Wednesday 28 October 2015

Closing Brief

US equity indexes closed significantly higher, sp +24pts @ 2090. The two leaders - Trans/R2K, settled higher by 0.1% and 2.9% respectively. Near term outlook is now bearish, with first downside target of the sp'2K threshold, and that should equate to VIX in the 18/20 zone.


sp'60min


Summary

*closing hour: renewed upside.. but the marginal new highs were not particularly reflected in the closing VIX.
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Despite the closing hour new high, there are clear reversals in other parts of the capital markets... such as the precious metals.


Having ramped from sp'1871 to 2090 (219pts) across 5 weeks, a retrace of 4-5% seems entirely natural.

Right now.. I'd only give a probability of 10% or so that we'll see a more powerful retrace to the gap zone of 1950. Frankly.. it seems just too difficult.. relative to recent price action.
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more later... on the VIX