Wednesday 5 August 2015

VIX reversal candle

With equities breaking above resistance of sp'2108 in the morning, the VIX was crushed, seeing a momentary spike low of 10.88 - the lowest level since July 2014, settling -3.8% @ 12.51. Near term outlook is uncertain, and will depend on whether the bears can attain a daily close under the 200dma in the low sp'2070s.


VIX'60min



VIX'daily3



Summary

*the daily candle is a classic hollow red reversal candle. The added hyper-spike adds to the notion that this was an exhaustion move.
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The morning spike to 10.88 was another one of those periodic bizarro VIX prints. The daily close in the mid 12s was a minor consolation to those currently long volatility.

*I remain long-VIX, am trying to be patient, seeking an exit in the 15/16 zone.

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more later... on the indexes

Closing Brief

US equities closed moderately mixed, sp +6pts @ 2099 (intra high 2112). The two leaders - Trans/R2K, settled higher by 0.1% and 0.2% respectively. Near term outlook is uncertain after today's break above resistance. Until there is a daily close under the 200dma in the low 2070s, equity bears can't be overly confident.


sp'60min


Summary

*closing hour, a little mild chop.
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... and another day in the twisted casino comes to a close.

Clearly.. the morning gains were a major problem to the bearish case. The intraday cooling was useful, but still, the daily close a touch under the sp'2100 threshold was only a minor consolation to the bears.


Closing under sp'2100..... lucky.
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awaiting earnings from TSLA...

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more later.. on the VIX

3pm update - stop the boat

It has been a real battle in the US market, with an intraday decline from sp'2112 to 2097. From a pure technical perspective, bears should be desperate for a daily close under the 2100 threshold. VIX is set for a net daily decline, but even the mid 12s would be well above the morning spike low of 10.88.


sp'60min



VIX'60min



Summary

A rough day... but more so.. for those in Disneyland.

Very difficult to call today's close. The smaller hourly cycles have potential for the equity bears, but there is no definitive MACD bearish cross yet... and that does not look possible in the closing hour.

*awaiting earnings from TSLA at the close. Another loss is expected, but hey.. that must be good for a 10% AH jump? After all, when do momo/hysteria related stocks need profits, its 2015 after all.

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Wonka sums up today...


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back at the close

2pm update - battling it out

Today is increasingly important, as the bull maniacs are now fighting for a daily close above the sp'2100 threshold, whilst bears are within range of another net daily decline. The Dow is already lower for the fifth consecutive day... pressured by DIS, -9% in the $110s.


sp'daily5



VIX'daily3


Summary

There is a lot going on.. but I'm battling to stay awake. Some days are easy... today is damn tough.
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notable weakness, CHK -11%... set to lose the $7s... headed for 5s.
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back at 3pm

1pm update - provisional FAIL

US equities have continued to cool, with the sp' already losing the 2100 threshold. The smaller hourly cycles are offering increasing weakness into the daily close. A net daily decline would be one hell of a turnaround for the equity bears... as the VIX is looking set for the 13s.


sp'daily5



VIX'daily3


Summary

*hollow red reversal candle on the VIX, with a rather extreme spike-floor @ 10.88. A daily close in the 13s would be a massive signal
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... I have to say.. I am rather burnt out after this morning. I have limits... and I'm way beyond my tolerance level today for this twisted casino.

notable weakness... a list that could go on for pages...

DIS -9%
DISCA -9%
CHK -9%
TWTR -2%
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*with the USD +0.2% in the DXY 98.10s.. metals/Oil remain under pressure.
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back at 2pm

12pm update - a little cooling

US equities have cooled a little from the earlier high of sp'2112, but still.. equity bears should be seriously concerned until the market sees a complete fail.. back under the sp'2100 threshold - along with VIX 13s. For now... despite huge issues in giants like AAPL and DIS, the market just doesn't care.


sp'daily5


Summary

Little to add.
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notable weakness... Discovery.. having disappointed on earnings.


Yet another stock with a clear break of trend... as seen even better on the monthly cycle. Target is 25/22.

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VIX update from Mr T.



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time for tea.. or a bucket of sedatives.
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12.22pm... sp'2102... and that is starting to become a notable FAIL-spike



Hmm.. still, I can't be even remotely calm until we're under 2100... pref' with a net daily decline.. to solidify the third rally failure.

11am update - holding above resistance

The sp'500 is holding above resistance (2108), with an intra high of 2112. Unless the market cools back under the sp'2100 threshold - with VIX back in the 13s, bears should be waving the white flag. USD has turned back positive, +0.1% in the DXY 98.00s, and that is pressuring the metals/Oil.


sp'daily5



VIX'daily3


Summary

*Despite a net draw of -4.4 million barrels, Oil has already briefly turned fractionally negative.
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So... a lousy morning for those in bear land.. not least yours truly, but as ever... lets see if the bulls fail to hold opening gains for the third consecutive day.

Considering the break of resistance.. >2110... its not looking good for those currently short into the Friday jobs data.
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As for the VIX, today's early print of 10.88, is the lowest level since July 2014.
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notable opening reversal: AAPL, +1.9% in the $116s.. after seeing $112.10

DIS -7.5% in the $112s.

DISCA -5% in the $30s.. as earnings disappoint.
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Maybe I should throw all my $$$$ into NFLX. With a PE of around 500, that has to be good value, yes?

