Volatility..holding firm

The VIX had a rather restrained day. The morning low of dow -100pts only resulted in the VIX +5% - not exactly a big move! With the market ramping (briefly) in the closing hour, VIX dropped 5%, but...in the brief 20mins post index-close...VIX recovered those losses, and closed effectively flat.


VIX, 60min

VIX, daily, bullish outlook

VIX, weekly

Summary

All VIX cycles remains bullish. First target remains somewhere in the 27/29 range. A brief spike into the low 30s is viable if the market gets spooked! If the job data tomorrow comes in under 100k, then perhaps we can see a VIX +20% day, taking VIX to 28/29.

More later, looking at the daily index cycles.

Closing Brief - last hour 'kick the bear'

An ugly closing hour for the bears. Sure, the sp'500 still closed down moderately, but we were 1298 earlier. The bears can feel justifiably upset at how today ended. With the VIX closing red, this is not the best of days for those short, yet I guess it could have been worse.

Lets look at how those hourly cycles closed...


IWM

Dow

SP

Summary

I'm guessing those nasty algo-bots did a stop-sweep in the last hour...kick as many bears out as possible, before allowing the market to drop quickly back into the closing bell.

The daily cycles certainly still bearish though..but today is yet another reminder of just how annoying this market can be for those who try to short it.

..and thus...May trading comes to an end.    More later...

3pm update - falling into the close?

Its that time of day again...do we see a mini ramp..or fall into the close? The 15min cycle is maxed..and offers good downside, but the hourly cycle is somewhat problematic. With a red VIX, bears have a problem right now.

Lets see how many of those bullish rats get twitchy, and decide to bail ahead of the jobs report tomorrow.


Sp'60min

VIX'60min

Summary

Bear targets for the close...
a close under the 10MA - currently 1309/10
VIX..at least marginally green, preferably 24.75/25.25

More after the close...

2pm update - fail..confirmed

Market bounce appears concluded on the 15min cycle...we have a possible confirmed fail at the hourly 10MA


sp'15min

Sp'60min

Summary

So...bears need a good close under the hourly 10MA on the indexes, and a green VIX, preferably in the 25s.

Friday we have the monthly jobless data, who wants to risk holding long overnight? I didn't think so.

1pm update - need a fail at the hourly 10MA

We've seen a bounce - to be expected, and it probably scared a few of the weak bear hands out of their short positions.

As noted earlier, what especially matters today is we see the indexes put in a fail at the hourly 10MA...we're there right now...so the next hour or two will be real important.


Sp'60min

Sp, daily, bearish outlook, count'2

Summary

I'm starting to like the daily count - noted above. If this is still a wave'5 (of main'1), then this down move will end tomorrow or early Monday. A quick VIX spike to 27/29 would help to confirm that.

Bears would much prefer - myself included, to close under 1300, and that makes a move to 1285/80 tomorrow morning relatively easy.

Keep eyes on the VIX, bears should still look for a close in the 25s.

12pm update - lunch time churn

With the market selling off to successfully break under sp'1300 - to the surprise of some, we've already seen a little bounce off the lows. What will be paramount for the bears later today is a fail for the indexes to break/hold over the hourly 10AM.

It remains important for the VIX to at least close moderately up today, a close in the 25s will be the target.


Sp'60min

Time for lunch!

11am update - look to the VIX

Weak market, Mr VIX is warning of significantly higher levels - 29/30, as early as tomorrow, which would equate to at least sp'1285.


VIX, daily, bullish outlook

SP'daily, bearish outlook

Transports, daily

Summary

I've seen enough to confirm this market is headed down at least to sp'1285.

The tranny is below 5k...its broken the bear flag...in my view, its confirming that SP' will be breaking the recent 1291 low within the next trading day or two.

VIX is strong, bears need to see a new high in the 26s later today..and that opens up a further 10% rise tomorrow.

10am update - bears need to break sp'1300

With the poor econ-data, market is starting to struggle in this first trading hour. I'm looking for a latter day sell off - not least due to concerns about how bad tomorrows jobless numbers will be.

Chicago PMI: 52.7  (56.2 April) - lowest since autumn 2009. Clearly, more great news confirming our great economic recovery.


Sp'60min

VIX'60min

Summary

Bears really need to build on yesterdays losses. Keep an eye on the VIX, bears will want to see 26s, which would be suggestive that a break to new lows (<1291) is coming.

