Wednesday, 21 February 2018

Six years

US equity indexes closed on a very weak note, sp -14pts at 2701. The two leaders - Trans/R2K, settled +0.3% and +0.1% respectively, but way below earlier highs. VIX settled -2.8% at 20.02. Near term outlook offers a retrace to 2670/60s. There is a risk this will be greatly exceeded, as the mainstream are using the excuse of higher yields to panic.




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sp'daily5



VIX'daily3



Summary

US equities opened a little higher, and battled to build moderate gains into the afternoon. The Fed' minutes appeared at 2pm, and the algo-bots initially spiked the market to a new intraday high of 2747. However, as bond yields climbed, the mainstream used it as another excuse to panic.The sp' saw a mini implosion, swinging 46pts lower to settle at 2701.

Volatility naturally had a mixed day, crushed lower to a new cycle low of 16.97, but then seeing a mini ramp, to settle just above the key 20 threshold.

To be clear... a short term retrace does seem underway from last Friday's high of sp'2754. I'm looking for the 2670/60s, but its possible we will see a few days of sig' weakness beyond that, to come close to testing the recent key low of 2532.
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Six years

Feb'22nd will mark six years since I started regular online postings about the world's most twisted casino.

As well as my mini legion of paying subscribers, I do also want to thank a few of those people who first linked back to me in 2012, not least Chartrambler, Joe McVerry, and 'Albertarocks'. There are others, some of whom are still listed within my blog links lists.

Things have greatly changed here, since I took my intraday posting to a subscription basis in May 2016. I still endeavour to provide something useful here... if only a couple of charts with a few short paragraphs.

I have long intended to 're-brand' both my public and private sites to something that better describes me. In that... I've failed. I'm frankly... just exhausted. For the moment, the quirky online moniker of 'Permabear Doomster' still lives... but it (hopefully) won't be around forever.
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Open day Thursday?

I'm having technical problems with the server that hosts my subscription site. I might just post everything here tomorrow. We'll see.

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

Goodnight from London

Tuesday, 20 February 2018

Leaning weak

US equity indexes closed broadly weak, sp -15pts at 2716. The two leaders - Trans/R2K, settled -1.5% and -0.9% respectively. VIX settled +5.9% at 20.60. Near term outlook offers cooling to around sp'2670, which would likely equate to VIX 25/30. M/t outlook remains bullish, with big target of 2950/3047, where things will get real interesting.


sp'daily5



VIX'daily3



Summary

It was a day of moderate chop, opening lower to sp'2717, recovering to 2737, but then breaking a new low in the afternoon of 2706. Volatility remains relatively elevated, with the VIX settling above the key 20 threshold. Further cooling to around sp'2670 is due within days, and that should equate to VIX within 25/30 zone.

To be clear, I do NOT expect 2532 to be broken, before a push to big target of 2950/3047 zone, where they are many key aspects of resistance. That will clearly take some months to play out.
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Bonus chart: TLT, monthly


The bond bulls should be very concerned at what is a decisive break of the multi-year upward trend. Inherently, a fall in bond prices leans to higher equity prices. Further, I would look for direct capital flows out of bonds and into equities.

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

Goodnight from London
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Saturday, 17 February 2018

Weekend update - US equity indexes

It was a powerfully bullish week for US equity indexes, with net weekly gains ranging from 5.3% (Nasdaq comp'), 4.3% (sp'500), 3.8% (R2K), to 3.6% (Trans). Near term outlook offers a retrace of 2-3%, but then resuming upward across March. More broadly, next big upside target is the sp'2950/3047 zone.


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

sp'500


The sp' saw a powerful net weekly gain of 112pts (4.3%) to settle at 2732, with a Friday peak of 2754. Note the weekly 10MA, which the market settled under for a second consecutive week.

Best guess: s/t cooling of 2.5% to around 2670, before swinging back upward across March. Big target remains the 2950/3047 zone, where the market will be extremely prone to becoming stuck. Considering the recent correction of 11.8%, the next bearish wave could be expected to be somewhat bigger, on the order of 15/20%. Again though, any subsequent rebound would likely be equally strong. The year end target of 3245 still looks good.

Equity bears have nothing to tout unless a bearish monthly close. For yours truly, this would equate to a monthly settlement under the monthly 10MA. That currently stands at 2574, and is rising by 30/40pts a month. It is possible we will see such a monthly close this summer, but I would expect a fast rebound within the following 1-2 months. The price action from summer/autumn 1998 is a good example.
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Nasdaq comp'


Tech is leading the way back upward, seeing a very powerful net weekly gain of 5.3% to 7239. S/t cooling to 7100/7000 looks due, before resuming upward across March. The 8000s look very viable by mid year.


Dow


The mighty Dow rebounded by 1028pts (4.25%) to 25219. S/t cooling of 500/600pts looks viable within the near term, before resuming upward to break new historic highs in the spring/early summer.


NYSE comp'


The master index gained a very significant 3.8% to 12874. Near term outlook offers some cooling of around 2%, before resuming upward. New historic highs (>13637) look very probable within 2-3 months, with the 14000s viable this summer.


R2K


The second market leader - R2K, gained 4.45% to 1543. Half of this week's gains could be eroded within 3-5 days, but then resuming upward into March. New historic highs (>1615) look very viable by late spring, not least if rates are raised March 21st (bullish financials) and if WTIC (bullish energy stocks) is close to the psy' $70 threshold. Right now, 'R2K @ 2K' still looks out of range until spring/summer 2019.


Trans


The 'old leader' - Transports, rebounded by a very significant 3.6% to 10502. S/t cooling of 200/300pts appears probable, before resuming upward with the rest of the market. Its notable that higher WTIC/fuel prices will be a significant downward pressure on the transportation stocks. However, US growth should be enough to negate this factor, although the Trans will likely lag the rest of the market across this year.
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Summary

A powerfully bullish week for all six of the main indexes.

Tech is leading the way upward, whilst the Transports is the laggard.

The recent downside was powerful, but the rebound is equally so, and indicative that US equities still retain underlying super strength. That view will be fully confirmed if the majority of indexes can break new historic highs in late spring/early summer.

Equity bears have nothing to tout unless most indexes see a bearish monthly close. Even then, I'm highly inclined to see that as just a washout, in the style of 1998 or 1987.  
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Looking ahead

There is very little on the schedule, within what is a 4 day trading week...

M - CLOSED
T - -
W - Existing home sales, FOMC mins (2pm)
T - Weekly jobs, leading indicators, EIA
F - -

*there are just a few fed officials on the loose, notably Dudley (Thurs'/Fri')
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Enjoy the three day holiday weekend
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*the next post on this page will likely appear 6pm EST on Tuesday.