Lets take our regular look at ten of the world equity markets

USA - Dow


The mighty Dow settled higher for a NINTH consecutive month, +446pts (1.8%) to 24791, which made for a powerful net yearly gain of 25.1%. December saw a new historic high of 24876.

Best guess: there is threat of some cooling in Jan/Feb' of 3-5%. Ironically, that would merely make for a mini washout, before another major surge across the spring/summer. Next key fib' level is 26702, which is 8% higher. At the current rate of increase, 30k is a valid target for 2018, with a secondary key fib' of 34430.

Equity bears have nothing to tout unless a bearish monthly close. For me, that would equate to a monthly close under the key 10MA, currently in the 22200s, and which is rising around 400pts a month. So, from June 1st onward, the 26600s will be 'technically' on offer. I do not expect any bearish monthly closes in the near/mid term.
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Germany – DAX


The economic powerhouse of the EU - Germany, saw the DAX settle -0.8% to 12917, but this still resulted in a net yearly gain of 12.5%. The 10MA is holding as first technical support. Upper bollinger will be offering the 14000s in early 2018. Core support is around 11k, and that looks secure.

It would really help the financials - not least Deutsche Bank, if the ECB raise rates at least once in the latter half of 2018. Right now, Draghi is showing zero sign of doing that. If the Fed raise rates another 2-3 times by autumn 2018, the ECB will be under severe pressure to begin normalisation.


Japan – Nikkei


The Japanese market climbed for a fourth month, +0.2% to 22764, which made for a net yearly gain of a very powerful 19.1%. Most notable this year was the sustained break above key resistance of 21k. Next stop is 25/26k. I'd imagine the printing staff at the BoJ are very pleased with their work this year. Some babies would also help, but there will be fewer of those in Japan in 2018, than this year.


China – Shanghai comp'


The Chinese market leaned weak into year end, settling -0.3% at 3307, but that still resulted in a net yearly gain of a reasonable 6.5% There remains very powerful resistance within the 3400/500s. An eventual upward break is probable, and that will offer 4500 by late 2018.The communist leadership would clearly like higher prices to placate the populace, but they are understandably concerned about a bubble similar to 2015. No doubt, the PBOC will be busy across 2018.


Brazil – Bovespa


The Brazilian market was higher for the 6th of 7 months, settling +6.2% at 76402, making for a very powerful net yearly gain of 26.8%. Note the December close is above the May 2008 high, which gives confidence 80k will be seen by mid 2018. More broadly, 100k is on the menu. Clearly, that will require sustained/significant strength in commodities... which itself seems probable.


Russia - RTSI


The Russian market climbed into year end, settling net higher for December by 2.1% to 1150.32. This was 2.1pts (0.02%) below the 2016 settlement. There is a clear upward trend that began in Jan'2016. A break above the 1200 threshold will offer a major push to the 1500/600 zone in 2018. Some commodity price inflation (especially oil and nat' gas) would really help inspire such upside.


UK – FTSE


The UK market ended the year on a particularly bullish note, settling +4.9% to 7687, with a notable new historic high of 7697. Price action across 2017 has been very choppy, but its extremely important to recognise that old multi-decade resistance of 7k, is now confirmed support. The 8000s are clearly coming into the spring. More broadly 10k is a valid target for end 2018. The hyper bulls should be seeking 14/15k before maxing out. The natural low in the next bear market would be no lower than 7k.


France – CAC


The French market settled lower for a second month, -1.1% to 5312, however that still resulted in a net yearly gain of a very significant 9.3%. The most important aspect this year was the break of declining trend that extended back to Sept'2000. We saw a text book breakout, then a back test, with a new high in Nov' of 5536. Next soft target is the June 2007 high of 6168. That seems a valid target for the summer, with viable new historic highs (>6944) before end 2018. Will Macron copy Trump, and start to tout the strong equity market as a sign of his 'inspiring leadership'?


