Volatility a touch lower

The VIX actually had a pretty flat day, which was surprising considering the moves/direction of the main indexes today.

Arguably, the most bearish chart of the week, the VIX weekly cycle, where we have a confirmed close outside of a giant wedge. Immediate upside target is 21, sometime next week.


VIX'60min

VIX'daily

VIX'weekly

Summary

Considering the indexes were dow +120pts earlier today, the VIX held together pretty well, Also, the fact that the uncertainly inherent about Jackson Hole is also out of the way, the VIX did hold up well indeed!

The hourly and daily cycles show a nice near term up trend that is still broadly continuing.

However, most important of all, the weekly cycle did get the confirmation I was seeking last weekend. We have another tick higher on the MACD cycle, and we are set to go positive cycle at the Tuesday open.

The weekly VIX cycle is warning of index declines next week. Sp'1385/80 looks very viable next Tue/Wednesday.

More later

Closing Brief

I think today was a bit of a rough day for most traders, and for many, August as a whole was a difficult month - even for those on the bullish side.

The closing hourly index charts...


IWM

Dow

Sp

Summary

So, August trading comes to an end. September is going to be a lot more active...I hope.

The hourly index cycles are a real mess after today's chop, but at least, Jackson hole is out of the way. We're done with that nonsense for another year.

Next up...the monthly jobs data next Friday - although there are various EU meetings early next week, that might take more centre stage.

I remain seeking at least a hit of 1385/80 early next week.

Have a good weekend!

*More later this evening, with bits and pieces across the 3 day weekend.

3pm update - closing hour weakness?

The big closing hour, of Jackson Hole day. The last trading day of August, and hopefully, the end to the summer doldrums.


sp'5min

Summary

Well, lets see how we close into the 3 day weekend

*I've added to existing index shorts, from the sp'1408 level.  Certainly not the top of the day, but, its barely 1% from the recent 1426 cycle peak.

2pm update - it remains a mess

This is one hell of a way to end the month. Today's chopfest continues.

Just look at the 5min chart for today...

sp'5min

sp'60min

sp'daily5

Summary

What can be said today, other than 'urghh'. The moves in themselves are less than 1% swings, but still, its starting to really get annoying.

*as for the closing hour, who wants to hold across a 3 day weekend? Bears are highly susceptible to a Tuesday gap higher - ECB issues? , whilst bulls are going to have face a lack of QE until after the election.

Ugly market, and for many...an ugly August.

Stay tuned.

12pm update - fiercely choppy

What a semi-horrific mess its turning out to be. I guess this is one way to lead into a 3 day weekend

Early dow 110pt gains collapse to near evens, now we're back to +120pts, with the VIX -3%, the dollar is getting smacked lower, with most indexes up around 0.75%.


sp'60min

sp'daily5

Summary

A real mess, and the immediate hourly cycle trend is starting to look toppy again.

Downside target is 1385/80 still, but thats assuming a new multi-week rally is not beginning today.

Very unreliable trading day.

*Metals are making clear breaks higher

10am update - At the Hole

Good morning. The Day of the Hole, and we're already in ramp mode.


sp'60min

sp'daily5

Summary

Lets give this nonsense a few hours to find a clear direction.

As I been noting for a few days, the problems the bears face is the MACD daily cycle is already pretty low, and right now, its starting to tick higher again.


Rus'2000, warning of trouble?

IWM,60min

The black candle of doom to open the day. Hmm, not the best of starts, and IWM is close to going red.

Can the tranny close under 5k this August?

Friday is not only the last day of the week, but the end of trading for August. Once again, its important to watch how the transports closes the month.

Today's close under the big 5000 level was pretty bearish in itself, but how we close Friday will be infinitely more important.


Transports, monthly

Transports, monthly, rainbow

Summary

So, the tranny closed at 4993, that's pretty good for the bears, but can it hold under 5k tomorrow to close the month? Its too hard to call, regardless of what the Bernanke says, what will be even more important is how the market interprets the words. Market perception - whether delusional or 'facing reality', remains the key aspect.

