Wednesday, 20 January 2016

10am update - twilight zone territory

US equity indexes continue to unravel, with the sp'500 decisively breaking below the Friday low. Next stop is the Oct'2014 low of 1820, but that makes little sense as a mid term floor. Instead, the door is wide open to the 1750/25 zone, where there are multiple aspects of support.

*without getting lost in the minor noise... the bigger cycles...




*that sure is one ugly monthly candle... indeed, very similar to Jan'2008. If you like the analogy, then the target is clearly the 1730s.. within days.

We're now in twilight zone territory, as we have a down wave that is longer than anything in many years.

Its notable that the VIX is yet to show any hyper upside.

If you believe we're headed for sp'1750/25 before end month, then VIX 35/45 would make for a natural capitulation spike.

notable weakness...

IBM, monthly

IBM is now -40% since March 2013. There is going to be strong support around $110... and that would equate to sp'1700s.

time for some sun.. and I need to shop... back soon

10.30am.. sp' hits a new low of 1837.. with VIX 28s.

Again, it remains the case that VIX is relatively subdued.. there is NO capitulation at all yet.