Friday, 31 October 2014

End month trick or treat?

With just one day left of the month, equity bulls have achieved an incredible ramp from sp'1820 to a new cycle high of 1999. On any basis, equity bears must achieve some significant Halloween weakness, back into the 1960s, otherwise it will bode for upside across November.


sp'monthly


Summary

It is pretty clear... if we don't close tomorrow, with the sp -25pts.. back under 1970...the monthly close will be a pretty damn bullish spike-floor candle.. suggestive of upside into year end.
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Looking ahead

Friday will be pretty busy.. with Fed official Williams speaking in South Africa, although it s very hard to say if any comments might be market related.

In terms of econ-data, pers' income/outlays, employment costs, Chicago PMI, consumer sent.
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*I am short from sp'1981, and will seek to exit into the weekend... although considering today's closing level, even the low 1970s look somewhat difficult to reach.
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Crazy market... what else is new?

Yesterday, I was seeking a micro double top of 1990/91. This morning, the market opens a little weak....and on a minor bounce...I short, the market quickly falls to 1974.. before a rally into the afternoon.

All things seemed 'tolerable', until that headline flashed over the Nikkei wires... yet it was a two week old story. How in the hell could the market seriously ramp on that? Having had some hours to reflect on this afternoon... I still can't make any sense of it.

This market is rarely boring. There is always something of interest going on. Friday will be no different. The key issue is whether bears can achieve a significant daily decline to offer some hope for next month.

I see a fair few people touting the sp'2100s, or at the very least, the 2025/50 zone before year end. I could counter and highlight the weakness in Oil, Copper, precious metals, miners... it could be a very long list. Suffice to say, new equity highs simply do not make sense right now, not least with QE having ended.

Goodnight from London

Daily Index Cycle update

US equities closed somewhat mixed, sp +12pts @ 1994 (intra high 1999), with the Dow +1.3% @ 17195. The two leaders - Trans/R2K, settled -0.9% and +0.8% respectively. Near term outlook is still offering a retrace to the sp'1930/25 zone.


sp'daily5


Dow


Trans


Summary

*this afternoon was offering a micro double top in the sp'500 of 1991, but that level was surpassed, arguably due to a story that flashed over the Nikkei news wires... a TWO week old story.
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The break to a new cycle high of sp'1999, with the Dow 17200s is a significant victory for the equity bulls. All that is left for the bulls to achieve now are new historic highs.. and we're only 1% away.

The 'old leader' - Transports, did close lower for the second consecutive day, but still.. equity bears can get confident at all.

There is currently no sign of a turn... and until the VIX is back in the 20s... it remains a very tricky market to play on the short side.
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Closing Brief from Riley



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a little more later...

Thursday, 30 October 2014

Volatility stuck in the low teens

With US equities seeing a new cycle high of sp'1999, the VIX was pressured lower, settling -4.1% @ 14.52 (range 15.75/14.07). Near term outlook is for the 14s to hold as a floor, before renewed equity weakness... at least to the sp'1930/25 zone.


VIX'60min


VIX'daily3


Summary

Suffice to say... VIX remains low.. but on any basis.. we're due another push back upward.. to test the big 20 threshold.

Whether we can break the recent 31.06 high... will of course be entirely dependent on whether the bears can break back under the critical sp'1900 threshold. After this afternoon's crazy action (based on a two week old news story)... that won't be easy.
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more later... on the indexes

Closing Brief

US equities closed somewhat mixed, sp +12pts @ 1994. The Dow (greatly influenced by Visa), +1.3%. The two leaders - Trans/R2K, settled -0.9% and +0.8% respectively. Near term outlook is very borderline, equity bulls desperately need a monthly close at least in the sp'1960s.


sp'60min


Summary

Without question, today was the craziest day since the Wednesday of two weeks ago, when we floored at sp'1820....and with Fed official bullard alluding to QE3 not ending... and with QE4 viable.

Today's recycled news via the Nikkei news wires (Japanese Govt. to increase stocks as percentage of investment funds) has really caused some havoc to a great many bears.

I'd sure like to know who the hell re-issued that news story... and why. Keep in mind that it was 2am in Japan when the story appeared.
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*I remain short from early this morning, from sp'1981... clearly underwater, and wondering what Halloween has in store for all those in market land

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more later... on the VIX