Spain – IBEX


The Spanish market settled lower for a second month, -1.6% to 10043, but still making for a respectable net yearly gain of 7.4%. Its notable the IBEX peaked at 11184 in May, and then declining by -10.2% across eight months. The 'Catalonia situation' was obviously the core reason for the choppy cooling. Spanish equity bulls should be desperate to see a break above multi-year resistance of 12k. If that can be achieved, it will open up grander upside to 15/16k in 2019/20.

As one of the infamous 'PIIGS', it does remain the case that the Spanish economy has underlying structural problems. For now, things are ticking along, but the next recession would cause particular social unrest, and re-ignite the Catalans, who are seemingly content to just let things drag out for another few years.


Australia - AORD


The Australian market settled higher for a third consecutive month, +1.8% to 6171, making for a net yearly gain of 7.9%. Price action is similar to the French market, with an important break of multi-year declining trend, a back-test, and then another push upward. Next soft target is the Nov'2007 historic high of 6873, which is 11.4% higher. That does seem on the menu within 6-9mths. Commodity price action is going to be particularly important to the Australian economy/market in 2018.
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Summary

A mixed December, with 6 markets net higher, and 4 net lower. Brazil, USA, and the UK are leading the way higher, whilst Spain and China are lagging.

A broadly bullish year, with 9 of 10 markets significantly higher. Only the Russian market saw a fractional net yearly decline, but even that looks set to break above key resistance in early 2018.

Most markets are offering basic upside of 10% by mid 2018 (including the USA). If commodity prices pick up - as seems probable, then the rate of increase will accelerate.

It is not a stretch to target broad 2018 upside of another 15-20% to most markets.
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Looking ahead

M - New Years day: CLOSED
T - PMI manu'
W - Vehicle sales, ISM manu', construction, FOMC mins (2pm)
T - ADP jobs, weekly jobs, PMI serv', EIA Pet' & Nat' gas
F - Monthly jobs, intl' trade, factory orders, ISM serv'

*there are just a couple of fed officials on the loose, notably Bullard (Thurs'), and Harker (Fri').
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Submit YOUR target for 2018.

I'm interested in two aspects....

Primary: what is your end 2018 target for the sp'500 ?

Secondary: ANY other issues you'd like to raise, whether equity indexes, individual stocks, GDP, jobs, inflation, oil, gold/silver/copper, bonds. You can even highlight anything socio-political.
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You can submit your target/outlook via Twitter ( https://twitter.com/permabear_uk ), Disqus (in this, or any future post), or email. If you want to change anything, let me know.

The deadline for submissions: The weekend of Jan'6/7th

I will likely post my outlook for 2018, along with your submissions, the weekend of Jan'6/7th.
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If you value my work, subscribe to me.
For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.htm


Enjoy the three day weekend... and sincerely happy new year!
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*the next post on this page will likely appear 6pm EST on Tuesday, Jan'2nd 2018.

Friday 29 December 2017

2017 comes to a close

US equity indexes closed moderately weak, sp -13.93pts at 2673.61. The two leaders - Trans/R2K, settled -0.4% and -0.9% respectively. VIX settled +8.4% at 11.04. Outlook for January/Feb threatens a mini washout of 3-5%, but broadly, we're clearly headed for sp'3K.


sp'daily5



VIX'daily3



Summary

In pre-market, the sp' was moderately higher, and offering new historic highs. Yet, as the market opened, the gains quickly failed. Much of the day was just fractional chop. There was distinct weakness in the closing hour, with the sp' settling -0.5% at 2673.

It was a mixed day for the VIX, seeing a low of 9.95, but then swinging strongly higher as equities cooled into the close.

