Thursday, 31 October 2013

Volatility fractionally higher

With the main indexes seeing some latter day weakness, the VIX managed a micro-rally into the monthly close, settling +0.7% @13.75. Across the month, the VIX declined 17%. The VIX looks set to remain in the teens for the remainder of the year.





*I don't think I've posted a monthly VIX chart in a very long while, but I think its worth keeping things in perspective. Market volatility has collapsed, and just like in could be another few years before the market really freaks out again.

Suffice to say, the VIX remains low, and even if we slip down to the sp'1730s in the coming day or two, I don't expect the VIX much above 15/16.

more later..on the indexes

Closing Brief

The main indexes closed the month with moderate declines, the sp -6pts @ 1756. The two leaders - Trans/R2K, both closed -0.5%. There looks to be downside to the 1730s, before a further wave into the 1800s in November.



..and October comes to a close.

For many out there, it will be another month to forget and complain about.

I'm bearish to the sp'1730s, but...considering the bigger cycles, further multi-month upside looks a given into next year.

The usual bits and pieces across the evening.

3pm update - October coming to a close

The main indexes are holding moderate gains, but under the recent sp'1775 high. It has been a remarkably bullish month, with most indexes around 5% higher. Metals are closing the month weak, with Gold -0.4% for October. Oil saw heavy declines, -6% on the month.

sp'monthly'3, rainbow


Another month for the equity bears to forget.

All the talk of debt ceilings being breached, of a near end of the world zombie apocalypse, were indeed just the usual bearish hysteria/nonsense talk.

Chart, monthly'3, shows a disturbing lack of red candles since Sept'2011.

Another 5% for the bulls...and the world equity index charts are STRONGLY suggestive of a further 10/15% into spring 2014.

I realise, and do understand that some of you think the sp'2000s are not likely before the next major drop..but really..the current trend IS unquestionably to the upside.

There will be a time to launch heavy shorts, but...that is probably another 4-6 months away, and even then, it will be somewhat risky.

FB, on the 5min chart, a few good examples in there of how a momo stock trades intraday, not least the opening spike-floor reversal candle.

You can see FB is essentially close to flooring on the micro 5min cycle, and will likely battle higher into the close.

Anyway...updates into the close....

3.16pm..we have some distinct weakness this hour..and everything is now bearish into Friday..and to close the week.


The 1730s are viable tomorrow..if the rats get twitchy into late Friday afternoon.

Not surprisingly..the new QE-pomo schedule is out..with $45bn for November.

See NY FED for details.

On first look, next week is heavy QE, with 3 days of sig' QE. Bears....beware!

3.35pm.. sp'1740s look viable tomorrow...but as ever...bears need to be mindful not to get lost in the hysteria if we do get a Dow -175/225pt day.

3.50pm...rats bailing into the close. Looks prettyt good for the bears for tomorrow, but did early October.

2pm update - holding under 1775

The main market is comfortably holding under the sp'1775 high, and the 15/60min cycles will likely see a renewed push lower to the low 1730s early next week. Metals are closing the month on a bearish note, Gold -$19. VIX is -1.6% in the 13.40s.



Not much to add, although there remains a lot of interesting action in individual stocks.

*QE-pomo schedule for Nov' is issued at 3pm.

FB continues to recover from the opening drop.

That is one hell of a bullish engulfing candle. Upside into the 60s looks..pretty easy by early December.

2.27pm.. sp'1767..well, its a fair bounce..but it'll surely suggested by the bigger daily charts. 

Reasonable downside...of around 30/ the low 1730s..within a few days.

1pm update - quiet end to the month

The market is seeing a natural minor bounce, with the sp'1775 Wednesday morning high unlikely to be broken for some days, even a few weeks. VIX is still telling the story that the market remains absolutely fearless. Gold slowly -$21




Just 3 hours left of the trading month, and a close in the sp'1760/50 zone looks likely, which will make for a very strong month.

Near term downside..remains the 1730s, within the next 2-3 days.

VIX update from Mr T.

Interesting action in the momo stocks, which are seeing some interest.

FB looks pretty secure...

$60s remain the upside target by year end, not that I will be meddling in any of the 'hysteria' stocks.

1.34pm.. FB accelerating...all the bears getting nuked...can it get to 54/55 by the close, ..crazy market!

12pm update - minor bounce

The market is seeing a minor bounce after the initial drop from 1775 to 1755. The high should hold, with renewed weakness in the first week of November. Best guess remains, sub'1700s are still off the agenda for remainder of this year. The VIX strongly supports that view.




*VIX confirming a market that is supremely confident. Even VIX 15/16 will be difficult, with sp'1730s.

12.39pm, Minor bounce continues, but 1775 should comfortably hold.

time for lunch !

11am update - bears battling lower

The main indexes are holding moderate declines, after a PMI number that showed the strongest jump in over 30 yrs. Metals remain very weak, with Gold -$18. Equity bears look set to kick the market lower across the next few days, but anything <sp'1730 will be real difficult.



Hourly charts are showing a slow...but consistent decline.

However, considering it is end of the month, there is likely to be some end month chop across the afternoon.

So..right guess..1730s..then low/mid 1800s in November.

11,01am.. remains ironic, red indexes...and red the 13.50s ! Fearless market.

The FB looks floored around the lower bol' /50 day MA...

Upside to the 60s into year end.