The rainbow chart is still sporting a red candle for the tranny, and remains one of the first real warning signs for September.

Best guess for Friday, a sell off, as far down as sp'1385/80, but that will probably be it for this cycle. We have a 3 day weekend ahead of the market, and considering the MACD cycle on the main indexes, we could easily see a 2-4 day recovery next week. The only issue then will be, can we put in a lower high <1426, or continued further melt upwards

What remains central to this autumn, are the two events of mid-September, the FOMC of Sept'13, and the German constitutional court ruling on the ESM of Sept'12. Both will largely determine whether the SP' drops to 1200, or will continue to melt higher to close the year in the 1500s.

One thing is for sure..August is almost done. ;)

Goodnight from London

Daily Index Cycle update

The market closed moderately lower across all indexes, with the VIX confirming the move. The dow is closest to breaking the trend line from the June low.


Dow, daily

Sp, daily

Transports, daily

Summary

An interesting day. Sure the declines were barely 1% for some indexes, but its the first decent bit of price action in over 5 trading days.

The dow is actually pretty close to breaking the June rising trend line, we only need to hit 12925 tomorrow - a drop of only 75pts to make a clear break. The next key level is 12800, so there is a near term 200pts to the downside available.

Sp' downside target remains 1380, it will be very difficult to break under that. Secondary target - the previous cycle low, is 1354. As I keep highlighting, the bears need sp'1340s to get confident.

The tranny closed under the important 5000 level. A close tomorrow under 5k would be a really important warning, and make for a nice red candle on the rainbow monthly chart.

A little more later

Volatility approaching important levels

With the market actually showing a little weakness today, the VIX closed higher, but only by 4.5% to the 17.8 level.


VIX'60min

VIX' daily

VIX'weekly

Summary

So, after two trading weeks, the VIX is up from the low 13s to the high 17s. It is still a very low VIX level though, but the trend is certainly up.

Bears should seek a VIX weekly close >18 tomorrow. Anything in the 19s would be a real bonus.

The 'doomer bears', will certainly be seeking a VIX of 35/45 this Autumn at some point. The weekly VIX cycle is due to go positive MACD cycle next week! An 'explosive' move is....soon viable.

More later

Closing Brief

Finally, a little bit of price action! Market weak into the close, and close to breaking the baby bear flag. A good close for the bears.

However ,the VIX still shows little conviction of serious upside, only climbing 3% to the mid 17s


IWM'60min

Dow'60min

Sp'60min

Summary

Bears should be content with today, especially the closing minutes. First downside target remains a very obvious '1380.

A lot will indeed depend on the Bernanke tomorrow, yet as ever, how the market interprets the words..even more important than the words themselves.

More later in the evening

3pm update - baby bear flag?

Declines continue to largely hold, a baby bear flag is currently apparent on the hourly cycle

sp'60min

Summary

Its not bad little flag, so long as we don't climb back about the hourly 10MA of 1404/05, it can be said to be a bearish formation for the closing hour and into early tomorrow.

1380 sure looks 'best case' tomorrow, I just can't see anything below that in the near term.

The transports might get a very important weekly, and monthly close <5000 tomorrow.

More after the close

2pm update - declines..holding

The declines are at least holding. VIX remains clamouring onto gains of a mere 4%. It remains a very stable market, there is still no serious concern out there.

Considering the daily MACD cycle - as seen on most indexes, we're pretty low, it'll be real tough to break 1380 this cycle. I don't think it'll break.


sp'daily5

VIX,daily

Summary

I think a few are actually surprised we're dow-100pts right now. Its still only a 0.75% move though, and barely rates as 'moderate'.

As for tomorrow, its really hard to call, but clearly the immediate trend is highly suggestive of weakness down to around sp'1385/80 at some point tomorrow. That would make for a very natural low before the 3 day holiday.

*stock movers,  AAPL is fairly weak, breaking the daily 10MA. Coal miners are lousy..again.

