Monday, 26 September 2016

DB - a new historic low

Whilst most world markets - including the US, started the week on a broadly weak note, there was very significant weakness in Deutsche Bank (DB), which settled -7.1% @ $11.85. Near/mid/long term outlook is bearish. Next soft psy' level support is $10.

DB, daily

DB, monthly


*there was an intraday 'flash print' low of $11.23, but that does not appear on all charts/trading software.

Suffice to add, it remains somewhat amusing to see Germany's Merkel talk about how there won't be a bailout for DB. Such talk is to be expected though.

DB is unquestionably... one to watch!

Friday, 23 September 2016

TVIX, UVXY - rough week for the VIX instruments

With equities net higher for the week, the VIX significantly cooled. The 2x lev' bullish VIX instruments of TVIX and UVXY, settled net lower by a severe -25.1% and -25.3% respectively. Near term outlook offers higher equities, with VIX in the low/sub-teens.

TVIX, daily

UVXY, daily


First, an update on the VIX, which saw a net weekly decline of -20.0%.

As for TVIX and UVXY, with the FOMC deciding to refrain (not surprisingly) raising rates, a large amount of uncertainty has been removed, and thus the VIX instruments have been crushed lower.

There is of course the underlying problem of statistical decay. Even if the market can't break significantly higher in the near term to the sp'2200s.. neither does it look liable to break significantly lower. 

For the moment, the VIX-long trade remains dead.

Thursday, 22 September 2016

DIS - a second daily gain

With the main market closing broadly higher for a second consecutive day, there was similar strength in Disney (DIS), which settled +1.1% @ $93.41. Declining resistance is currently in the $95s. A break above the psy' level of $100 looks a given before year end.

DIS, daily

DIS, monthly


*it is notable DIS is currently net lower for a fifth consecutive month.

DIS continues to lag the main market, but it won't take much of a multi-week up wave to break above a few key aspects of resistance.

A challenge of the May 2016 high of $105.98 looks extremely probable before year end.

Next earnings are due in early Nov'... just before the US election.

Wednesday, 21 September 2016

NFLX - broadly struggling

Whilst the broader market closed significantly higher, there was significant weakness in Netflix (NFLX), which settled -3.4% @ $94.88, the worse level in a month. Relative to the main market, NFLX is really struggling. First big support is the 85-83 zone. If that fails, the $70 threshold.

NFLX, daily

NFLX, monthly


The story that spooked the market... see here: Forbes

From a pure price perspective, NFLX is in trouble. The psy' level of $100 is powerful resistance, as especially seen on the bigger monthly chart.

Indeed, price structure could be argued is just a giant bear flag, that stretches back to the Feb' low of $79.95. Under that... its empty air all the way to around $50, which is a rather important level.

Yours truly is one of the biggest fans of NFLX shows - not least the various Marvel related ones like Jessica Jones or Daredevil. Yet, on a pure valuation basis, NFLX would still appear somewhat pricey at $50, and that is barely half of the current valuation.

Tuesday, 20 September 2016

DB - breaks a new historic low

Whilst the broader market saw a day of minor chop, there was continued weakness in Deutsche Bank (DB), settling -4.3% @ $12.41. With the break below the July/Aug' double floor of $12.50/48, the door is now open to the psy' level of $10.00, before year end. Is the ECB watching?

DB, daily

DB, monthly, 20yr (linear scale)


From a pure price perspective, today saw a rather critical short, mid, and long term failure.

Where might the buyers appear?  The $10 psy' level is an obvious level.

Would single digit DB be possible without anything 'bad' happening? Absolutely.. although it would arguably indicate underlying systemic problems.

It should be clear... the market isn't pricing DB at new historic lows for 'no good reason'.