Tuesday, 21 October 2014

The bounce continues

US equities continue to climb from last Wednesday's low of sp'1820, and we're now a clear 4% higher in the low 1900s. Even a bounce to the 1950/60 zone will not do enough to reverse the technical damage recently done to the bigger monthly cycles.


sp'weekly7


Summary

... slow day.... suffice to say.. despite the daily net gains, we start another week with a red candle on the weekly 'rainbow' cycle.

It should be a clear reminder of the underlying price momentum.
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Looking ahead

The only data due is existing home sales (10am).

*there is QE of around $1bn
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Goodnight from London

Daily Index Cycle update

US indexes closed significantly higher, sp +17pts @ 1904. The two leaders - Trans/R2K, settled higher by 1.0% and 1.1% respectively. Near term outlook is inclined to the upside, with continued gains into the 1920/50 zone.


sp'daily5


Dow, daily


Summary

Little to add, on what was a rather tedious day.

Next resistance is the 200 dma of sp'1906, but rather more important, the 50dma (1966) which is rolling over, and as many recognise, will be offering a death cross in November.
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a little more later....

Monday, 20 October 2014

Volatility knocked lower

With equities climbing for the third consecutive day, the VIX melted significantly lower, settling -15.6% @ 18.57. Near term VIX outlook is bearish, with equities seemingly headed for a straight up move to sp'1920/50 zone, before resuming strongly lower.


VIX'daily3


Summary

Suffice to say... the third consecutive daily decline for the VIX, and the 31s now look a very... very long way up.
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I certainly don't expect a return to the 30s until the latter half of November.
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more later... on the indexes

Closing Brief

US indexes closed with borderline significant gains, sp +17pts @ 1904. The two leaders - Trans/R2K, settled higher by 1.0% and 1.1% respectively. Near term outlook is offering more likelihood of upside to 1920/50 zone, before the low 1800s.


sp'60min


Summary

...a rather tedious start to the week, as the bull maniacs managed to re-take the 1900 threshold..  but still a touch below the 200 dma of 1906.
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Regardless of any continued bounce to the 1920/50 zone (even 1960s seem just about viable), the monthly cycles are warning of serious trouble in mid/late November.
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more later... on the VIX