Thursday, 14 January 2016

VIX begins cooling

With equity indexes building powerful gains across the day, the VIX has begun to cool from the recent high of 27.39, settling -5.0% @ 23.95. Near term outlook offers the sp'1956/80 zone, and that will very likely equate to VIX back under the key 20 threshold.




Suffice to add, VIX looks set to broadly cool into the coming 3 day weekend, and probably most of next week.

The only issue is whether VIX floors in the 19/18s... or 17/16s.

Sustained action <15 looks extremely unlikely, as the equity market looks set to break <sp'1867/20.. and fall into the 1750/25 zone.

more later... on the indexes

Closing Brief

US equities opened a little shaky - with a new cycle low of sp'1878, but then surged, building powerful gains, sp +31pts @ 1921 (intra high 1934). The two leaders - Trans/R2K, settled higher by 1.2% and 1.5% respectively. Near term outlook offers the 1956/80 zone, along with VIX back under the key 20 threshold.



*closing hour action: a new intraday high of 1934, a little cooling, but nothing for the equity bears to get excited about.

Finally, a day for the equity bull maniacs, most of whom must have been really spooked with the sp'1870s in early trading.

Clearly, we have a short term floor of 1878, and look set the for 1956/80 zone.

Sustained action >sp'2K looks out of range.

more later... on the VIX

3pm update - net daily gains

US equity indexes are set for the strongest net daily gains since Dec'4th. If sp'1956 can be hit in the current wave from 1878 - whether tomorrow/early Tuesday, then after a B' wave retrace, a C' wave to the 1980s looks probable, and that will equate to VIX back in the upper teens.




So...a day of gains, with the down wave from 2081-1878 complete, having taken around 10 trading days.

Considering the current price action, the 1950s do look likely tomorrow.. or after the long 3 day weekend... next Tuesday.

Equity bears look set to get an opportunity to re-short in the sp'1980s... along with VIX <20.

.. and right now.. that is a good thought :)

notable movers..

AAPL +2.5%
FCX +8%
RIG +6%
TWTR +2%... but still only in the $19s.

weakness.. TVIX -8% @ $8.70.. which is a touch above where I originally bought last Thursday. The $6s look due.

back at the close

2pm update - equities building gains

Unlike yesterday, price action is far stronger, with a daily close likely >sp'1910 - which considering the opening low of 1878, is rather impressive. A continued rally across most of next week looks due, to the 1956/80 zone, with VIX set to cool under the key 20 threshold. Gold is -$21 as market fears subside... for a brief while.


GLD, daily


*I've just gone through and updated my primary list of individual stock charts, and almost every single one is offering a POWERFUL spike floor. Although it is notable that MANY stocks have broken below their respective Aug'24th low.

There is now increased confidence that we have a short term floor, and now the only issue is whether the rally maxes out next week.. or in FOMC week.

The broadly picture remains absolutely bearish.

notable reversals...

TSLA, TWTR, AA, APA, AAPL... its a long list.

weakness, miners, the ETF of GDX -4.2%, as the precious metals lose the fear-bid.

1pm update - renewed strength

US equities see another micro up cycle, with the sp +26pts @ 1916. Clearly though.. price action remains somewhat twitchy, with the VIX comfortably still above the key 20 threshold. Equity bulls look set to battle upward into late next week, with an initial target of 1956... and VIX 20/19s.




Not much to add.

Unlike yesterday, the market looks set for a net daily gain. Now it seems to be a case for the equity bears to wait for the sp'1950/80 zone.

Clearly.. there will be a lot of stops around the Tuesday high of 1950.. and if that does break... then 1980s are viable.

The daily MACD cycle is offering upside into FOMC week, but considering we saw a 10 day down cycle, I'd be surprised the counter rally last past next Thursday.

notable strength...

Copper miners: FCX +9%, TCK +10%

DISCA +2.4%

weakness: miners, GDX -3.6%, as Gold -$15.. losing the 'fear bid'.

12pm update - battling to hold gains

The current gains sure are shaky... but it does look like they will hold, as a viable wave from sp'2081-1878 is complete. A bounce should be at least 4-5 days in duration, to the 1956/80 zone. Sustained action >2K looks absolutely out of range.



Its clearly a pretty fierce battle as the bears are trying to drive things lower, but this time... it seems unlikely they will spiral things lower.

.. but as I will keep saying in the weeks and months ahead, regardless of the bounces... the default trade will be short, as the giant monthly cycles are screaming bearish.

From a technical perspective, the setup in April will be the same as Sept'2008, and we remember that, right?

notable weakness...

TWTR, daily

What a train wreck of a stock, losing all direction.. lead by a part time maniac who is surely just hoping someone like AAPL or GOOG offer a buyout.

VIX update from Mr T.

time for tea.... if only to warm up a bit more

11am update - powerful hourly candle

It has been a bit of a messy 90mins, with opening gains failing, fractionally negative indexes, but then surging, as a short-stop cascade appears to have occurred. If we've a 5 wave decline from sp'2081/1878, then in theory... the next move is a 4-5 day rally to the 1956/80 zone.

sp'60min'2, waves



*the above equity hourly chart includes a wave count, but considering the weekly/monthly charts are screaming bearish, I've only MODERATE confidence in it.

For the moment, that is my best guess.

By default... no shorts until next Wednesday... at least until sp'1956. Considering the daily MACD cycle, there is even threat of the 1980s.. and that would make for a very comfortable level to re-short into end January.. and across the spring.

