Monday, 28 July 2014

Volatility fails to hold the morning gains

With US equities seeing a latter day recovery, the VIX failed to hold the moderate gains (intra high 13.64), settling -1.0% @ 12.56. Near term outlook is for the VIX to melt back into the 10s.. and eventually single digit VIX this summer.




*the daily VIX candle is particularly bearish, a red close with a spike, and a failure at the 200 dma, which itself continues to tick slowly lower.

So, some morning gains in the VIX, but it merely makes for a lower spike high. The 10s look due by end of this week.

VIX 20s look unlikely for some considerable time, and I have ZERO interest in being long the VIX.

more later... on the indexes

Closing Brief

US equities started the day weak, but ended the day with fractional gains, sp +0.5pts @ 1978. The two leaders - Trans/R2K, settled lower by -1.1% and 0.4% respectively. Near term outlook is for minor churn... before a rather important Wednesday.



*VIX closed fractionally red, and certainly shouldn't inspire the equity bears.

So..a broadly flat close for the sp'500, not exactly surprising.

The one concern for the bulls should be the R2K, but even that lagging index is 5% above critical support. R2K 1080 would probably equate to sp'1900.. and I sure don't expect either of those to be hit in the near term.

more later.. on the VIX

3pm update - a close in the 1980s?

US equities have seen some moderate swings today, the only issue is whether a close fractionally above..or below sp'1980. Regardless of which side of 1980, Mr Market looks set to settle into minor churn until 'big action' Wednesday.



*second baby bull flag of the day... with the hourly cycles as they are, I wouldn't bet against another wave higher into the close.

Certainly, there is no real downside power... even in the R2K/Trans, which were both -1% earlier this morning.

Personally, I'd rather skip tomorrow.. and just jump straight ahead to Wednesday.

2pm update - flag confirmed

US equities confirm a small.. but clear baby bull flag.. with a break into the sp'1980s. Whether the bulls can attain a daily close in the another matter. Mr Market looks set to move into nano churn mode.. ahead of 'big Wednesday'.


R2K, 60min


*price action confirmed, with a VIX that has turned fractionally red.

Suffice to say... equity bears had a bonus opportunity to exit this morning, and we're now barely 0.5% from breaking a new historic high.

All the bulls need is to see the R2K break >1965, which would really nail anyone who has been short since last week.