Monday, 12 August 2013

Volatility still melting

With the main indexes battling back from opening moderate declines, the VIX failed to hold the fractional opening gain, and melted lower across the day, settling -4.5% @ 12.81. Near term outlook is for continued 'melting', although VIX 11s look difficult to hit.




Well, as I expected/feared, the equity bears are still lacking in any 'downside power', and the market is just very resilient. As a result, its no surprise to see the VIX slipping lower again.

Best guess...a choppy VIX across this week, 12/13s, but the 11s look unlikely...baring a move to new index highs >sp'1709 - which I do not expect.

VIX in the high teens (never mind in the low 20s) look effectively impossible until early September at the earliest.

more later..on the indexes

Closing Brief

The main indexes opened moderately lower, but those declines sure didn't last long, with the R2K doing a mini-moon shot within minutes. The main indexes closed moderately higher, once again lead by the Trans/R2K. Near term trend looks..choppy.



For those bears short across the weekend, the market did indeed offer 'mere minutes' to bail, ahead of what turned out to be a pretty dull day of minor chop.

Despite the lack of QE, the underlying market strength was apparent, with the indexes trying to battle higher into the close.

I would be somewhat surprised if we break 1700 this week, and even more so..1709, which I'm still guessing is a key mid-term high.

*I remain content on the sidelines, and will probably sit back until Thurs/Friday.

bits and pieces across the evening

3pm update - sleepy Monday

The main indexes continue to see very subdued trading, on what might be the lowest vol' of the year. VIX is merely melting lower, now -2.4% in the 13.10s. Metals are holding their opening significant gains, with Silver up an impressive 4%



There is no reason to be involved in this market this week. Maybe we'll open lower Tue..or Wed' into the 1680/75 zone..but I don't expect that to break.

Bears remain this mornings open once again showed.

*I remain content on the sidelines after a useful little gain from an index-short, that I closed at the open.

2pm update - the minor chop continues

The main indexes are somewhat mixed, with the sp/dow a touch lower, but the R2K and Nasdaq moderately higher. Hourly index charts are suggesting slight upward pressure into Tuesday, but the wall at sp'1700 is pretty much clear to everyone.



Were I only looking at the R2K, I'd think this afternoon might be a valid short - MACD cycle is pretty much maxed out.

Yet, most of the other indexes are offering upside.

Way too risky for a re-short..and the only decent long position this week is arguably in the 1680/75 zone.

Notable movers: AAPL, the metals..and miners.

GLD, daily

*I'm still bearish on the metals/miners into 2014, but the near term possibility of another collapse wave is now clearly off.

Gold remains stuck under the old floor though, Silver is sitting just on it. No decisive upward break...yet.

1pm update - a quiet week ahead

It would seem the market will remain stuck between sp'1700 and 1680/75 for the entirety of this week. The bulls are going to consistently struggle breaking >1700, whilst the bears remain powerless in what are the doldrums of August.

sp'60min'4 - H/S idea


I still like the H/S idea. There remains potential for a little wave lower either tomorrow or Wednesday, but I sure don't intend to try to trade it.

We have two big QE at the end of this week, along with opex, which tends to favour the bulls.

Even those hoping for a hit of the rising 50 day MA in the 1650s surely realise that is now seemingly off the agenda for this week.

VIX update from Mr T.

It would seem a fair few are looking for increased volatility in Sept, although even VIX 20 remains a difficult target.

12pm update - volatility melting away

With the indexes recovering from the early moderate declines, the VIX is back in slow-melt the downside. The only issue now is whether the bulls can break sp'1700 again, and then even more importantly..the 1709 high.




There just doesn't seem any clear direction today, and I don't expect one until next week.

VIX is merely melting lower, whilst the indexes are in chop mode.

*weekly charts are still bearish into Sept (baring a break >1709)..more on that later.

time for lunch

11am update - minor chop

The main indexes have already rallied back from the opening moderate declines. Yet, neither do the bulls look likely to break the sp'1700s today..if at all this week. The bears look weak, and entirely unable to break into the 1670s.



Indeed, I am seeking 3-5 days of flat..nothing in market land.

Market looks set to remain stuck between 1680/1700.

*I am content to watch this nonsense play out until Thur/Friday.

No point getting involved - especially on the options market, where the volatility is not enough to make a trade worth while.

10am update - bears remain very weak

The indexes open moderately lower, but we're already seeing some strength, with the R2K and Nasdaq turning positive. With the VIX opening with a classic black candle, and having now turned red, the bears should probably write this week off.




Once again we're seeing another fine example of just how weak the bears are, and what the underlying market price pressure is.

I realise for many bears out there, this week is already getting annoying.

*I am back on the sidelines, having dropped my index short at the open - at sp'1684.

I do not intend to get back involved in the market for some days, perhaps late Thursday/early Friday, if we're again stuck at the 1700 level.

I do not expect anything <1670 this week, but week...1650/40s...very viable.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -10pts, we're set to open at 1681. Precious metals are higher, with Gold +$16. Bears will likely struggle to break the 1675 area, and a return to 1700 looks very viable later this week, into opex.



So, we're set to open I was expecting, but again, we're not even talking about a 1% drop.

Bears are still weak, and are likely to going to find this week 'tiresome'.

*I will look to exit my current index-short position at the open.

Frankly, I just don't see much downside beyond the mid 1670s, and as an options trader, I'm concerned about decay, due to lack of volatility.

Bears should be VERY mindful of the VIX at the open.

Look for black candle on any of the cycle charts, if we get a closing black candle on the hourly by 10am..then the bears are very likely done for the week.

9.32am. short-stopped out of index-short, at sp'1684.

BLACK candle on the hourly VIX far...and that bodes badly for those bears holding short into the afternoon.

I suppose we could keep falling, but downside looks limited, .I'm glad to be out.

9.42am.. R2K does a moon shot, now green.. with red VIX.

Well, as I thought, 'bears..powerless'. Can't even manage a 1% fall.