Stay tuned

12pm update - weekly cycles are a little interesting

Without getting lost in the day to day noise, the bigger weekly cycles are indeed showing some interesting trend changes.

Even the VIX is starting to flash an initial warning of trouble for the September-October period.


NYSE, weekly

VIX, weekly

Summary

I think the above two charts pretty much summarise where we are at. The VIX is showing a provisional breakout, but we need a close in the 18s tomorrow to solidify it.

The master index is rolling over, but bears must not get confident until we break <7800. That sure won't happen tomorrow, and it should be the target for the first half of September.

An interesting day, and its something of a relief to see some price movement!
--
back at 2pm.

10am update - pre-Bernanke mark downs

Good morning. It looks like we're seeing some pricing in of disappointment tomorrow for those seeking QE in the near term. VIX is only up 3% though, that's pretty weak considering the opening drop.


sp'60min

sp'daily5

Summary

I'm not at all getting excited over this open, I sure don't trust it. The move is still minor, and VIX is not suggesting anything that can be sustained.

Best bear case tomorrow, is a move to the trend of 1380. I don't expect that to break, but even if we do, the vastly more important trend of 1350 is going to be concrete resistance.

Just consider the daily MACD cycle,its already pretty low, sure won't be easy to go much lower. All it'll take is one comment from Draghi to whipsaw this nonsense back upward.
--
Back at 12pm.

The Master Index - rolling over on the weekly cycle

Whilst the US markets are effectively flat lining, awaiting the words of the Bernanke this Friday morning, there are some very early signs of a rollover.


NYSE Comp, weekly, 2yr

NYSE, monthly, rainbow, 6yr

Summary

Clearly, we need a break <7800 before the broad uptrend can be said to be broken. In fact, at least 1 or 2 weekly closes under 7800 until we can be confident that the post-June up cycle is complete.

Downside target - if 7800 broken, is arguably around the 6900 level. That would equate to sp'1200 -which is currently my 'best bear case' target' this Autumn. There are a fair few people looking for <1200, but I find that hard to believe as viable. Also, lets not forget, the Bernanke will be out there, and my best guess is that QE3 will be announced at the FOMC of Dec'12'th. That would coincide with a very natural Santa rally into Christmas/early 2013.

As a counter to the weekly cycle, the monthly rainbow chart for the NYSE is still outright bullish, with two consecutive green candles. This is certainly not good, and we'll need to see September close with a blue, or preferably red candle.

So, the Bernanke is now just over a day away. His remarks aren't even televised live (I believe). Doubtless the cheerleaders on the clown networks will all be on suicide watch if Benny is not overtly hinting at further easing/policy measures for this Autumn.

Friday...could be interesting, but lets not forget, we've a 3 day weekend ahead (US markets closed Monday). Before we realise it...summer will be over, its time to prepare.

Goodnight from the Paralympic capital of the world

Closing Brief

Another day of nothing.

The closing hourly index charts...


IWM

Dow

Sp

Summary

Dull. That is the only way to call it.

The VIX closed up 3% to around 17., still remarkably low considering an uncertain autumnal period ahead.

It would seem unlikely tomorrow will be any different than today.

More later

2pm update - micro moves

We are indeed back to zero volume meltup. No news, no nothing, which merely allows the bots to take over.


sp'daily1

Summary

We remain in the centre of a broad up channel from the June 1266 low. Baring a break of 1350, primary trend indeed is most certainly bullish.
-
Back after the close.

12pm update - still minor noise

Pretty dull isn't it? A few pts up..a few pts down. Perhaps..the dullest trading month in a few years. I look forward to September, it can't be any less exciting than this.


sp'daily3, rainbow, news

VIX, daily

Summary

Sp'1350 is clearly an obvious target level for the bears, yet that looks a long way down. I been endlessly mentioning 'need 1340s' for weeks now, and nothing has changed in that respect.

With Labor day next Monday (US market shut!), once Benny is outta the way late Friday morning, it might be worth just turning it all off then.