First target..1300. That will open up a challenge of 1291...and then 1280/70 -  that could occur as early as tomorrow.

*I added some more index puts at the open...looking for sp'1280 within 2-4 trading days.

More later!

Pre-Market Brief - Weak Economic Data

Futures have lost their 0.25/0.5% gains...we're now flirting with minor red/flat. All the econ-data today was weak. There was no recovery..there will be NO recovery.

Weekly jobs: 383k - lousy
GDP (Q1, revised): 1.9 (2,2 first 'guess') - WEAK
ADP jobs: 133k (private sector) - not exactly green shoots of recovery

*Chicago PMI at 9.45am...which will be a market mover.
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Sp'60min

Summary

With the lousy econ-data just released, it will be important for the bears to capitalise on yesterdays swift move lower, and at least close today moderately red.

Good wishes for Thursday trading!

Euro/Dollar - target 1.20/19

Another lousy day for the Euro currency, the close of 1.2366 was very decisive, and its just a matter of days before the next target of 1.20/19 is hit.


Euro, daily

Euro, weekly

Summary

So, the Euro/Dollar will soon be down to 1.20/19. The issue is can it hold that level? If we break into the 1.18s, I'd assume there is a chance of a fast and dirty move to around 1.15/13. There is of course talk of 'parity'. The majority view is that will happen...but not until at least 2013. I suppose if the Greeks fail to form a government on their second election attempt, then parity may even come this summer - which would probably equate to sp'1100..if not sub'1000. Yet neither the Bernanke, nor the EU would be content to tolerate that sort of move this summer.
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The bears should watch the Euro closely, if we get stuck/floor in the 1.20 zone, - and if Sp'1280...that would probably be a good area to close all short positions.

Support the site....tell your other trader friends!

Goodnight from London

Daily Cycle Update - Bearish days ahead!

The market fell away into the close, and with the VIX giving good confirmation (+14%), it looks like both tomorrow and Friday will be in the hands of the bears.


IWM, bearish outlook

SP' bearish outlook, count'3

Dow, daily

Transports, daily

Summary

I think the above 4 charts make the near term outlook very clear. We have the bear flags on the indexes already starting to get confirmed with today's move lower.

We will know for sure that a new bearish down cycle is underway when we break Sp'1300 - which could come as early as tomorrow. A new high for the VIX in the 26s would be added confirmation.
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So...a good day for the bears, and I will say that its always good to see the bear flags play out. The issue now is whether we fall to the lows from last December..or November. If its December, that's around 600pts lower for the dow, around 60pts from the SP...so..maybe we're looking at 1260 - as the completion of the first major wave lower.

It will be important to keep a close eye on the VIX in the coming days. Especially, look for a VIX spike day- or even a opening VIX gap up - which turns into a black doom/fail candle - warning of a VIX peak - and conversely...the market indexes flooring.

Volatility..ramping into the close

A little bonus for the bears just after the close (VIX trades for 20mins after the 4pm close), VIX closed in the 24s. This is a good significant move higher, with the target for this new wave somewhere in the 27/29 zone - probably within the next 2-4 trading days.


VIX'60min

VIX, daily, bullish outlook

VIX, weekly

Summary

The bulls could not break the VIX below 20 yesterday, and today we've seen a good confirmation for the bears. We have yet to see any major panic/capitutalion day/s in the market...the VIX looks set to jump higher in the coming days.

If Sp' can break below 1270 early next week, then there is the chance VIX could briefly break into the low 30s.

More later...looking at the daily index cycles.

Closing Brief

Market closed relatively weak, certainly not at the low of the day, but overall...today does indeed completely reverse all of yesterdays nonsense. The VIX gain of over 12% confirms this move lower, and so the bears can feel reasonably confident into the weekend, and perhaps beyond.


IWM'60min

Dow'60min

SP'60min

Summary

Its looking good for the bears tomorrow and also Friday. We have GDP data and the monthly jobs data tomorrow and Friday respectively - both could easily knock the market down a further 3% - getting us to the sp'1280 level.

The daily cycle is especially warning of major downside,  with target levels under <sp'1280. - more on that later.

3pm update - rolling over into the close

The market has seen a bounce - as the 15min cycle displays clearly, and I'm guessing we are going to rollover very nicely into the close. A close under 1315 - last Fridays low, would be useful. A close at the low of day sp<1311 would be very bearish for tomorrow.

