Monday, 24 March 2014

Volatility fractionally higher

With equities weak, the VIX battled higher - intraday peak 16.07, but settling +0.6% @ 15.09  Near term outlook is for sp'1845/35..which should equate to VIX 17/18s. For the big 20 threshold to be hit, we'll likely need to see at least the sp'1810/00 zone.




So..a brief break into the 16s, but with a latter day equity bounce (and I do think its just a bounce), the VIX went marginally negative in the closing hour.

The net daily gain is negligible, but there remains underlying threat of an imminent move to the 17/18s - which should equate to sp'1845/35 zone.

What would be really exciting, is if the equity bears manage a daily close <1830. That will open up what is arguably 'easy downside' of a further 30/40pts to 1800/1790s. That should equate to VIX briefly in the low 20s.

*keep in mind that the VIX 2013 high was 21.90s. So..22s would be a key victory for the bears.

more later..on the indexes

Closing Brief

The main indexes all closed lower, sp -9pts @ 1857. The two leaders - Trans/R2K, settled lower by -0.1% and -1.3% respectively. Near term outlook is bearish, with a key support zone of 1845/35. Any daily close <1830, and the market will keep on falling to 1800/1790.



So..opening minor gains, but they barely lasted minutes...only to result in a swift reversal..and with the sp'1850 (FOMC low) taken out, the bears are back in control.

However, with last weeks bullish weekly close, I will not be comfortable until we see a few daily closes <1830.

A weekly close <1830 would be VERY bearish, and be suggestive of a possible target of the lower weekly bollinger.. currently in the 1760s.

..and that would be rather good indeed.

*I hold heavy short overnight, via SDS, and a secondary SPY put block, from 1858 ( today's afternoon bounce)

more later...on the VIX

3pm update - weakness into the close

US indexes remain weak, and after what was a typical afternoon bounce into 2.30pm, we're set for further weakness into the close. Bears should be content with any daily close <1860, 1840s would be a real bonus, and greatly help the chances of breaking the more important 1830 threshold.



*I picked up a secondary short block, from sp'1858, will seek to exit in the low 1840s tomorrow.

First resistance for the bull maniacs is the hourly 10MA, which will be around 1860/58 in this hour.

An interesting closing hour is ahead!. Lets see if the bears can get a daily close in the 1840s, along with VIX 16s.

3.03pm..bears just need to break < cause some havoc into the close.

3.13pm.. rolling..rolling...over...could be an exciting closing 5/10mins.

3.30pm... urghh.. a jump back to 1860...and if this is a C' sure must not go much above 1865/70.

At least the bears don't have to worry about any sig QE' until early Wednesday.

VIX turns red...

3.40pm.. bears could do with a daily close at least <1860.

Regardless of the exact close...the near term trend IS weak, and we still look set for the 1840/30s.  back at the close.

2pm update - a bounce to short

Equities are seeing a minor bounce, with some indexes having broken the FOMC low of last Wednesday (equiv' to sp'1850). VIX is holding minor gains in the 15s, but looks set for a burst into the 17/18s Tue/early Wednesday. Metals remain weak, Gold -$21.



*Current price action looks particularly bearish, and with the weekly charts flashing a provisional warning, I'm considering picking up a SPY put chase it lower - on the current bounce.

First downside is the key 1835/30 zone, where there 4 aspects of support.

Typical afternoon turn time is see if we can claw to 1860 or which point I'll probably pick up a Put block. and will hold overnight.

The action in the momo stocks remains amusing, and it is something of a mini crash day for all of the usual suspects, NFLX, -8%, FB -5%, TWTR -5%.

...standing by for 2.20/40pm...typical bounce-conclusion time.

2.07pm.. sp'1858....getting close..2pts or so...with 23mins.

2.15pm..  15mins to go...still 2pts...

2.26pm.. 1856....hmm.. 1860 is just about viable...but it remains a weak market.

2.30pm.. times up...standing by pick up a put block..from 1858/60 zone. I don't expect 1862 or higher.

2.33pm.. SHORT from sp'1858, will hold overnight...seeking 1845/35 zone tomorrow.

so..I'm holding a core SDS block...and now a secondary SPY put block.

1pm update - ongoing weakness

Equities remain very weak, with borderline significant declines for most indexes - lead by the Nasdaq and R2K. VIX looks set for a daily close in the 16/17s. Metals remain weak, Gold -$21.



