Tuesday, 30 June 2015

VIX cools a little

With equity indexes settling the month on a moderately positive note, the VIX cooled a little, settling -3.1% @ 18.26 (intra low 17.49), although with a notable new cycle high of 19.80. Near term outlook is uncertain, with threat of 16.00/15.50s.. before a break into the low 20s.




Suffice to add... a bit of a consolidation day for the VIX, with a notable new cycle high.

A break (if briefly) into the low 20s still looks due... not least if the market wants to properly test the 200dma.. which will be around 2054 Wed/Thursday.

more later.. on the indexes

Closing Brief

US equity indexes closed moderately higher, sp +5pts @ 2063 (intra high 2074). The two leaders - Trans/R2K, settled higher by 0.1% and 0.6% respectively. Near term outlook is uncertain, with hourly cycles threatening further upside, against broader downside.



*closing hour was a bit of a mess... but then there was some end month issues.

... and another crazy month comes to an end...

Broadly... all the main US indexes saw net monthly declines.

The issue now is whether we'll see one further wave higher across July/early August.. and then some kind of brief.. but severe washout in Sept/Oct.

*I remain on the sidelines overnight.. seeking an index short... once the hourly VIX cycle is better reset... preferably VIX 16/15.50 zone.

more later... on the VIX

3pm update - weakness into the monthly close

US equity indexes will be extremely prone to renewed weakness in the closing hour.. as the Greeks will fail to pay, making it the first developed nation to ever default with the IMF. USD is holding gains of 0.7% in the DXY 95.40s. Metals remain weak, Gold -$7




Effectively.. target was reached on a secondary bullish wave into the 2pm hour as expected.

What I find a problem is the hourly VIX cycle... which is more suggestive that a market short from the 16/15.50 zone is viable tomorrow... or even Thursday (monthly jobs data).

For now... I'm sitting back. Call it overly cautious, but I just ain't in the mood to get nailed on further upside tomorrow.

updates into the close....

3.11pm... a little weakness to sp'2064....  VIX is holding up though...

I'd still expect some of the rats to sell into the close.. ahead of the Greek default this night.

3.15pm.. sp'2063...  its not looking so pretty...  the real issue is whether 2050 fails tomorrow... then we might actually see some mild panic.

3.29pm.. sp'2062.... the rats are getting twitchy.... ahead of the overnight default.

Naturally.. yours truly is not short.... but at least I'm not long. oh well. 

3.46pm.. sp'2065.... its getting increasingly choppy.

*I remain on the sidelines... yours... Mr Cautious.

... back at the close

2pm update - typical hour for an intra peak

US equities have seen another minor wave higher. There remains moderate opportunity for the sp'2075/80 zone... along with VIX 17s.. by the monthly close. USD is holding gains of +0.7% in the DXY 95.40s. Metals remain weak, Gold -$7, whilst Oil is +1.5%



Okay.. I'm back from a walk (if only to get some sun on my face).. and I see renewed upside.

Typical turn time is 2.30pm.. but based on the earlier wave.. maybe we'll max out a little later around 3pm.

I will be VERY tempted to launch an index short before the close.. not least as price action remains very shaky.

Hot London city

Bullish leafy shade
Time to get some ice.. and a drink
stay tuned!

2.09pm.. sp'2072... okay.. we're getting real close to target zone.

VIX slips back into the 17s

2.14pm.. short-stop cascade in progress.

t-15mins until I'll consider hitting some buttons

2.20pm.. Reviewing the VIX hourly chart... its a problem for those wanting to short this afternoon. I'd sure feel a lot better going short with VIX 16/15s.


2.30pm... Well, its typical turn time... we're seeing a reaction from a fractional new high of sp'2074.

As things are... I am not liking the bigger hourly equity/VIX cycles which threaten another stupid move higher tomorrow morning.

For the moment, I am merely watching.

2.36pm.. I am trying to keep in mind we have the monthly jobs data on Thursday... that will be a wild card that could go against the bears.