As often...look to the VIX, a close in the 24s would be good confirmation for those seeking sp<1300 by the Friday close.


Sp'15min cycle

VIX'60min

*Ohh, and I'm looking for FB to close in the 27s ;) ... $10 down....$14 to go.
 
More after the close!

2pm update - minor bounce

A lot of the chess pieces were on the move today, bond yields making new lows..the Euro breaking 1.24, and WTIC' Oil breaking under 90 - down around $3.50 today. Equities 'should' in theory be a lot lower than they currently are, and I will look for them to catch up - with much further declines tomorrow/Friday.


Sp'15min cycle

Sp'60min

Summary

I don't think bears - who took new positions this morning have anything to be concerned about with this minor up move. For the serious money, good stops of course - either at yesterdays high of sp'1335..or tighter..1330/25.

It will be interesting to see how the market closes.Yesterday we saw a mini ramp, can we close today at the low of the day?

Arguably, bears really need a close under the hourly 10MA @ 1321. A close under 1310..would be a real gift for the bears..but that seems unlikely.

1pm update - all aboard the bear train

Whilst lightning bolts start to rain down outside (a very appropriate mood setter), I've a screen of red. After yesterdays latest nonsense, once again 'reality' returns to our favourite casino. How long will the break from the delusion that 'everything is fine' last? A day, a week..or even into late June?

The primary monthly cycle target remains sp'1100. In this new wave lower, a move to at least 1280..possibly 1225/00 seems viable - if the market finally gets spooked, so look to the VIX.


Sp'60min

Vix'60min

Summary

VIX is confirming everything very well, a close in the 24s would easily suffice..and it opens up a jump to the high 20s by the Friday close.

*look to the Sp' breaking 1305 (lower channel of the daily bear flag), and then a fast move under 1300...to confirm both the daily and hourly cycle flags.
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Much more later...those daily charts will be paramount to focus on after the close.

12pm update - bear flags soon to be confirmed

For the bulls, today is probably starting to get really annoying. I'd suggest anyone who is bullish take a look at the daily chart for any of the indexes. An added extra would be if they took a peek at the monthly cycle.


IWM, daily, bearish outlook

SP' daily, bearish, count'3

VIX, daily, bullish

Summary

*the count on all of the above charts is not something I am very happy about...but the target zones (yellow boxes) I still hold to.
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I believe the bear flags on the daily index cycles are going to be confirmed..with the Transports almost having done that already.

Look for major VIX upside all the way into Friday, target range is around 27/29. A brief spike into the low 30s is viable if we break sp'1260 - but that would seem unlikely until next week, if at all.

Time for lunch!

11am update - Bears looking to break 1300

The daily cycles are now key to focus on, the 'old leader'...is leading the way lower....


Transports, daily

Sp'60min

Summary

The transports is again leading the way...and its even quite close to breaking the big 5000 level - which I warned about last night. You can see a clear bear flag...and its arguably close/is breaking it already this morning.

I'm guessing we do seem the tranny break 5k...and that in my view means sp'1300 WILL be broken...and then 1291...opening up considerably lower levels.

As was the case since the 16 day down cycle, we've had ZERO panic/capitulation in this market. Perhaps this wave lower..is where we will see it.

I suppose I could label the past week a wave'2...in which case today is the start of a 3 - a severe collapse wave..but for the moment..lets just see if we can first break 1300.

I'm guessing we will...no later than the Friday open.

10am update - a VERY important turn lower

With the market dropping around 1%, things are starting to get real interesting again. The bigger cycles remain bearish of course, so the underlying pressure is ALWAYS downward. So far the VIX is spiking higher...and confirming trouble for the rest of this week - which is filled with key econ-data.


SP'60min

VIX'60min

Sp'daily (simple version)

Summary

More than anything, the daily index charts are most important. The bear flags that have formed on ALL index charts are suggesting a major secondary move lower is due.

First target...sp'1300 - to confirm the bear flag on the daily cycle.
1291..to confirm the bear flag on the 60min cycle....that opens up the 200day MA at 1283.

Right now, my best summation from all of this...'if we break sp'1300'.....then we're going to down to at least sp'1270/50 within 3-7 trading days. It might even be faster if the market gets upset.