Little to add.

Market is clearly weak, and the bounces are being sold into.

The only issue now is whether the bears can break <1830 before two sig' QEs this Wed/Thuirsday. It won't be easy.

Momo stocks are getting trashed...

NFLX, daily

more on the momos..later.

1.45pm.. on the bounce..will consider picking up a SPY put block around 2.30pm

The price action is pretty strongly in favour of the bears...and with the VIX only in the 15s, this looks a reasonable level.

12pm update - continued weakness

US indexes continue to slip, with significant weakness in the Nasdaq and R2K. Equities look set to slide to the sp'1845/35 zone..where there are 4 aspects of key support, not least the weekly 10MA. VIX looks set to climb into the 17/18s.



*I remain short, via a core block of SDS, but will consider exiting when sp'1845/40.

Those opening minor sp'1873 now look a long way up.

VIX update from Mr T.

back later

12.45pm.. and farewell to the 1850s.

Fast approaching the initial target zone of 1845/35. Things only get interesting on a daily close <1830.

11am update - break of trend

With not enough willing to chase it higher, the market has failed to hold the sp'1870s, and with a little weakness, we've already seen a clean break of trend. The door is now open to the 1845/35 zone, which will probably equate to VIX 17/18s.




*with no bounce to 11am, I've not picked up a secondary SPY put block, and I sure won't chase this lower. I'm content to sit on SDS, and have raised my stop.

So...there is clear weakness, and a move to the 1840s now looks pretty much straightforward.

The only issue in my view now is whether we lose the 1830s. If that occurs, then downside will extend to 1800/1790.

Notable weakness in the momo stocks, NFLX -6.4%, TWTR, -5.9%

11.15am.. interesting morning...and as usual, kinda ironic how clown finance TV are trying to ignore the declines as though 'everything is just fine'.

VIX breaks into the 16s, but look at those momo stocks! FB, TWTR, NFLX..all getting smashed.

10am update - failing opening gains

The week begins with some minor gains, and we were (briefly) back in the sp'1870s. Yet, the Friday reversal was somewhat important, and a break >1883 looks... difficult. There remains viable downside to 1845/35, a break <1830 similarly looks... difficult. Bulls lack any sig' QE-fuel until Wednesday.



*I am open to picking up a secondary SPY put block this morning, once the smaller 15min cycle maxes out. Typically, 11am would make for a reasonable time.

Notable weakness in the metals.

GLD, daily

Starting to look kinda ugly, esp' on the bigger weekly charts.

10.04am... break of trend on the 15min...and we're headed down.

*I won't chase the market lower...I merely already sit on a core SDS block.

VIX 15.20s...16s is where things get interesting (that'd break the FOMC spike low - equiv' to sp'1850.

10.13am.. raised my SDS stop...just being cautious..since the weekly charts DID close positive last week.

Interesting failed opening one wants to buy the least yet.

10.25am.. Notable weakness, NFLX, -5%...I've no idea why, but the other momo stocks all weak too, FB, fact, is now in the $48s..a key break of support.

Game over for the momo stocks? about to break rising trend.... door is open to 1845/35

10.35am.. clear BREAK of trend...we're going to the 1840s.. VIX +5%, set for the 16s.

Pre-Market Brief

Good morning. Futures are a little higher, sp +3pts, we're set to open at 1869. Metals are weak, Gold -$10, Silver -0.6%. With the Friday reversal from 1883, equity bears just need to break <1860, to open up a test of the 1845/35 zone, with VIX in the 17/18s.



*awaiting PMI manu' data at 9.45am

So, we're set to open a little higher, but we do have a short term double top of sp'1883. Bears just need to break <1860, to open up a trend/floor test in the 1845/35 zone.

If we somehow break <1830 this week, then we'll keep going, at least to the 1790s.

*no sig' QE-pomo until Wed', so the bears have a clear window of opportunity until early Wed' morning.

Video update from Oscar

I would have to agree with Oscar that the primary trend is very much intact, However I find it difficult to envision a straight up move to the 2100s. Perhaps 1925/50, and then 1600s on a 'summer swoon', and then up into year end?

As ever...updates across the week!

9.36am opening minor gains.

I will consider picking up a small SPY put block around 11am....give the bull maniacs a good hour to get exhausted.

VIX is lower, and IS low, which at least makes buying index shorts..cheaper.

Metals weak, Gold -$16.