Even the most hyper bullish recognise the market is due a mini washout. The only issue is 'when'. Seasonally, the market is vulnerable from mid Jan-early Feb'. If the bears can't manage anything then, the next realistic window is not until May/June.
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Close, real close: sp'monthly6b


My original year target came to be just 9.39pts (0.35%) above the yearly close, which I'm very pleased with.Yours truly now needs to finalise an outlook for 2018, not just for the sp'500, but rate hikes, and various other issues.
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A glimpse of sunshine on the last trading day. Bullish!
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
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*the weekend post will appear Sat' 12pm EST, and will detail the World equity markets.
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Thursday 28 December 2017

2017 set to wrap

US equity indexes closed a little mixed, sp +4pts at 2687. The two leaders - Trans/R2K, settled -0.3% and +0.3% respectively. VIX settled -2.8% at 10.18. Near term outlook offers further minor chop into the yearly close. As I've been relentlessly touting across the year, the original target of 2683 remains on track.


sp'daily5



VIX'daily3



Summary

It was another day of minor chop for the US equity market. The NYSE comp' once again broke another (if only fractional) historic high of 12843. VIX was naturally subdued, settling in the low 10s.

With just one trading day left of the year...

sp'monthly6


... yours truly is understandably 'curious' as to whether the trading gods will indeed settle 2017 at sp'2683. Regardless, its going to be close.
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An icy day in the London metropolis

.. as the days are starting to lengthen

--
Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--

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Wednesday 27 December 2017

Two trading days left

US equity indexes closed fractionally mixed, sp +2pts at 2682. The two leaders - Trans/R2K, settled +0.2% and u/c respectively. VIX settled +2.1% at 10.47. Near term outlook offers minor chop across the remaining two trading days of 2017. The original settlement target of sp'2683 is set to be mighty close.


sp'daily5



VIX'daily3



Summary

US equities saw another day of fractional chop. It was notable that the NYSE comp' broke a new historic high of 12834, making it a day for the bulls. VIX clawed higher for a third consecutive day, settling in the mid 10s. At most, a sporadic burst to the 11/12s is due, but is far more likely next week.
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Meanwhile...



The US equity record highs have become part of almost every Trump speech/comment. If he takes credit for the  gains, what will happen when the market does (eventually) see a retrace of 5, 10, or 'ohh the humanity' 15/20% ?

For those that regularly watched the campaign rallies across 2015/16, they should be well aware of how Trump is contemptful against the shortside traders. Do not be surprised if he comes to blame them for any 'drama' in 2018.
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Another cold day in London city

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--
If you value my work, subscribe to me.





For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.htm

Tuesday 26 December 2017

Boxing day micro chop

US equity indexes closed fractionally mixed, sp -2pts at 2680. The two leaders - Trans/R2K, settled u/c and +0.1% respectively. VIX settled +3.5% at 10.25. Near term outlook offers moderate swings, due to settle the year, very close to original target of sp'2683.


sp'daily5



VIX'daily3



Summary

US equities opened fractionally mixed, and that was how it remained across the day. Seasonally, the 'Santa rally' began today, but so far... there is no sign of it. The equity bulls have nothing to prove of course, after a year of powerful gains.

Market volatility climbed for a second day, settling in the 10s. Whether 9s, 10s, or the 11s though, its arguably all to be regaded as noise. The low teens look out of reach in the near term. The key 20 threshold looks out of range until at least the latter half of January.
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Boxing day gloom, not so bullish.
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... Mrs Brown says that in London, everyone is different, but that means.. anyone can fit it in. I think she must be right, because although I don't look like anyone else, I really do feel at home. I will never be like other people, but thats alright.... because I'm a bear. A bear called... Paddington

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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--

 If you value my work, subscribe to me.


For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html

Monday 25 December 2017

Merry Christmas

Merry Christmas to my subscribers, followers, and readers across the world...




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A trio of festive movies...

Krampus, 2015

Bad Santa, 2003

Rare Exports, 2010

... and there is always Die Hard, Gremlins, and Its a Wonderful life.

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*Don't forget to submit a number/outlook for 2018, although I recognise most of you will wait until after the last trading day of the year. See previous post for details.
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*the next scheduled post is Tuesday Dec'26th at 6pm EST.

