Tuesday 28 February 2023

February settles

US equity indexes closed a little weak, SPX -12pts (0.3%) at 3970. Nasdaq comp' -0.1%. Dow -0.7%. The Transports settled -0.7%. R2K -0.04%.

SPX - daily

VIX - daily

Summary

US equities opened in minor chop mode. There was a little cooling to fully fill Monday's opening gap to 3970, with further chop into the late afternoon. A final minute drop saw a new intraday low of 3968, and settling at 3970.

Volatility was ground lower into end month, the VIX settling -1.2% to 20.70. 


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

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Monday 27 February 2023

Starting positive

US equity indexes closed on a positive note, SPX +12pts (0.3%) at 3982. Nasdaq comp' +0.6%. Dow +0.2%. The Transports settled +1.3%. R2K +0.4%.

SPX - daily

VIX - daily

Summary

Equities began the week on a positive note, the SPX pushing to 4018, before a cooling wave to 3981. There was a secondary push upward... but it never cleared the early high, with cooling to 3973, and settling at 3982.

Volatility was muted, the VIX printing 21.41, but cooling back to settle -3.3% to 20.95.
-

Full moon is March 7th


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Goodnight from London
--

 

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Saturday 25 February 2023

Weekend update - US equity indexes

It was a bearish week for US equity indexes, with net weekly declines ranging from -3.3% (Nasdaq comp', Transports), -3.0% (Dow), -2.9% (R2K), -2.7% (SPX), to -2.4% (NYSE comp').

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

sp'500

Nasdaq comp'

Dow

R2K

NYSE comp'

Trans

Summary

All six US equity indexes settled net lower for the week.

The Nasdaq and Trans lead the way down, whilst the NYSE comp' was most resilient.

Weekly momentum has turned negative in the Dow. The other indexes can be expected to follow in March.


Looking ahead

Earnings:

M - FUBO, LI, NAT, TREE, FRPT, OXY, ZM, WDAY, FSK, RRC

T - TGT, NCLH, AZO, SJM, INSW, RIVN, AMC, MARA, FSLR, NVAX, BLNK, SPCE, MNST, A

W - LOW, DLTR, KSS, ANF, JACK, PBR, NIO, WEN, CRM, SNOW, PLUG, SPLK, OKTA, CELH, VEEV

T - M, KR, BBY, BILI, BUD, COST, AI, CHPT, MRVL, ZS, AVGO, JWN, HPE, DELL, VSCO

F -

-

Econ-data/events

M - Durable goods, pending home sales

T - Intl' trade, wholesale invent', Case-Shiller HPI, consumer con'

W - ISM manu', construction, EIA Pet', vehicle sales

T - Weekly jobs

F - ISM serv'

*as Tuesday is end month, I would expect dynamic price action on higher vol'

-


Final note

February is due to settle net lower. Bulls can tout a new multi-month high of 4195, whilst the bears can note a distinctly spiky candle, indicative of exhausted bulls.


The Oct' low of 3491 isn't going to hold, is it? March/early Spring should offer increasing volatility, with some 'market drama', and who doesn't love some of that?

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Have a good weekend
--

*the next post on this page will likely appear 5pm EST on Monday.

Friday 24 February 2023

Big supports tested

US equity indexes closed broadly lower, SPX -42pts (1.0%) at 3970. Nasdaq comp' -1.7%. Dow -1.0%. The Transports settled -0.5%. R2K -0.9%

SPX - daily

VIX - daily

Summary

US equities opened significantly lower, after hotter than expected PCE/inflation data. The SPX broke a new cycle low of 3943, just a few points above the daily 200MA and the monthly 10MA. From there... a recovery, if very choppy into the late afternoon, settling at 3970.

Volatility didn't mirror the lower low in equities with a higher high, instead the VIX only printed 22.90, and cooling back to settle +2.5% to 21.67.

Today was notably the release date for 'Cocaine Bear'...