11.25am.. indexes seeing a minor up wave, but 1775 looks a secure high now.

momo stocks all jumping, FB, NFLX, all the usual suspects.

10am update - no one believes the number

The sp'1775 top looks pretty secure, at least for some 'days'. Primary downside remains the low 1730s, but that probably won't be hit until early next week. Precious metals are weak, Gold -$18, Oil is flat. Regardless of how we close today, the monthly charts all look set to close the month strongly.




*Chicago PMI;65.9 , vs 55.0 expected.  A truly BIZARRE number, in fact, I've never seen such a jump..EVER. I gotta think its a typo in the press release. No way did it climb that high in a month.

So. market opens a little weak, but bears look set to struggle, even to drop just a few percent, and we're already seeing the indexes flip a touch green.

Despite the PMI number, I don't think indexes can break >1775 in the immediate term.

FB offering a reversal candle...I think it'll be floored soon.

TSLA..looks real ugly..and likely headed for 110/100, maybe within a week.

stay tuned

Pre-Market Brief

Good morning. Futures are flat, we're set to open at sp'1763.Metals are especially weak, with Gold -$15. Oil is a touch a lower. Equity bears look set for continued market weakness, near term downside looks to be the low 1730s by early next week.



Sp'1775 certainly looks to be a near term high, but with continuing QE, I can't consider it a key multi-week/month cyclical top.

Given just 2-4 more days, we'll surely level out, whether the 1740s, 30s..or even a little lower. It really doesn't matter. I think its a bold call, but I don't see sub 1700s viable in the remainder of this year.

Crisis without end

Interesting story from Bloomberg. It would seem the 'crisis cash' mountain between all the central banks will be kept intact. I guess this is a good thing for the stability of the financial system, but still, it doesn't exactly inspire me with confidence that even the printing maniacs still seem twitchy about things.

Mr Permabull...short term bearish.

Have a good day everyone!

9.12am.. notable mover is of course.. FB, -4% in the low $47s..which is now a full $10 below the highs of yesterday AH.

It would seem everyone is agreed FB is headed to 46/44 zone, before it finds support. It could certainly hit that zone today, and then reverse.

*equity bears will no doubt be disappointed with the indexes - after overnight weakness, but still, I don't think 1775 will be broken now, for some days, maybe even a week or two.

9.47am.. Chicago PMI: 65.. .Huh?   vs. 55 expected.    Santellli notes on clown finance TV, that number looks....bizarre. Someone type the press release wrong?

The QE continues

Not surprisingly, the FOMC decided to continue QE at $85bn a month, along with ZIRP. There is a likely minor retracement now underway, but it would seem the US - and indeed, world equity indexes will continue broadly higher into spring 2014.

sp'monthly'8 - QE periods.


Another FOMC, where the remaining equity bears were again disappointed (if not disgusted) that the QE fuel of $85bn per month - along with ZIRP, will continue.

*The next FOMC is Wed' Dec'18, and as many recognise, it is extremely unlikely the Fed will change policy during the festive holiday.

So...QE at $85bn into I had feared all along.

Worse, equity bears will be lucky to see even a minor QE taper next year - of around $70bn, by late spring/early summer.

Right now, there looks to be significant QE of $50bn per month..across ALL of 2014..and probably the first half of 2015.

Tesla - in trouble

I'd not normally highlight an individual stock here after hours, but I think this one is worth it.

First, see a great video..which features none other than Mr Bollinger himself! 

My own chart...

TSLA, daily

With the break <$160, I'm guessing TSLA will slip to the 110/100$ zone. That will probably take a few weeks, but earnings are next Monday, and if it disappoints, I'd not be surprised to see a monster 15/20% overnight drop.

Looking ahead

Thursday has two key pieces of econ-data. The usual weekly jobs data, but more importantly, the latest Chicago PMI, market is seeking a non-recessionary reading of 55.0.

*there is no QE tomorrow. The new QE-pomo schedule for November is released at 3pm.

Special note for 'blogger' Webmasters.

It would seem Google has launched a new offensive on the spam-bot URL referrers. So...all the daily web traffic numbers are at least 'moderately' lower for everyone out there! Its a good thing though, the bots do nothing but slow down page loading times.

Happy Halloween :)

Thursday is the end of the month, and indeed...for the old school chartists, it will be very important to see how the monthly cycles close for everything, especially for the equity indexes.

Without question, its been a very bullish month for both US and world equities. I see little reason to see why the current wave won't last for another 4-6 months. I should clarify that such a thought/outlook sure does sicken my stomach, but hell, at least I'm not going to waste my time, effort, and money trying to short it.

Goodnight from London

Market update from Walker

For the macro-economists out there...

A 2 part video update from Gordon T Long..



Daily Index Cycle update

The main indexes closed moderately lower, with the sp -8pts @ 1763, having earlier peaked at 1775. The two leaders - Trans/R2K, closed lower by -0.6% and -1.5% respectively. Equity bears have a reasonable opportunity to knock the market a few percent lower in the coming days.





Another FOMC out of the way, and the indexes are looking like they are rolling over.

Indeed, the two leaders are leading the way, and further declines of 2-3% in the near term look viable.

However, with continuing QE, I just can't see a sustained multi-week down cycle, and I'd have to guess the sp'1730s - where there is an obvious gap to fill, will hold, before renewed upside across Nov/December.

a little more later...