Wednesday, 6 March 2013

Volatility a touch higher

With the indexes largely trading sideways - after Tuesdays strong gains, the VIX did much the same. With some minor chop in the closing hour, the VIX closed +0.4%  @ 13.53. Near term trend looks weak, the only issue is whether the previous low of 12.08 will be broken.




Importantly, the daily MACD cycle has now seen a bearish cross, and we're back to a negative cycle.

We could trundle/melt lower for some days, if not a few weeks.

When the sp' is trading around the 1555/65 level, it will be interesting to see just how low the VIX gets. Right now, a new low <12.08 looks somewhat 'difficult'.

The key VIX 20 threshold looks an awful long way up. Even a Dow -260pt day still failed to get the VIX to what used to be relatively typical volatility level.

more later..on the indexes

Closing Brief

A quiet day in market land. We melted higher..but the minor gains started to fade into the close. The hourly index charts are offering a pretty good bull flag, with upside into the 1550/60s by the Friday close. The big issue remains, how big a down cycle will we get in the weeks/months ahead?



A bit of minor chop to conclude Wednesday. Not much to add really, aside that I guess we'll be breaking above that bull flag..either late tomorrow..or more likely on Friday.

A weekly close in the 1560s..would be pretty fierce way to end the first full trading week of March.

*I holding long overnight, via Silver.and Oil. Both look okay for a few days..and maybe a few weeks.

more later...on the usual stuff

3pm update - the melt

A quiet afternoon, but as ever, low volume allows the algo-bots to more easily melt the market higher. Certainly, the gains are small, but for the bears..its just relentless slow pain.



*its not labelled on the chart, but you could argue thats just a large bull flag setting up on the hourly index chart.

The 'melt' is unquestionably largely due to the bots.

I sure don't expect the SEC to do anything about even if 'somehow' the doomer bears did get their major lower..whether this year..or next...the bots will still be there..ready to melt it all back  higher.

*Oil..and metals climbing in the past hour..will be interesting to see where they close.

back..after the close.

2pm update - quiet afternoon

The indexes are marginally higher still, but its turned out to become a very quiet day. There is nothing going on, and it seems everyone is now sitting back and waiting for the Friday headline jobs data. Dollar continues to hold significant gains, metals and Oil holding above earlier lows.




VIX still looks like it'll be trading in the 12s..if not the 11s next week.

Target remains sp'1550/60s..which is easily viable. The big issue is whether we'll just keep on melting up into April..before having our first chance of a 10% down wave.

There ARE many bearish issues out there, but as I keep noting..the relentless daily dose of POMO remains a real problem for those seeking multi-week downside.

I am back on the Silver train...and will also hold long Oil too.


I have to think, the low 29s are very reasonable target.

back at 3pm

12pm update - slow melt

The market is probably merely consolidating before more late day melt upward. There is simply no reason for the current move not to continue for at least a further 3-5 trading days. Dollar is higher, although precious metals snapped higher earlier. Oil is recovering after EIA report.

SLV, daily2

USO, daily2


With the econ-data coming in at least 'reasonable', underlying trend is being supported by the data.

I am open to an equity decline this spring, even as low as the low 1400s, but with continuing support from the really is looking just so very difficult.

*I'm finding it too annoying to go long indexes, so I'm meddling in commodities instead. Bailed on Silver earlier, might re-long later in the day. Am long Oil this morning..if only for a 'near term' minor rally.

VIX update, from Mr P.

back at 2pm

10am update - happy anniversary

The main market is 'somewhat' higher than the 666 low from four years ago. Seriously though, there just isn't any power on the bearish side, and even if there is anything to spook the market in the next few weeks..or months...the market still has its QE-pomo fuel.




Higher highs..and higher lows..its that simple.

Right now, the notion of getting back to down to where we started the year @1400....just seems near impossible.

We'll just have to see how we trade next week, when we might be in the sp'1560s..

*Oil is lower...metals a touch weak. The higher dollar is not helping.

back later

Four years...and still waiting

March 6'th will mark the fourth anniversary of the infamous 666 low in the sp'500. So much has happened since then, not least the loss of many good traders who have quit the casino table since the market floored that Friday in 2009. For the bears...its unquestionably been a difficult, and often costly four years.

sp'daily - Feb/March 2009

sp'monthly3d - waiting for the red candle


The market low of 666 remains a kooky irony, and its a wonder that we have made it this high in just four years.

The fact we closed today at a new post 2009 high of sp'1539, and will probably close tomorrow even higher, is but another sprinkling of salt in the wounds of those bears still trading this market.

Bears...still waiting

Monthly chart 3d illustrates pretty clearly how the primary trend remains starkly bullish. 2012 was bizarrely strong, and the two pull backs we did see didn't even merit a red candle on the Elder Impulse style of candle.

As many leading chartists recognise, even if the market does put in a key cyclical top this year, its going to take some considerable time - probably 6-9 months, to really build serious downside momentum.

The real problem for the bears though, remains the Fed. Until the Fed end the QE - especially the POMO program (45bn a month), its going to be extremely difficult for the bears to string together any kind of significant decline.

I have the 'small' hope that the Fed will end the POMO in Q3. If that is the case, the bears will have their first opportunity of a multi-month down wave since summer 2011. Yet if the Fed just keep on printing..and if nothing 'spooks' the market...then sp'1600s will be hit..and forth.

Looking ahead

Factory orders and ADP jobs data are due Wednesday, although the Friday Govt' jobs data will be much more important. If the latter at least comes in 'reasonable', >170k, then the market will surely close the week in the sp'1550s.

As for the anniversary, maybe the doomer bears should all go buy a cake and some candles.

I've not looked lately, but I've yet to see a shop that stocks 'bearish engulfing' candles.

Goodnight from London

Daily Index Cycle update

An important day for US equities, with the Dow breaking a new historic high, and the Sp' clearing the recent 1530 high. There is now easy upside to the 1550/60 area, although 1600s are viable by late April, but that will be very difficult.





The transports continues to lead the way. It was the first to break higher in mid-December, and its now comfortably in the 6100s. 6400/6500 seems likely within the next few weeks. The only issue is whether 7000s are hit before the next major down wave of 10% or so.

Dow looks set to hit 14500 or so by late March, with sp'1550/60s.

It is going to be VERY difficult for the bulls to put in any sustained daily closes >1570.

A little more later