Thursday, 8 August 2013

VIX closed with a reversal candle

Whilst the main equity indexes closed with moderate gains, the VIX managed to close with a classic reversal candle, settling -1.9% @ 12.73. Near term trend is offering increased volatility, with the next target of 14.50/ early as late Friday - with sp'1670s.




As ever, a reversal candle (hollow red) is always something to pay attention to.

With equities seemingly stuck a touch under sp'1700, I am looking for a Friday VIX jump into the 14s..possibly even low 15s, which should equate to sp' 1670s.

As ever, it could drag out into early next week, but we're certainly due for some increased equity downside action.

Even an sp' drop of 20/25pts would not rank as anything 'significant'..and the same goes for VIX 14/15s.

more later..on the indexes

Closing Brief

The main indexes closed moderately higher, but the market appears stuck at the key psy' level of sp'1700. If the micro-count outlook is correct, with an ABC bounce, then the sp'1670s look viable either tomorrow, or early next week. VIX is further suggestive of index weakness into the weekend.




Well, an interesting day, and after some weeks of waiting, I'm back on the short side of the indexes.

Broad weekly charts are offering the sp'1600/1550 area by mid-Sept, so I'll be taking a 'default trade is short' for the next 4-6 weeks.

As for tomorrow, there is no sig' QE, and the bears have a pretty good chance of kicking the market lower into the weekend.


the usual bits and pieces across the evening

3pm update - bears ready for next wave

The main indexes are holding moderate gains, but it sure feels weak out there. The market remains stuck around sp'1700, and there is downside pressure on the hourly cycle in the 1700/03 area. VIX looks floored in the mid 12s. Gold holding gains of $26 or so.




Lets see how Mr Market wants to close. If it wants to confuse the max' amount of traders, it'll close 1698/1700 area.

Regardless..i hold short into Friday. Seeking sp'1675. I have to say, I'm feeling pretty confident about how its playing out.

It would be nice to end the week with an exit in the 1670s.

3.08pm..  t-5/10mins until a snap lower is viable.

3.23pm... it looks to be underway

3.28pm...looking bearish for the closing 30mins

So...lets see if the 1670s tomorrow :)

3.44pm.. sp'1699...well, the algo-bots might wanna hit some stops before the close....

Regardless, I hold short overnight.

back at the close :)

2pm update - big fail for the bulls?

The market has rallied into the afternoon, but is seemingly maxed out..a touch under the morning high of sp'1700. A rollover into the close is very viable, primary downside target for Fri/Monday is sp'1675. VIX is similarly looking floored in the mid 12s, upside target is 14.50/15.00.



So, I've made my move..having given the market over a full day to bounce from yesterdays low.

I think its looking pretty good for the bears.

As ever, any move >1709 would be a problem, but then, that's what trading stops are for.

*I am heavy short the indexes from sp'1699, and will most certainly hold overnight. Seeking an exit in the mid 1670s, preferably tomorrow!

2.22pm ...15min cycle suggestive of a snap lower around 3.15/30pm.

Any close <1695 would be useful to tomorrow, and bring the target within just 20pts...a mere 1.25% away.  That is easily viable to end the week.

 2.40pm.. Mr Market sure does consider sp'1700 a key level.

Bulls..had a good run...its time for the bears to kick this lower into the close.

1pm update - standing by

The main indexes have battled back, in what is probably a simple C wave. There is strong resistance in the sp'1700/05 zone this afternoon. Meanwhile, gold bugs are suffering mild hysteria...ahead of what I believe is a very likely precious metals nuke-fest late next week.



Simply...standing by.

Trade..all programmed in...just waiting to hit some buttons...when the mood takes me ;)

*I usually revert to the 5..even 1min a vain attempt to get a better exit/entry.

VIX update from Mr T.

Updates across the afternoon

1.02pm... upper bol on the 1704.. thats the best the bulls can get...and its falling.

Looking good...i'd like 1701/02 within the next 15-30mins

1.11pm.. I am SHORT the indexes, from sp'1699

1.15pm... 5/15min cycles look done...

All thats left is for the hourly cycle to rollover into the close..bears should seek anything <1693

1.29pm... bulls should be concerned market battles it out just under sp'1700.

With the  hourly chart set to max out within the next hour (at least on a momentum basis, I think price already has)...bears should be able to knock this lower into the close.

That will set up the early as tomorrow.

1.40pm... VIX looks floored in the mid 12s.

No confirmed turn..yet...but its gotta be close now.

12pm update - afternoon recovery

The smaller market cycles are playing out very well, with a B' wave flooring at 1688. A C wave looks set to battle higher into the late afternoon, perhaps taking out the earlier 1700 peak. Regardless, significant downside to at least sp'1675 is expected in the next wave lower.




Well, things are looking rather good for those still interested in taking an index/market short trade.

Typically, 2.30pm is often a market ceiling, but...we could just as easily rally into the close - not least with $3bn of benny bux floating around out there today.

Best guess...we max out around 1702/04, no later than 3.30pm.

If so...I'll take that to enter a short-trade.