10am update - opening gains

US equities open moderately higher, back above the key sp'2100 threshold.. with the VIX crushed back to the 11s. Any sustained action above sp'2110 will be decisive enough to merit the 'white flag' from most bears. Current index action is in stark contrast to huge technical breaks in AAPL and DIS.


sp'daily5


Summary

Frankly, a somewhat traumatic open for yours truly. No... its not because I'm now seriously underwater via INTC and VIX, but because I'm not short AAPL or DIS, both of which were rather obvious shorts.

For now... I'm hanging in there, but I'm getting seriously pissed... not least at some of the dumb idiots out there who are either calling for a crash to sp'400... or touting that everything is fine in the 'new normal economy'.
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AAPL, monthly


The monthly cycle is offering $90.. rather than the big $100 threshold. I realise few will consider that though.

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DIS, monthly


Bearish engulfing candle.. .target is $100.... daily cycle is offering a gap zone of 98/93.
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time to cook... or start throwing plates... or something.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +8pts, we're set to open at 2101. USD continues to climb, +0.1% in the DXY 98.00s. Commodities are mixed, Gold -$1, whilst Oil is +0.5%.


sp'daily5



Summary

*awaiting ADP jobs data (8.15am EST).
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So.. we're set to open a little higher... but I would be surprised if the gains are sustained across the day.

Until the bull maniacs can get a daily close >sp'2110.. the bears should not be overly concerned.. not least as the VIX has already been crushed to the 11s. Its not like it can go much lower, right?

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early movers...

DIS -7% in the $113s...  EPS beat.. a minor rev' miss, but the market was upset with guidance. I have high confidence in DIS for the long term, but clearly... the stock is now broken, and looks headed for the big $100 threshold by early October.

AAPL -1% in the $113s... seemingly headed for the 105/100 zone.

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Update from Oscar


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Doomer chat, Hunter with Turk



I think Turk is largely one of the lunatics, but as ever.. make of that.. what you will.
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Overnight China action: The Shanghai comp' was weak for much of the day, settling -1.6% @ 3694.. a mere 10% from breaking the recent low of 3373. No doubt, there is high risk that the PBOC will cut int' rates this Sunday.
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Have a good Wednesday
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8.16am.. ADP jobs.. 185k...   a fair way below market exp' of 210/215.

Equities holding gains... sp +9pts.. 2102.

USD turns negative, -0.2%....   Gold +$2.

.. next due.. PMI/ISM service sector data...


8.36am.. sp +13pts... 2106...  we're getting awfully close to the border here. Any sustained action >2110.. and that is a problem for those short.

As it is, did everyone already forget about the key AAPL break... or the Trans, TWTR/FB.... IBM.... DIS.... its a long... long list.
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8.47am.. early movers...

PCLN, +8%... superb earnings.. and the company is very positive for rest of the year.
Z +6%... post earnings reaction

DIS continues to slide, -8% in the $111s.    I wonder what Deadpool would have to say about that.
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9.04am.. Cramer is on Iger's case...



Bullish mouse lamps.
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DIS intra low so far.. $110.63...  yesterday I saw a buyer top tick the stock @ $122.48 a few minutes before earnings.
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9.11am... Indexes cooling a little, sp +11pts.. .2104.       As often the case... lets see if we max out around 11am.. and then cool for rest of the day.

Considering the opening gains... any net daily decline would make for a THIRD failed attempt by the bulls to rally. 
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9.42am   The break levels are pretty clear.... 2108....   2110 to be decisive.. any sustained action over there.. and its white flag time.

VIX is naturally crushed... back in the 11s.

... all this despite huge technical breaks in AAPL and DIS.

Market is increasingly vulnerable

With the Dow closing lower for the fourth consecutive day (ohhh the humanity!), US equities are looking increasingly vulnerable. Right now, it would seem extremely unlikely that the bull maniacs can break above the May'19th historic peak of 18351.


Dow'weekly1b



Dow'monthly'2


Summary

*seen on the simplistic monthly 'rainbow' chart.. we have the Dow with the sixth consecutive blue candle. This August candle could easily turn red with a move to the key level of 17000, and give high clarity of increasing weakness into late Sept/early October.
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Looking ahead

Wed' will see ADP jobs, intl' trade, PMI/ISM service sector, and the EIA oil report.
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Trying to be patient

Yours truly remains positioned on the short side. I am trying to be patient, but as ever, would prefer an exit into the coming weekly close. Right now, more than anything, I want to see VIX in the 16/17s. That certainly seems possible if we get a daily close under sp'2070.

With good companies like AAPL and this evening - DIS, getting whacked lower on what were both very reasonable earnings, I've seen more than enough technical breaks in the past few weeks to convince me this market is headed lower into the early autumn.

For me, it is a case of being broadly short the market, take regular profits, and short all bounces.

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed, sp -4pts @ 2093 (intra low 2088). The two leaders - Trans/R2K, settled +0.1% and -0.2% respectively. Near term outlook is for a daily close under the 200dma (2070), which will offer clarity that the US market has already maxed out for the summer.. and year.


sp'daily5



Dow


Summary

Suffice to add, another day where the bull maniacs tried to break and hold above the sp'2100 threshold... but failed.

Market looks due a significant net daily decline this week... with a daily close under the 200dma, and that is when things get interesting.

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a little more later..