Wednesday, 18 October 2017

Another quartet of highs

US equity indexes closed moderately mixed, sp +1.9pts at 2561. The two leaders - Trans/R2K, settled higher by 0.8% and 0.5% respectively. VIX settled -2.3% at 10.07. Near term outlook offers a sig' break lower, with first soft target of 2540/37. Its time for the equity bears to make an appearance.


sp'daily5



VIX'daily3



Summary

US equities opened fractionally higher, and it was enough to generate yet another quartet of new historic highs in the sp', dow, nasdaq comp', and nyse comp'. Price action was a little twitchy though, especially within some of the tech stocks.

Market volatility remains very subdued, with the VIX briefly falling into the 9s today, but settling in the 10s.

Near term outlook offers a long overdue cooling wave. First soft target is sp'2540/37, which should equate to VIX 12s. Even then, that is not something the equity bears should get excited about right? 
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Here in the metropolis...

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

Goodnight from London
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Tuesday, 17 October 2017

Just another threshold

US equity indexes closed moderately mixed, sp +1pt at 2559. The two leaders - Trans/R2K, both settled lower by -0.3%. VIX settled +4.0% at 10.31. Near term outlook offers an overdue sig' break lower, with primary target of sp'2474/61. More broadly, the 2600s remain a given.


sp'daily5



VIX'daily3



Summary

US equities opened in minor chop mode, but with the Dow soon breaking above the soft psy' threshold of 23k. The mainstream does seem to be increasing focused on each 1000pts higher. This afternoon on CNBC the cheerleaders were tentatively daring to mention 'at the current rate... 25k within six months. There is still no talk of 'hyper bullish', or the notion that this could continue for some years .

Its notable that whilst the Dow and sp'500 broke new highs (if fractional) the two leaders - Trans/R2K, did settle moderately weak. It could be argued they are offering an early warning of trouble. We shall see.

Market volatility remains broadly subdued, although the VIX did manage a close outside of the 9s.
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Monday, 16 October 2017

Happy Anniversary

US equity indexes closed moderately mixed, sp +4pts at 2557. The two leaders - Trans/R2K, settled -0.8% and u/c respectively. VIX settled +3.1% at 9.91. Near term outlook offers a long overdue sig' break lower, with prime target of sp'2474/61. Broadly, the US market is super strong, as the 2600s are clearly a given before year end.


sp'daily5



VIX'daily3



Summary

The week began on a positive note, with a trio of new index historic highs (sp', dow, nasdaq comp'). Price action across the last six days has been tediously narrow range, but still leaning to the upside.

With equity strength, market volatility remains subdued, and despite the VIX closing net higher, that still made for a daily settlement in the 9s.

Near term outlook remains unchanged. A sig' break lower is due. If the bears can't manage the sp'2520s by Thursday, then the 2600s could be sought before end month. 
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The crash of 1987

Today is the 30th anniversary of the Oct'1987 crash. However, it really shouldn't be thought of as a one day event. The market peaked August 25th, and then saw an initial down wave of 8.7% into early September. Price action was choppy, but then leaned back upward into early October.

The Oct 2nd high of sp'328 made for a key lower high, and thus began 12 days of horror. Day 11 was 'crash day', but day 12 did see a lower low, but closed net higher.


sp'daily - 1987


Back in 1987 yours truly was just 14 years of age (yeah, you can do the math on my current age). The previous Friday, the Southern UK was hit with a severe hurricane-strength storm, and its a curious thing that Hurricane Ophelia was nearing the British Isles just last night.

I sure wasn't trading in 1987 (my first trade wasn't until 1990!), but I remember the crash, as I was one of those weird teenagers with a deep interest in finance/economics. The US market soon recovered, but it really wasn't until 1993 that the UK market started to break new highs.


Another 1987?

Will we ever see a one day crash like 1987 again? Well, no, as the NYSE would freeze the market at -7%, -13%, and immediately shut the market on an intraday decline of -20%.

see: https://www.nyse.com/network/article/nyse-increases-resiliancy-during-extreme-volatility

Indeed, something I would look for in the years ahead is for the NYSE to tighten the circuit breaker limits. I see a time when the market will be shut on any daily decline of -5%. Many within the mainstream will of course support such trading restrictions/manipulation. I do not.
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It was an unusual day in the metropolis...

Weird skies in London, due to remains of Hurricane Ophelia

Bullish October sunshine

For more pics on 'yellow sky', see https://twitter.com/search?src=typd&q=yellow%20sky

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

Goodnight from London
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