Friday 20 April 2012

Closing Brief can be.



Bearish.. Bearish...Bearish.

More over the weekend.

3pm - awaiting the close

How many of those bullish rats want to hold across the weekend? We are about to find out just how confident those bullish maniacs are. The 1-3pm fall was exactly what the bears needed. It arguably stops any chances of 1390/95 - a good short-stop area, and so the next target is to break yesterdays low of 1370..and then 1357.

Things look pretty good, and on many of the financial sites out there, everyone now seems to acknowledge the daily cycles are showing very clear bear flags.


I am tired, one brief note to come after the close.

2pm update - first break lower

A 3 candle top on the hourly cycle (or 5, depending on how you count it!)..and it looks like we have maxed out what might have been the 2' wave. If..and its a BIG 'if', that's the case, then we're now starting 3 lower, which should break below last weeks low of 1357.

One interesting thing to look for early next week, does the 3' wave get us down to 1340/25, if that's the case, then I'd guess we still have the near term chance of 1300..even 1270/50 via a wave'5 down. 


As noted earlier, bears really want to see a move below the 10MA, a close in the mid' 1370s right now would be more than enough. 1360s look out of range, although if it is the 3' wave, then it is possible, we're only talking about 10/12pts away.

1pm update - still waiting....

A frustrating day for the bears, but then its opex. The hourly cycle is starting to suggest a turn lower this afternoon, bears need to see a break back under that 10MA, currently 1382.


Just 3 hours left of the trading week..lets hope they are at least a little exciting!

12pm update - VIX floored?

The volatility index has so far almost entirely failed to show any significant show of fear in the market.

The important weekly cycle has come very close to breaking back below the important 10MA. If you look back at previous cycles on the weekly, you can see that it will often back-test the 10MA before it can surge/explode much higher. So the bears should not lose faith unless we close in the mid 16s.

VIX, weekly

VIX, 60min

Considering the bearish daily indexes, I hold to the first target on the VIX of 24, sometime next week (probably Wednesday).

Quick update on the 60min


*I'd only get marginally concerned if we get above 1388/90. As I noted earlier this morning, the 'serious money' should have stops on any short positions equivalent to sp'1390/95

More later!

11am update - don't get rattled

Its opex, which is usually not the best of days to trade this nonsense. Mr Market (the unconscious entity that is it) is probably just trying to shake out all those weak bears who are again terrified at seeing a sp'10pt bounce.

Its time to be reminded of the bigger perspective

SP'daily - bullish scenario

Only a move above sp'1400 would violate the bear flag, and I doubt anyone would believe we can hit 1400 today or even early next week.

Bears should look for a daily close under the 10MA of 1377, that would be enough to lead into a more significant move lower next week.

10am update - down from here

Okay so we got the opening bounce...and now we're probably levelling out before the next wave lower.

The big question the bulls need to ask themselves, considering the increasingly bad mood out there, 'who wants to hold across the weekend?'



Most important of all today, bears need to see another failure to break/hold above the 10MA (currently 1382) on the hourly. A move into the 1370s would likely confirm that, and get us back into the 1360s before the close.

So, everything looks bearish...but as noted earlier, we really need to see the VIX higher, preferably 19/20. Right now, that looks a difficult target to hit, but its Friday. If the rats all decide to bail ahead of the weekend, VIX 20 is still possible.

Time to cook....more later!

Pre-market brief -short the open

Good morning

Whilst yet more rain and thunderbolts strike a little to close to my apartment, its time to prepare to end the week well.

Futures suggest around sp+6pts.

SP'15min cycle

Considering the state of the 15min and 60min cycles, a move to 1380/83 at the open is an easy short I believe. Of course, any decent bear would have equivalent stops around sp'1390/95, depending on how lose you like to be.

I think we have a good chance at slipping down to 1365 today. Anything in the 1350s would suggest something much more 'exciting' for next week, maybe even a break into sub'1300.

From a move to 1365 later today, we could trundle sideways - forming a wave'2 (bear flag)..before Mon/Tue' when the bigger wave'3 lower should occur. We'll know when we get there!

Regardless, only a maniac would be chasing the open..and going Long right now. 

Good wishes for Friday trading.

VIX weekly - bears should be seeking 19/20

Good morning

The VIX is so far failing to indicate any trouble/fear in the market, although we are of course only 3% or so from the recent highs. The bears need to see VIX close today in a good state. At the very minimum another close over the 10MA (16.89) is essential, but preferably..19s. A Friday close of 20+ would be the perfect set up for SP'1340/1300 next week.

VIX, weekly

More throughout the day !

Something for the Bulls to sleep on

To conclude today, lets just end with the SP' monthly, which remains my favourite to highlight.

SP'monthly..(simple version)

In both recent cases where we had a red candle after a 6+ month run, the market pulled back considerably. In 2010 we saw the May-July fall - which included the infamous flash-crash. Last year, we saw a very consistent decline spanning 6 months.

The best - and most obvious 'guess' right now, assuming we are starting a new multi-month down cycle, would be the lower channel, currently 1100, and which by early autumn will be around 1125. Such a target is some 20% lower, and would make for some very nice gains for those who could actively trade it from the short-side.

Goodnight..from a rainy London