12.28pm.. looking good...

Another hour...ideally two.

12.45pm... standing by... sp'1701/02..looks to be the target within the next 15-45mins.

All things considered...I think I'll take that.

11am update - small C up

Mr Market is no doubt starting to confuse many, but the price action feels like a B' wave has floored in the traditional 11am time frame. A C' wave across the afternoon, challenging the earlier 1700 high. Precious metals are surprisingly strong, Gold +$22


Summary I wait for a C' wave is again sp'1700/05.

For the day-traders out should be rather good.

11.15am.. looking good, rally into afternoon...

So..the target trade I am seeking is short from sp'1700/05...down to 1675....which might even be viable by the Friday close.

10am update - bouncing as expected

The main indexes are seeing natural follow through from yesterday. The obvious issue is whether sp'1709 will be taken out...I Daily/weekly charts look tired, this is merely a natural bounce from the first wave lower.




Gains fading - already showing the weakness out there, but hourly MACD cycle offering underlying pressure into the late morning.

I'm going to let this play out at least until 11am..there isn't any hurry whilst the bears are still unable to kick the market -1% on any given day.

yours...still waiting (overly patient?)

10.03am..its looking pretty good for a clear top to form in about 2-3 hours.

1705..just about stop out the bears..before renewed weakness.

10.15am...I'm now looking for this...

A' wave done...seeking a B to level out within the next few hours..and then C up..which might not complete until early tomorrow.

Urghh..another day to wait?

10.23am..we've found support on the hourly 10MA @ 1691. we go up again...1705 remains viable.

*note, the hourly upper declining..should put a good cap on this bounce.

10.36am..hmm, falling again..another floor at the 'traditional' 11am time?

I'm sure not chasing this lower...seems overly risky of latter day recovery/ramp.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open @ 1697. A bounce into late morning seems likely, not least with mid-sized QE of $3bn. Precious metals are also higher, Gold +$6. Bears should be able to contain the bounce <1709.



So..we're going to open higher, and have a fair chance of breaking into the 1700/05 target zone in the first 90mins.

Indeed, as I've noted in past few days, look for maybe a ceiling/floor around 11am. That should be enough time for the market to exhaust itself on the bounce.

I will be seeking to pick up an index-short block this morning, but as ever..if the price action is overly strong....I'll give it as much time as the maniacs can keep pushing it higher.

Notable movers: TSLA, GRPN, both on earnings.

9.36am... there is no hurry on this looks set to rally for a few hours at least.

Lets see how high the maniacs want to drive it by 11am.

A mid-term top appears solidified

With the main indexes slipping for a third day, there appears to be a shift in market mood. The micro-wave count is highly suggestive that sp'1709 is a mid-term top. First downside target is the 1660/50 zone, but with a far more interesting target of 1600/1550 by mid September.

sp'weekly7 - bearish outlook

sp'60min3 - hourly broad outlook


So...a third decline for the equity market, and we're starting to see some signs that the market is indeed exhausted. A 149pt ramp across six full trading weeks, and that looks to be...that!

The micro-wave count on the hourly chart (dare I say) looks pretty good, and all that the bears need now is a break of the sub'4 low of 1676.

Importantly, we currently have a blue candle on the weekly 'rainbow' chart, but still.. in most previous cycles, we will get 4-6 blue candles before the market breaks below the weekly 10MA - currently @ 1656.

Indeed, I don't expect much (if any) price action under 1650 until very late August.

The 'best doomer case'

Whilst the main market is building a top, I'm still inclined to dream of more exciting times ahead....

sp'weekly9c - test of the lower trend

The above is one of a number of basic scenarios, but considering the past 18 months - with QE still ongoing, the sp'1400s do not look at all viable in the remainder of this year.

Looking ahead

There is the usual weekly jobs data, but again, there isn't much else. However, there is mid-sized QE of $3bn

*I am expecting a small bounce at least for the first half of early Thursday, but I will then be looking to pick up an index short block. Anything in the sp'1700/05 area looks 'best case', not least if 1709 is indeed the mid-term high.

Goodnight from London

Daily Index Cycle update

The sp'500 closed lower for the third consecutive day, the longest declining streak in eight weeks.  The two market leaders - Trans/R2K, both saw (as usual) more significant declines of around 0.7%. The mid-term trend is becoming clearer, with an apparent top @ sp'1709.





So..the third down day in a row, and the bears are rampant..right?

Well, no. Not yet anyway. The laughable aspect is that the sp' closed a mere 19pts (1.2%) shy of its recent high.

All those touting doom are clearly not keeping things in perspective.

What I will note though, there does seem a rather clear 'market-mood' change in the past few days, and even the cheer leading maniacs on clown finance TV are noting the market seems exhausted after a very strong ramp from the 1560 low.

My best guess, a continued bounce into Thursday, perhaps 1700/05..before the next wave lower. I suppose we could even trade largely sideways into the weekend before the next wave to sp'1660/50...

...regardless, I will very likely be picking up an index short block...having waited a fair few weeks!

a little more later...