Its clearly a 'sign'.
-

A naturally chilly winter's day


Next full moon... March 7th


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--


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Thursday 23 February 2023

A lower low

US equity indexes closed on a positive note, SPX +21pts (0.5%) at 4012. Nasdaq comp' +0.7%. Dow +0.3%. The Transports settled +1.1%. R2K +0.7%.

SPX - daily

VIX - daily

Summary

US equities opened moderately higher, with the SPX printing 4028, before swinging lower to print a new s/t low of 3969. There was an afternoon recovery to 4021, with the SPX settling at 4012.

Volatility was subdued, the VIX printing 22.43, but cooling to settle -5.2% to 21.14.
-

The moon, Jupiter, Venus, and some cranes


Next full moon March 7th


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

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Wednesday 22 February 2023

Midweek chop

US equity indexes closed a little mixed, SPX -6pts (0.1%) at 3991. Nasdaq comp' +0.1%. Dow -0.2%. The Transports settled -0.6%. R2K +0.3%.

SPX - daily

VIX - daily

Summary

US equities opened a little higher, but the gains were shaky from the start, with the SPX printing a new cycle low of 3983. From there... clawing upward into the mid afternoon. The closing hour saw a new low of 3976, with a mini ramp to settle at 3991.

Volatility was a little mixed, the VIX printing 23.45, if cooling back to settle -2.5% to 22.29.


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

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Tuesday 21 February 2023

Starting weak

US equity indexes closed very significantly lower, SPX -81pts (2.0%) at 3997. Nasdaq comp' -2.5%. Dow -2.1%. The Transports settled -3.2%. R2K -2.9%.

SPX - daily

VIX - daily

Summary

US equities opened broadly lower, and slid into the mid afternoon, the SPX printing 3995. The late afternoon saw considerable chop... settling at 3997.

Volatility picked up, the VIX settling +14.2% to 22.87.


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

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Saturday 18 February 2023

Weekend update - US equity indexes

It was a mixed week for US equity indexes, with net weekly changes ranging from +1.5% (R2K), +0.6% (Nasdaq comp', Trans), -0.1% (Dow), -0.3% (SPX), to -0.4% (NYSE comp').

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

sp'500

Nasdaq comp'

Dow

R2K

NYSE comp'

Trans

Summary

Three US equity indexes were net higher for the week, with three net lower.

The R2K was very significantly higher, whilst the NYSE comp' was moderately lower.

Weekly momentum in the Dow will be prone to turning negative w/c Feb'27th. If it happens... other indexes can be expected to follow in March.

Looking ahead

It will be a short four day trading week, with Monday CLOSED for Washington's birthday

Earnings:

M - *CLOSED*

T - WMT, HD, MDT, TECK, FLR, TAP, COIN, PANW, SAND, RIG, FANG, PXD, CHK, CZR, TOL

W - BIDU, TJX, FVRR, WIX, OSTK, GRMN, IQ, NVDA, LUCID, U, ETSY, TDOC, APA, CTRA, BROS, RUN

T - BABA, MRNA, LNG, DPZ, W, PLNT, NKLA, NEM, YETI, SQ, CVNA, MELI, BKNG, WBD, WISH, SWN, BYND, INTU, FTCH

F - EOG

-

Econ-data/events

M - *CLOSED*

T - PMI manu', PMI serv', existing home sales

W - EIA Pet' report, FOMC mins (2pm)

T - Weekly jobs, Q4 GDP (print'2)

F - Pers' income/spending, new home sales, consumer sent'.

-

Final note

It was a mixed week for US equities, as whilst there was some downside, the equity bears are still not managing anything significant and sustained.

There are a few subtle signs on the daily, weekly, and monthly charts, that we've put in a key high from sp'4195. Yet... lets be clear, its nothing decisive. For that, we arguably need to see a break and hold <4K. 

So long as we hold under last week's high of 4159, I'm seeing rallies as valid re-short opportunities. Any break >4160 would open the door to the 4200/300s, but that looks overly difficult.

