Thursday, 9 May 2013

Volatility spikes...a little

With a late day rumour of 'QE tapering', the VIX jumped 6% into the mid 13s, but as is usual, slipped lower into the close. The VIX closed +3.7% @ 13.13. Near term trend is very much that of minor chop. Baring a move into the 15s, the moves are all 'mere noise'.




The moves on the hourly chart are just so small, but I thought merited being added today.

Daily chart says it all though, the day to day VIX remains at very low levels, and until we break into the mid teens again, there is no reason why the bears should have any visions of sp<1597.

more later..on those indexes

Closing Brief

The main indexes were choppy for most of the day until a late day 'QE tapering' rumour upset the algo-bots. The headline indexes closed moderately lower by 0.1 to 0.3%, whilst the Transports saw somewhat significant falls of 1.2%. Metals and Oil both closed weak.



Were it not for the little 3pm rumour, today was turning out to be just another entirely boring day.

What was most bemusing today was seeing the cheer leading maniacs get edgy about an index fall of 0.3%.

*the Bernanke is speaking tomorrow at a Chicago Fed banking conference. I'm not sure if the media will pay that any attention, but someone will doubtless be listening for signs of 'tapering'.

the usual things..across the evening.

3pm update - its all minor noise

Another day of near zero volume, minor up..minor down, none of it really matters. Primary trend remains to the upside. Baring a break <sp'1600, bears have nothing to get excited for. Precious metals and Oil starting to slip lower again, USD has doubled its gains to a significant 1%.




Transports are the weakest index right now, and are perhaps leading the way lower into Friday.

These moves though are so small, as to be largely irrelevant.

I remain interested in long Oil, or short silver, but not at these levels/time.

UPDATE 3.03pm..clearly the USD strength is pressuring everything right now...and of course, we are due some kind of minor pull back.

Obvious rising support around 1620/15, and I sure don't expect a close under that.

3.17pm...watching clown channel, queen cheer leading getting concerned about the market 'struggle' this afternoon.

Can you believe it, they are getting twitchy with an index fall of 0.4%.

3.27pm Maria 'we're WELL off the lows' lol, so predictable, but still kinda funny.

How about we close green to really annoy those bears seeking a major turn lower?

Gold still weak, -$14, with Oil -0.6$,   but there really isn't any that significant going on, other than the gains in the USD.

3.44pm It is time for someone to post another twitter rumour yet?

What about 'Fed to increase POMO to 50bn a day, and buy PCLN' ?

Hey, don't worry, 'we're off the lows of the day'. Great news huh?

2pm update - latter day melt

The earlier decline of sp -5pts is now already full negated, and we've broken a new high in the 1635s. There is simply no reason why today will end any differently. Metals and Oil have similarly recovered most of their earlier declines. USD is holding gains of almost 0.5%



What to say? Its just the same thing..every day.

Sure it will end at some point, but we could be looking at months, rather than just another week or two of this.

I will hold to the primary target of Trans 7200, which equates to sp'1800s by the late summer.

1pm update - Gold set for another burst higher

Gold was down $11 in the early morning, but its recovered again. There is gap resistance around GLD 143, if that can be closed over, it opens up another $3-4 next week. It would then seem likely that a very large bear flag - with a double gap fill, will be complete.

GLD, daily


*very little change in main indexes, hence a little diversion with Gold

I can't see GLD putting in any series of closes >148, and that will probably make for extreme resistance next week. The SLV chart looks largely the same, except a much weaker bounce.

I never trade GLD actually, Silver is twice as volatile (usually), and makes for much more dynamic trades.

As for the main indexes, there remains the real threat of latter day recovery/melt.

STX (seagate) still -5%, a few more days of downside look somewhat likely.

12pm update - just another buying opportunity

The main indexes are somewhat mixed. Those bears hoping for even a moderate daily decline of 0.5%, are seemingly going to be disappointed. More than likely, we'll just see the usual latter day recovery/melt. Metals and Oil continue to show a little weakness.




No reason why we can't close green, after all, there are virtually no sellers out there.

Oil is kinda interesting, it was -1% earlier, maybe another 1% tomorrow, which would make for a reasonable buying level into the early summer.