Saturday 23 December 2017

Submit your outlook for 2018

It was another bullish week for the US equity market, with the sp'500 net higher for a fifth week, +7pts (0.3%) at 2683, with a notable new historic high of 2694. Near term outlook offers some chop into year end. More broadly, even the mainstream now recognise sp'3K is on the menu for 2018.


sp'weekly



Summary

Of the six indexes I regularly highlight, five broke new historic highs this week. Only the R2K missed out, but even that remains very close to recent highs.

Cyclically, we're on the high side, and the market does look vulnerable in the seasonally weak period of mid Jan-early Feb. At best, there seems a viable threat of a 5% washout, before quickly recovering, and pushing onward to challenge the 3K threshold by mid year.
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Looking ahead

A light 4 day week is ahead...


M - CLOSED - Christmas day
T - Richmond fed
W - Case-Shiller HPI, consumer con', pending home sales
T - Intl' trade, weekly jobs, EIA Pet' & Nat' gas reports,
F - Chicago PMI

*As Friday is the last trading day of 2017, there will likely be some very significant tax-loss selling in select stocks (GE being a prime candidate).

**Keep in mind, the following Monday, Jan'1st, the US market will be CLOSED.
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Looking back to look forward

At the start of the year I provided a year end target of sp'2683.

Original post: https://permabeardoomster.blogspot.co.uk/2017/01/weekend-update-outlook-for-2017.html 


sp'monthly6b


Its notable that this week closed precisely on target, and now its a case of exactly how the year settles. I'll be very pleased with anything +/- 26pts, which does seem probable.
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My outlook for 2018?

I'm still trying to narrow down a broad range to a specific 'best guess' target, along with some broader issues (such as rate hikes, growth).


Now is YOUR opportunity to submit your outlook for 2018. 

I'm interested in two aspects....

Primary: what is your end 2018 target for the sp'500 ?

Secondary: ANY other issues you'd like to raise.. whether equity indexes, individual stocks, GDP, jobs, inflation, oil, gold/silver/copper, bonds. You can even highlight anything socio-political.


--
You can submit your target/outlook via Twitter ( https://twitter.com/permabear_uk ), Disqus (in this, or any future post), or email. If you want to change anything, let me know.

The deadline for submissions: Monday January 1st

I will likely post a detailed outlook for 2018, along with your submissions, no later than the weekend of Jan'6/7th.
-
 
*The next scheduled post will be Tuesday Dec'26th at 6pm EST.

Friday 22 December 2017

Minor chop into Christmas

US equity indexes closed a little mixed, sp -1pt at 2683. The two leaders - Trans/R2K, settled +0.4% and -0.3% respectively. VIX settled +2.9% at 9.90. Near term outlook offers moderate swings across the remaining four trading days of the year.


sp'daily5



VIX'daily3



Summary

It was naturally a day of micro chop into the Christmas break. Most indexes leaned fractionally weak across the day, but in the scheme of things, it was largely all just 'minor noise'.

Volatility itself was subdued, with the VIX settling the week in the 9s. 2017 is set to be the first year since 2005, that we've not seen any price action above the key 20 threshold. 

--
Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Goodnight from London
--

If you value my work, subscribe to me.


For details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html

Thursday 21 December 2017

Awaiting the Christmas break

US equity indexes closed a little mixed, sp +5pts at 2684. The two leaders - Trans/R2K, settled u/c and +0.5% respectively. VIX settled -1.0% at 9.62. Near term outlook offers minor chop into the Christmas break. The sp'2700s and Dow 25k seem probable before year end. More broadly, many are now seeking sp'3K in 2018.


sp'daily5




VIX'daily3



Summary

It was a bullish day, as we did see two indexes - NYSE comp', and Transports, break new historic highs.

As expected, with each day, more of the mainstream are jumping aboard the sp'3K train...


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Today was winter solstice, the long crawl into summer 2018 has begun.

Goodnight from London

Monday 18 December 2017

No Sir, you don't.

US equity indexes closed broadly higher, sp +14pts at 2690. The two leaders - Trans/R2K, both settled higher by a significant 1.2%. The original year end target of sp'2683 has been hit, with 8 trading days now remaining of the year.