Even Goldman are now touting another three rate hikes (I assume 25bps each), which would take rates to 5.25-5.50% as of June 14th. But what if inflation starts ticking back upward? This past week's PPI data was supportive to the notion that we will see a secondary wave upward. 

What would the Fed do if headline CPI is back in the 7s, never mind anything higher?  

Right now, the mainstream hacks and associated 'smart guys', are assuming the Fed halt rate hikes by mid year, and then start cutting. 

What if CPI 8s or the 9s? We could expect the Fed to hike EVERY meeting - of which there are seven more this year, by 25bps. That would result in a net hike of 175bps to 6.25-6.50% as of Dec'13th.

As of the Friday close, the US 10yr yield stood at 3.82%.


Multi-month price structure is a bull flag.
Big target is psy' 5.00%... last printed in July 2007.
Above 5, its largely empty air to around 7.00%... last printed in July 1996. 

Even if we only see 5.00%, the equity/capital markets would have to massively adjust.

The mainstream remain deluded of course. The usual suspects are being regularly rolled out, whether its onto CNBC, Bloomberg, or FOX Business... all touting the party line of 'the second half recovery'.

Its kinda funny in a way, as they do it every. single. year. There is no need to worry about how difficult it might be in H1, as H2 will offer a second half recovery, right?

They never really give the reasons why, or quantify what exactly they mean by such a recovery, but they tout it all the same.

Ohh, you think - as Prof' Siegel of Wharton, that the Fed will cut rates in H2 ? 

Okay, then I suggest you go see what happened to equities each time the Fed cut rates.

None of this inflation or rate hike discussion has even considered any of the 'wild cards'. I'd hope you know of the main ones.
-

Bonus chart....



The US 10yr/2yr spread stands at -78bps. Whilst most focus on when the spread turns negative, what actually matters is when it turns back to positive. 

Many would do well to stare at the above chart for a good hour.
Notably, alarm bells were merited in Sept'2019, Feb'2007, and Nov'2000. 

Right now, the spread might turn positive in April or May. If yes, then all those touting a second half recovery can be derided for what they are.... utterly clueless consensus-sheep.

In any case... enjoy the current calm, and the subdued volatility. Sooner or later... everything is going to spiral, and if you're not wearing a quality seat belt and a titanium crash helmet, it won't end well.


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Enjoy the long weekend
--

*the next post on this page will likely appear 5pm EST on Tuesday, Feb'21st.

Thursday 16 February 2023

A typically red Thursday

US equity indexes closed significantly lower, SPX -57pts (1.4%) at 4090. Nasdaq comp' -1.8%. Dow -1.3%. The Transports settled -1.2%. R2K -0.9%

SPX - daily

VIX - daily

Summary

US equities opened significantly lower, on hotter than expected PPI data. The SPX printed 4091, with the VIX printing 20.00. Yet... that there was yet another upside reversal, that continued into the mid afternoon.

The Fed's Bullard upset the cart in the closing hour...


... with equities spiraling back lower, and the VIX spiking, even clearing above the key 20 threshold.

Volatility was mixed, the VIX spiking to 20.00, ground lower to 18.43, but swinging back upward to settle +10.6% to 20.17.


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

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Wednesday 15 February 2023

Midweek chop

US equity indexes closed on a positive note, SPX +11pts (0.3%) at 4147. Nasdaq comp' +0.9%. Dow +0.1%. The Transports settled +0.3%. R2K +1.0%.

SPX - daily

VIX - daily

Summary

US equities opened on a weak note, but all the bears could manage was sp'4103, before recovering into the early afternoon. The mid/late afternoon saw considerable chop, if leaning upward to settle at 4147.

Volatility was ground lower, the VIX settling -3.6% to 18.23.
-

Bullish gold... if not the commodity.


A fine winter's evening


Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London
--

 

If you value my work on Blogger, Twitter, and would like more of the same, then subscribe to my intraday service! For details and the latest offers, see: https://www.tradingsunset.com