Wednesday 21 October 2015

VIX climbs into the close

With equities closing moderately weak, the VIX battled upward into the close, settling +4.6% @ 16.47. There will be increasing resistance in the 17/18s... sustained action above the key 20 threshold looks unlikely in the near term.


VIX'60min



VIX'daily3



Summary

Nothing to add.

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more later... on the indexes

Closing Brief

US equity indexes closed moderately weak, sp -11pts @ 2018 (intra high 2037). The two leaders - Trans/R2K, settled lower by -0.5% and -1.6% respectively. Near term outlook is for further equity upside, with all indexes set to test their respective 200dmas.


sp'60min


Summary

*closing hour: some distinct weakness into the close... but still.. nothing significant.
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So... another broad day of chop.

No doubt some will be getting overly excited at the net daily declines, but then... most of those same people have been holding short from the sp'1900/50 zone.

For the moment I can't take any of the sporadic down waves seriously.

Lets see how China trades overnight.. and how the EU market reacts to the ECB tomorrow.

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more later... on the VIX

3pm update - chop into the close

US equities are set to close with further minor chop for a fourth consecutive day. The smaller 15/60min cycles are arguably floored at sp'2020, and with an ECB announcement/press conf' tomorrow, the equity bears should be very mindful that Draghi might help inspire a major break above the 200dma.


sp'60min



vix'60min



Summary

Tiresome day.

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*Oil remains notably weak, -1.7%... having tried to rally after the inventory reports.... failed.

2pm update - clearly a top is in, right?

With moderate cooling from sp'2037 to 2020, the chatter is once again increasing, and the top callers are out there. Its the same old nonsense... over and over... just as it was on 'jobs Friday' with sp'1893... then on the subsequent Monday with sp'1960s. Here we are... 2020s.. and they're still at it.

Meanwhile.. the 3 leaders.. are leading.

AAPL, daily



DIS, daily



INTC, daily



Summary

... and thats all I got to say about that.

1pm update - underlying upward pressure

It remains the case that despite an awful lot of chop (and top calling from some traders)... US equities continue to broadly climb, as the underlying price pressure is increasing to the upside. The bigger weekly cycles offer (in theory), a clear and easy 2-3 weeks further higher.


sp'weekly1b



Nasdaq comp', daily



Summary

*eyes on the tech'.. it is the first index to be brushing the 200dma. If we see the 4930s... it will bode for much higher levels into year end.
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Little to add.

Three big Dow stocks I highlighted from May-August - AAPL, DIS, and INTC, which lead the broader market down.. continue to push higher. Bears... beware.

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back at 2pm

12pm update - continuing chop

US equities remain in chop mode (day'4) but with rather clear underlying upward pressure. Equity bears simply are unable to muster any sustained/significant downward pressure, the sp'2040s remain due. If Draghi can 'inspire' the EU markets via increased QE threats tomorrow... a break above the 200dma will occur.


sp'daily5


USO'daily2



Summary

*price structure on Oil is a real mess, having tried twice now to break/hold the $50 threshold. Cyclically, it is due another up cycle in the immediate term
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As for the equity market, it should be clear, the underlying pressure is UP.  If the market can cope with the ECB/FOMC... the 200dma will not hold as resistance.

For now.. there seems zero reason to attempt any market shorts.

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notable severe downside in Valeant...

daily


It is notable that today has seen a death cross in VRX. I'd imagine some of those writing naked Puts will have lost everything today.
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VIX update from Mr T.



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back at 1pm

11am update - still too much oil

The latest EIA report of a weekly surplus of 8 million barrels is another reminder that the underlying supply issue has not been address. Cyclically though, Oil is due to rally into November.. back above the $50 threshold. Meanwhile, the metals aren't faring well, Gold -$11, with Silver -1.5%


USO' 60min



GLD, daily



Summary

*little to be said for the main indexes.. it remains choppy.. ahead of the Thursday ECB.
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re: Gold, price structure could be argued is a bull flag... but currently.. it is a failure to hold the 200dma.. and that ain't bullish... is it?
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As for Oil... the 5/15/60min cycles are offering a spike floor, with USO @ 14.34. The black-gold bulls need a daily close in the $15s... that won't be easy.
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notable weakness...

VRX, daily


What a train wreck.. .with claims that the whole thing is a fraud.

10am update - VIX slammed for opex

US equities open a little higher, sp +4pts @ 2035, whilst the VIX is slammed at the open for opex... breaking -8% to 14.41. With the USD broadly flat in the DXY 94.90s, commodities are under pressure... Gold -$10.. with Oil -1.4% in the $45s.


VIX'60min



sp'60min



Summary

There really isn't much to add.

The sp'2040s look probable today.. ahead of the Thursday ECB.

Unquestionably... eyes should be on China...  having seen the biggest daily decline in a month.
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notable strength:  DIS, +1%... set for the $111s... and onward to the $120s

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New stock...  Ferrari (RACE)

Marking a cycle peak as Alibaba did in Sept 2014?  Hmmm
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*awaiting the EIA report (10.30am)....

back soon


10.32am.. 8.0 million barrel surplus.... ugly.     Oil -2.3% in the $44s.

notable weakness. VRX -20%.. after claims the whole company is a fraud.

Pre-Market Brief

Good morning, and welcome to the future. It is Oct 21st 2015, with US equity futures moderately higher, sp +5pts, we're set to open at 2035. A break into the 2040s looks due, with a test of the 200dma tomorrow... if Draghi threatens more QE.


Finally... the future is the present


sp'weekly1b


Summary

So... we're set to open a little higher, as the underlying momentum increasingly swings back toward the equity bulls.

The market only has to ride through the next ECB and FOMC announcements... and if any daily closes in the 2070s... it will be a straight run into the 2100s.

*notable early weakness: oil, -1.4%.. ahead of the latest EIA report.

TWTR, -5.0% in the $29s.

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Doomer chart, Hunter with Merk

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Overnight Asia action

Japan: +1.9% @ 18554

China: hit a new cycle high of 3447, but cooled rapidly in the afternoon session, settling -3.1% @ 3320. This should be somewhat concerning to the bulls... who need to re-take 3400 again this week.
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Embrace today... its all we got.

China manages a close in the 3400s

Many won't have noticed (nor care), that with the Shanghai comp' seeing a net daily gain of 1.1% @ 3425, it was a rather important day in the Chinese equity market. Next target for the communistic bulls will be a break above the monthly 10MA (3694).


China, daily


China, monthly




Summary

Suffice to add... the current net monthly gain of 12.2% is the biggest gain since April. If October closes anywhere in the 3400s or higher.. it will bode for further upside.. at least to the 3650/3750 zone.

US equity bears should be extremely mindful that if China has seen a key floor.. it will bode for the sp'2100s.. .and new historic highs (at least in some indexes) before year end .

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Looking ahead

Wed' will see the latest EIA oil report.

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Goodnight from London

Daily Index Cycle update

US equities closed moderately mixed, sp -2pts @ 2030 (intra high 2039). The two leaders - Trans/R2K, settled +0.6% and -0.1% respectively. Near term outlook is for continued upside, with all indexes set to test their respective 200dmas.


sp'daily5



Nasdaq comp'



Summary

It is notable that the Nasdaq is now stuck at the 200dma.

Broadly though, if sp'2050/60s within the next 2-6 trading days.. the Nasdaq will be trading above the 200dma.. and that will bode for straight up moves in other indexes.

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a little more later...