Here in London city...

Moody skies, with a touch of sun.... and with a damn icy wind.

time to cook

10am update - opening gains... failing again

US equities open moderately higher for the fifth consecutive trading day, but with the indexes already turning fractionally negative. From a cyclical perspective, there is inclination to the upside to an initial target of sp'1960, with a time frame of next Wed/Thursday. Broadly though, this market remains unquestionably broken.




*I wanted to highlight the daily chart already, since I think many are overlooking yesterday's powerfully bearish engulfing candle. Typically, that would bode for much lower levels in the immediate term.

A daily close >1900 looks tough.

Comments from the ECB and Fed official Bullard are helping calm things though, as there are some rumours/chatter of more QE and extended easing. Same old nonsense, right?

How could anyone not consider that if sp'1600s this spring/early summer, the Fed would not seriously consider spooling up the printers once again?

Best guess... equities to rally to 1960, but to be clear... I see ZERO reason to play the long side, as the default trade is to the short side.

If I miss further downside, I can live with that. At least I'm not long... on leverage!

notable weakness....

TWTR, -4.6% in the $17s 
GPRO -17% in the $12s

time to shop... back soon

10.36am... powerful upside candle...offering provisional floor.... so... the 1960s might be hit after all.

VIX -6% in the 23s. I'd really prefer to go long VIX from the 18/17s

Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +3pts, we're set to open at 1893. USD is u/c in the DXY 98.80s. Metals are weak, Gold -$8. Oil is a touch higher, +0.1% in the $30s.



Market mood remains broadly weak.

Right now, we're clearly due a bounce... but anyone considering going long, should be well aware there is serious threat of the 1750/25 zone before end month.

Default trade remains to the short side across the weeks and months ahead.

Considering the recent equity drops, the VIX remains relatively lower in the 25s. We sure haven't seen any capitulation spike yet.

Update from Oscar

Chatter from Riley


Overnight action

Japan: -2.7% @ 17240.... to be expected
China: late day rally, +2..0% @ 3007

Germany: currently -2.3% @ 9735.... the 10K threshold is now looking a long way up. First real support is the double top of 2000/2007, around 8K.

Have a good Thursday

8.48am.. sp +8pts @ 1898.

It is notable that we could see a sig' gain of 1%, but that only reaches sp'1910... still 3% short of the updated basic fib bounce target of 1960.

Anyone seriously think we can trade >2K, before 1750/25 ?

notable mover, TVIX -2.4% @ $9.30.... which is right where I sold it at on Monday afternoon. 

They made a movie about Cramer, lol

A new movie trailer has appeared for 'Money Monster', which is clearly based on Jim Cramer and his program 'Mad Money' on CNBC. Produced by Smokehouse Pictures, and distributed by Sony Pictures Entertainment, it tells the story of a viewer whose latest trade didn't work out so well.

George Clooney as Jim Cramer,  Lee Gates

*warning: trailer contains significant plot spoilers, but hell, this is no Citizen Kane, and I'd recommend viewing it anyway.


First, let me say.. I'm not surprised to see such a story be put together.

The Cramer is a truly infamous character, having appeared in a few movies (most notably, Iron Man), and his 'Mad Money' show is pretty well known.

We now have a fictional story of a really pissed trader who goes after the host on live TV. The movie looks okay (if somewhat predictable), and Clooney and Roberts are always good.

Technical difficulties indeed

Yes.. its the 'sell sell sell' button

Cramer.. I mean, Gates wearing a bomb vest

The evacuation of clown finance TV

William Banzai... suit up!

Money Monster is going to offer all sorts of fun opportunities for those with photoshop/video editing skills. Mr Banzai - of Zerohedge fame, will no doubt be on the case with this latest financial movie.

I do wonder what Cramer and CNBC will make of this movie... due for release in May.

Ironically, the market should be at its weakest across the April-June period.. so... its all syncing up rather well :)

As for the equity market

There is a possibility that we're seeing a 5 wave decline from sp'2081.. and have.. or are about to floor. If you consider that we fell across 10 days.. a bounce would likely span 4-5 days... with a viable fib' retrace to the 1960/80 zone.


On the bigger weekly cycle...


The 1750/25 zone remains a serious threat in the near term, not least if the Aug' low of 1867 fails to hold. Keep in mind that the two market leaders - Trans/R2K, are already both below their respective Aug'2015 lows.

Looking ahead

Thursday will see more earnings, notably JPM.

Data: weekly jobs, import/export prices

*Fed official Bullard will be speaking in the early morning

Goodnight from London

Daily Index Cycle update

US equities opened moderately higher to an early peak of sp'1950, but then increasingly spiralled lower, settling -48pts @ 1890 (intra low @ 1886). The two leaders - Trans/R2K, settled lower by -3.7% and -3.3% respectively. With the loss of the 1900 threshold, the door is open to the 1750/25 zone.





Most notable today... a reversal from opening moderate gains... with a powerful swing of 3.2% for the sp'500.

sp'500 - the Aug' low of 1867 is an easy target. Any failure to hold that... and 1750/25 (where there are multiple aspects of support).. before end month.

R2K - now in the 1010/00 support zone. Any price action <1K would bode for continued and increasingly powerful declines.. equiv' to sp'1700s.

Trans - a new multi-year low of 6675...seemingly headed for 5500/5000 in the months ahead.

a little more later.... on a new movie!