Pennyworth, A. (2016), Batman vs Superman

Summary

At the start of the year I posted a target of sp'2683. Its been hit, with 8 trading days now remaining this year. Thats all I have to say about that.
 --

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Details: https://permabeardoomster.blogspot.co.uk/p/subscriptions.html


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... but hey, 99.97% of you don't think so, and you'd rather follow the 'smart guys'...


Good luck with that for 2018 and beyond.

Saturday 16 December 2017

Weekend update - US equity indexes

It was a broadly bullish week for US equity indexes, with net weekly changes ranging from +1.4% (Nasdaq comp'), +1.3% (Dow), +0.9% (sp'500), +0.6 (R2K), +0.4% (NYSE comp'), to -0.1% (Trans). Near term outlook offers a little chop ahead of the Christmas break. The year end target of 2683 is set to be hit.


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

sp'500


The sp' climbed for a fourth consecutive week, +24pts (0.9%) to 2675, with a new historic high of 2679.63. Its notable that the sp' has been net higher for 14 of the past 17 weeks.

Best guess: a fair degree of chop into year end, settling somewhere within the 2670/2710 zone. More broadly, sp'2950/3047 is a valid target for late spring/summer 2018. 

Equity bears have nothing to tout unless a bearish monthly close. For me, this would equate to a monthly close under the monthly 10MA, currently at 2495, and rising by around 25pts a month. So, as of June 1'st, my 'line in the sand' will be somewhere within 2600/2650.
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Nasdaq comp'


The Nasdaq lead the way higher this week, settling +1.4%, with a new historic high of 6945. The 7000s are clearly due within the near term. The 8000s are a valid target by mid 2018. Note core support - from early 2016, is currently around 5900... a rather long way down!


Dow


The mighty Dow climbed a sig' 1.3%, with a new historic high of 24688. The Dow continues to scrape along the upper weekly bollinger. The psy' threshold of 25k is clearly due, whether just before year end, or in January, it really should make little difference. If you believe in sp'3K by mid 2018, that would arguably equate to Dow 26500/27250.


NYSE comp'


The master index settled +0.4% to 12699, with a notable new historic high of 12739. The 13000s are clearly due in early 2018. Core support in mid January will be around 12400.. which looks secure.


R2K


The second market leader - R2K, settled +0.6% at 1530. New historic highs (>1559) look viable before year end. More broadly, 'R2K at 2K' is a valid target for late 2018.


Trans


The 'old leader' - Trans, was the laggard this week, settling -0.1% at 10393. A yearly close >10k looks a given. The 11000s are due in the spring. The hyper bulls should be seeking 12500/13000 for 2018.
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Summary

A bullish week for the US equity market, with four indexes (sp, dow, nasdaq comp', nyse comp') breaking new historic highs.

All indexes have at least 3-4% of downside buffer, before core support - from early 2016, would be challenged.

Equity bears have nothing to tout, unless a majority of indexes break and see a monthly close under their respective monthly 10MAs. That does not appear likely for at least another 5-6 months. For those expecting a sig' retrace in 2018, look to the time frame of Aug-Oct'.


sp'daily6 - YTD price performance


With nine trading days left of the year, Nasdaq comp' is currently +28.9%, dow +24.7%, sp' +19.5%, with the R2K trailing, but still a very respectable +12.8%.
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Looking ahead 

A light week is ahead. It will be the last full trading week until Jan'8th.

M - Housing market index
T - Housing starts
W - Existing home sales, EIA Pet' report
T - Weekly jobs, Q3 GDP (third est'), Phil'fed, leading indicators
F - Durable goods orders, pers' income/outlays, new home sales, consumer sent'

*As the following Monday is Christmas day, Fri'22nd can be expected to be extremely subdued, closing normally at 4pm.
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Extra charts in AH (usually around 7pm EST) @ https://twitter.com/permabear_uk

Have a good weekend
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*the next post on this page will likely appear 6pm EST on Monday.