VIX update from Mr T.

back later

11am update - minor weakness

The market is seeing a little weakness, but its to be dismissed. Baring a few daily closes back under sp'1600, minor declines like this morning are the proverbial 'dip buying opportunity'. Metals and Oil are weaker, but then, the USD is higher, and this is putting a little pressure on.



There will be very strong channel support @ 1610, but honestly, does anyone think that is viable today or tomorrow? Bears will be lucky just to see 1625/20.

VIX is 4% higher, but its arguably just 'noise'.

Oil is interesting as a viable long, but I'm just not interested at these levels.

Seagate (STX) is under pressure, I'm not sure why... obvious support in the 35 area.

I happen to like my Seagate drives. The new SSD ones look nice!

10am update - morning chop

The indexes have opened with some minor chop. There is no reason to expect today to be any different than yesterday...or the day before. Default trend remains to the upside, with algo-bots in total control. Oil and the metals are both lower, but nothing significant yet.



Hourly chart allows sp' 1620 by the Friday close, and that would do nothing to dent the current up trend, which stretches back to the April'18th low. Its possible we could even get a weekly close in the 1640s, which would really start to rattle those who are continuing to short into the ongoing rally.

*Oil is on the slide, but I don't particularly want to go long until USO is 33.70/60s - where there is a very clear gap to fill. That doesn't seem likely today, perhaps tomorrow.

USO, 60min

Considering the geo-political issues out there, short Oil would seem outright stupid at the moment, never mind the fact that Oil is ticking higher on the bigger weekly/monthly charts again.

So, I'm going to sit back, and see if we can break <34 later today. 

Pre-Market Brief

Good morning. Futures are a touch lower, sp -2pts, we're set to open @ 1630. Gold is noticeably weak again, whilst Silver is flat. Oil is down almost 1%. USD is actually higher this morning, but only 0.1% so far.



*weekly jobless claims: 323k, that's on the low side.

A touch of weakness to start the day....with latter day algo-bot melt...right?

Another 3-4 months of this nonsense, getting us to Trans 7200, sp'1800s.

Its a disturbing scenario indeed.

*I remain on the sidelines, but am looking to go long Oil, and short Silver. However, I'm not in any particular hurry for either yet.

Keeping the bigger picture in mind

Another day of algo-bot melt to the upside. Even the closing hour saw a minor ramp into the close, if only to spite those bears who had shorted the open. Near term trend is somewhat toppy, but the 3-4 month outlook looks very bullish.

Trans, weekly3, rainbow

R2K, weekly


The Trans and the R2K remain the two leading market indexes, so I thought I'd end the day with them.

Both are clearly in a VERY bullish up trend. There is plenty of upside available in the immediate term. The upper bollinger on the trans offers the low 6500s, that is a good 2%. I don't expect another 2% this week, but certainly Trans looks set to close May in the 6500/6600 zone. That will put it within 10% of the 7200 target by late August.

Looking ahead

We have the weekly jobs data tomorrow, and if that comes in okay, then sp'1640s will be available by late morning. There remains the threat of a very brief 1-2 day down cycle to shake out the weaker bulls, but I sure can't envision breaking <1600 any time soon.

On balance, the 'melting' is likely to continue for  weeks, if not months.

Goodnight from London

Daily Index Cycle update

The fifth consecutive daily gain for the US equity market, with the headline indexes climbing 0.3-0.5%. The Transports managed a 0.2% gain, with an impressive close in the 6400s. Near term trend is looking somewhat toppy, but there is absolutely no sign of a turn lower.





Another day of algo-bot melt, and the bulls must be very amused with the little ramp into the close. No doubt some of those bears who were shorting the open were closing out at the end of the day, on minor losses.

This was indeed the fifth day higher since last Wednesday's 1% decline (although it was a much sharper -2.4% on the Trans/R2K), I honestly can't fathom why almost every bear is not seeing this as a clear breakout to the upside.

It is surely the start of a major new multi-month up is most clearly seen on the Trans' weekly chart.

*I remain on the sidelines, seeking to go long Oil, and short Silver...but I am in no hurry for hitting buttons any time soon.
a little more later