End month closings will be important...

1pm update - bulls running out of time

US equities have already turned fractionally negative, as more traders are starting to realise there will be no Greek deal, nor a payment to the IMF today. VIX has confirmed the equity weakness, with a new cycle high of 19.79. USD is building gains, +0.7% in the DXY 95.40s.




Suffice to say... I am not chasing things lower from these levels. I want at least the sp'2075/80 zone. Of course, that might simply not occur.. if so.. I'll miss out. I can live with that.

There is arguably a double floor of sp'2056.. but broadly... price action sure doesn't look great right now.

So... lets see if this crazy market can yet ramp into 2/3pm...    

back at 2pm

12pm update - building a bear flag

US equity indexes continue to appear to be building another bear flag.. before renewed downside across Wed/Thursday. An afternoon peak in the sp'2075/80 zone - with VIX 17/16s, looks on track. The real issue is whether the 2050s will fail to hold in the next wave.. if so... there is empty air to the giant 2K threshold.




*I remain on the sidelines... trying to be patient (not my finest skill)... will consider an index short in the 2pm hour,

Little to add.

Market probably wants a few more hours in the current up cycle.

I will be seeking at least some degree of closing hour weakness... ahead of the IMF payment deadline.. which will be missed.

From EU-CNBC...indexes, first half net changes..

UK notably lagged France and Germany in first half

time for another icy drink...

12.29pm.. Well, the morning low is about to be taken out... indexes turning red.

Hmm... as things are.. I'm certainly not chasing it lower from these levels. 

12.38pm.. VIX 19.72...  seems like forever since we've seen the 20s.

If by some miracle we still see another afternoon ramp on more 'last minute' Greek hope... overall price action is clearly still very weak.

11am update - battle continues

US equities are battling to hold minor gains. Further upside looks due into the afternoon, with a more realistic upside target zone of sp'2075/80. The Monday low of 2056 looks set to be broken before the Thursday/weekly close.. as traders will face extreme uncertainty with the Greek referendum this Sunday.




Yes, I've lowered the upside target a little for this afternoon... after the market got stuck at 2073.

notable weakness: metals, Gold -$8, which will make for a net monthly decline of around $20.

*I am on the sidelines... and will strongly consider a market short this afternoon.. if price structure looks bearish enough.

time for an early lunch

11.19am... sp +9pts @ 2067.... upside into 2pm..... 2075/80... on track.

VIX is cooling. -1.3% in the 18.60s.  17s look due...

10am update - opening gains

US equities open moderately higher into the sp'2070s, with the VIX naturally cooling into the 17s. USD is holding minor gains of 0.3% in the DXY 95.00s. Metals are increasingly weak into month end.. Gold -$9. Oil is building sig' gains of 1.2%.




Best guess... a net daily gain.. with price structure being a bear flag by late afternoon.. somewhere in the sp'2080s. Closing hour should see renewed weakness... ahead of the official Greek default/failure to pay the IMF.

A daily close >2085 would seem highly unlikely before a test of the 200dma.. currently @ 2053.

Best case for the bears... further downside into early next week, with a washout to around the 2K threshold... along with VIX spiking into the 23/25 zone.

*I am on the sidelines, will consider a market short.. later this afternoon... if price structure is bearish.

10.01am consumer confidence: 101.4  vs 95.4 prior.   a powerfully bullish number... something for the bull maniacs to tout.

10.25am.. minor chop...  still... another wave higher into the afternoon looks very probable.

Notable strength in the VIX.. as its back to almost evens. 

10.38am... remaining choppy... Mr Market will surely want to kick out more bears later today.. before the downward trend resumes.

notable weakness: BTU -13%.... coal miners are seeing some increasingly wild action lately. 