*the big money players will likely pile in on the short side once we break 1300 again.
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What will be useful in the days ahead, is the speed/style in which we fall. If its just minor moves (and I'd include today's move so far)...then we're likely going to level out around 1270/80. However, if we start falling dow 275pts or more, then maybe a move to sp'1225/00 is viable.

It does look like we have an interesting day ahead.....more later!

Pre-Market Brief

Good morning! Futures are showing significant losses of around sp-10pts (we were down -14 earlier). I'm not sure what the reason was, but there were some crazy swings to the upside around 7am (See Finviz). The bears will clearly be somewhat delighted to see this opening move lower...will the bulls/algo-bots buy the dip?


Sp'60min

Summary

So, right now we are set to open around sp'1322. Despite how exciting that might be for the bears, even 1322 is 22 pts away from breaking the key 1300 level.  I guess we'll floor around 1315 by 11am or so.

Only with a move under at least 1315 can the bears start to wonder if we are seeing a trend change.

Even more so, only with a break below sp'1300..(32 points away right now!) can the bears seriously consider that the current rally is over.

For a clue as to whether we have a chance at breaking below 1300...look to the VIX. Bears will need to see a VIX +7/10% day. Anything less...it just won't be enough.

*It sure does look like a bear flag on that hourly chart..to confirm it..we need a break to a new low sp<1291...41pts lower.  We have GDP and Jobs data Thur/Friday, so there IS the possibility of a major down move.

The bears have an opportunity this morning... will they be able to hold onto such declines...and build on them?

More across the day.

The 2009-2011 trend line - monthly cycle

A poster pointed out something to me which I've been remiss to note. The trend line from the index lows of March 2009, all the way up to last October'2011..such a trend line (purple) offers a possible market floor of sp'1225/00 by late June/July.  Will that be the low for this year though?


SP'monthly

Transports, monthly (bearish/doom chart)

Summary

There is no question - as I've noted for the world indexes for 3 months now, that we are rolling over. The issue remains..where is the floor? When will the printing man..aka..the Bernanke appear? The Fed never pre-empts a market fall, so at what level might he step in to announce he is spinning up the printers again?

I have to think that sp'1225/00 will simply not be enough of a down cycle for the Bernanke to appear. The natural level in my view remains sp'1100/25 - no later than October.

Re: the Transports chart....

You can ignore the 'crazy talk' count, I'm not much a fan of it myself, but the key issue is that the 5 month flat top did break below 5000, and we're likely going down to at least 4500. Were there serious social/financial 'issues' this summer in the EU, then trans'4000..if not the natural 3500 Fib zone area appears still very viable.

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**Special note...I do really welcome all comments, especially when it comes to targets for the indexes (stocks, VIX, currencies too!). so if you think I'm failing to note something important, please let me know!
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As for Wednesday, there is only some housing data to come, doubtless the market will be pulled in both directions by more endless rumours from the EU. The bulls do have the ball right now, but they are facing multiple brick walls of resistance at sp'1340, 50/60 and especially the 1370/80 zone ;)

Goodnight from London City.

Daily Cycle Update

With the main indexes rising over 1% today, everything is back to risk-on, yes? Err, no. The bigger monthly index cycle can easily dismiss such market action as mere 'noise'. Lets look at a few of the key daily cycle charts...


Sp'bullish outlook

Sp'bearish outlook'2

Transports

Summary

The transports - despite today's rally, remains in a very clear bear flag. There is going to be a real struggle to break above 5200/250 by the end of this week. In fact, I'd be looking for the tranny to break below 5000 in the coming days. If that's the case...then we should look for sp to break under 1291.

My best guess for the mid-term would be something like the second chart - where we level out in this wave'2. These small moves are always a tricky thing to guess, and in the bigger scheme of things, it doesn't matter anyway.

As for the bullish scenario chart, well, I suppose if the Bernanke appeared - overtly hinting at QE3, and if the Greeks formed a cohesive new government in June..maybe then I could envision this market breaking to a new high >sp1422. Yet even then, the econ-data (both within the USA, and worldwide) pretty much sucks, there is an increasing weakness across the world economy. The idea that Sp' can comfortably remain above 1300...no, I don't think so.

Also, considering that the VIX continues to show some underlying strength...I'm still guessing the indexes will be considerably lower in the coming weeks and months.