VIX is up a little, but it'll be really difficult to break over 18 - a key level on the weekly cycle..

*metals and oil remain weak, but so far, its only a minor fall.

back at '2pm

10am update - another quiet day

Good morning. With still two more days until the Bernanke appears at the hole, it looks we have another dead day ahead of us. Urghh


sp'60min

sp'daily5

Summary

Downside remains 1380', that would make for a post-Bernanke 'disappointment' reaction, but I sure can't see 1380' breaking this cycle. Just look at how low the MACD (blue bar histogram) cycle is already.

Regardless of what happens Friday, it doesn't seem like anything going to happen today.

*Metals a touch weak, they sure don't indicate QE in September.
--
back at 12pm

Transports.....RED !

To close today, lets take a look at the transportation index, which yesterday turned red on the rainbow chart!


Transports, rainbow, monthly, 6yr

Trans, weekly

Summary

If the tranny can close this Friday at or below the current level of 5061, then we will indeed get a VERY important sell signal..a red candle!

This would be the first monthly red close since last September.

If the 'old leader' is still indeed the leader, then we should expect the rest of the market to follow in September.

As for the state of the other indexes, they only have blue candles on their respective rainbow charts, and the sp' is actually outright bullish-green. So, there it is certainly a mixed situation.

So, lets see if we can close this Friday - and the month, with a red candle. A close this Friday under the big 5000 level would be particularly welcome. It would break the triangle - as seen on the weekly chart, and opens up a move to break the June low of 4800.

The new red candle offers the very first official sign of weakness, the Autumnal downside target for the transports is at least 4500.

Goodnight from London

Daily Index Cycle update

A quiet day in market land, lets take a quick look at the sp'daily chart - with added scenarios!


Sp'daily5b - scenarios

Summary

The scenarios on this chart arguably cover most of the near term outcomes. With the Bernanke due to speak within a few days, its no wonder things are dead quiet. Everyone - especially those algo-bots, are merely in a holding mode.

From a MACD (blue bar histogram) cycle perspective, we've already come down quite a way, and this has to be seen as a real problem for the doomer bears. It seems VERY unlikely we can break considerably lower on a 1-2 week basis.

Right now, I prefer scenario C'. I certainly think 1380 will be too hard to break in the current cycle. The only hope for bears is that we'll put in a slightly lower high, and then rollover sharply around mid-September. Of course, for any index declines below 1350, we're going to need to see VIX back above 20

A little more later.

Volatility..poised

A quiet day in the market, VIX closing a touch higher, but remaining in the very low mid 16s.

Lets forget about the minor day to day noise, and focus on the bigger picture...


VIX, weekly

Summary

We have a very clear descending wedge, and a break upward is viable within the next week or so. There is some very natural resistance around the 20/21 level, and at the upper bollinger of 24/25.  It sure won't be easy to bust into the low 30s, a level we've not seen since last December.

The underlying MACD (blue bar histogram) cycle is finally turning higher, and we should go positive cycle within about 2 weeks. This is a very good outlook for the doomer bears out there, who are looking for some serious volatility this September/Autumn period.

Near term target remains 18/19 - as seen on the daily cycle, but as noted for many weeks now, until the VIX is back over 20, any index cycles are not to be taken seriously.

Lets see if we can break over 20 by mid-September, when we have not only the ruling from the German constitutional court, but also the next FOMC policy decision.

A little more later.

Closing Brief

Despite a few pieces of econ-data this morning, the market held together, and with a few EU rumours, the day was largely flat, with zero volume. Clearly, a healthy market, and bullish for those stockbrokers who must be so busy! I can't wait to see their Q3 earnings, urghhh.

The closing hourly indexes..


IWM

Dow

Sp

Summary

A quiet day, there is very little to add.

The Bernanke is just a few days away, looks like Mr Market is content to trade sideways until then.

*VIX closed a tough  higher, but its irrelevant noise.

More later, especially focusing on the important Transports, where important developments are starting.