Pre-Market Brief

Good morning. Futures are moderately higher, sp +11pts, we're set to open at 2068. Greek finance minister Varoufakis has confirmed the payment to the IMF will not be made today. USD is bouncing, +0.5% in the DXY 95.20s. Metals are weak, Gold -$6. Oil is +0.8% in the $58s.




*I highlight the monthly chart.. since it is of course the last day of June. ALL equity indexes are set for net monthly declines... and we're seemingly in the early phase of a summer/early autumn correction.

If we keep falling to sp'2K in the days ahead, it will make the notion of new highs into early August.. rather unlikely.

More on the monthly closes... after the close of today.

My plan for today?

Well, I'm increasingly thinking we'll see a full washout to the giant 2K threshold. If price structure across today is a baby bear flag... I'll strongly consider launching an index short and/or VIX long.

There is probably no hurry on such a trade... prime time would be around 2.30pm.

Update from an increasingly bearish Oscar

Overnight action in China... another wacky night... with the Shanghai comp' swinging from -5% to settle +5.5% @ 4277. Pure crazy. There is a fair bit of chatter on whether the Chinese central bank were bidding up stocks... impossible to know of course... but what is clear... the volatility remains extreme.

I still think the 3400s are the most valid... and natural target this summer.

Good wishes for Tuesday trading.

8.10am.. Equities picking up again.... sp +17pts... 2074...

8.44am... Here is something...


Seeking a bear flag to develop today.. maxing out in the 2080/85 zone or so. In theory.. any short form 2080s should offer around 30pts of downside to test the 200dma of 2053.

8.56am.. ohoh, the Cramer is sounding bearish on clown finance TV.  All thats missing is for Gartman to announce he is going heavy short.. .and we'll have ourselves a short term floor. lol

9.42am.. ..Awaiting Chicago PMI... 

9.45am.. PMI: 49.4     vs the prev' recessionary number 46.2

Broadly. thats a lousy number... STILL suggestive of Q2 marginal recession.

USD cools as central banks intervene

Sunday night saw the USD break into the DXY 96s, but with widely acknowledged intervention from a number of central banks, the Euro was bought... cooling the USD (intra high 96.69), settling -0.6% @ DXY 95.04. The secondary bearish target zone of 92/90 remains on track.

USD, weekly

USD, monthly3


Suffice to say... even the cheerleaders on clown finance TV were able to acknowledge the overt intervention by various central banks across Sunday night and throughout Monday, in an attempt to stabilise currency markets.. and indirectly negate some of the equity weakness.

Clearly, the intervention worked to some extent.. but its not the sort of thing that can be done every day, right? Well, regardless... the fact the USD actually closed net lower will have surprised many.

It is taking long than I had expected, but the 92/90 zone is still viable.. before the hyper-ramp into the DXY 120s.

Bonus chart...

China, daily

A net Monday decline of -3.3% @ 4053... with an intra low of 3875. The 3400s are well within range in the near term.

Looking ahead

Tuesday will see Case-Shiller HPI, Chicago PMI, and consumer conf;'.

*Fed official Bullard will be speaking.. and Mr Market will no doubt be listening.

Goodnight from London

Daily Index Cycle update

US equities closed significantly lower, sp -43pts @ 2057. The two leaders - Trans/R2K, settled lower by -2.0% and -2.6% respectively. Near term outlook remains bearish, with next support in the 2060/50 zone, where there are multiple aspects of support. Any failure of 2050... opens a fast move to the giant 2K threshold.




*notable weakness in the 'old leader' - Transports... seemingly set to floor at either the psy' level of 8K... or a more severe 7700 - the Oct' low. It could be argued.. if 7700 is hit in the current wave.. there is a viable bearish H/S formation into the early autumn.

A pretty rough day for the US equity market.. opening lower, a minor morning bounce, but then further downside across the afternoon.

There are numerous aspects of support in the sp'2060/50 zone... and considering a number of uncertain Greek hurdles yet to break through, we might even see a brief washout to the giant 2K level... along with VIX in the low 20s.

a little more later..