Thursday 7 June 2012

VIX - volatility still slipping

Despite the latter day pullback in the indexes - with the tech and sp' slightly red, the VIX still closed lower.


VIX, daily, bullish outlook


Primary target remains 20, 18 now seems likely by the middle of next week. A brief move to 17/16 is possible if sp'1350/60 next Thur/Friday.

More later

Closing Brief - trend remains UP

A strong open gave way to declines once the Bernanke started speaking, then a secondary wave higher..and yet we still closed around the lows of the day. From a chart perspective though, its merely a bull flag that is forming.

I am looking for a move lower to around 1305/1300 tomorrow morning, levelling out, and then everything will be set for 1350/60 later next week. A simple ABC wave'2 up


Sp'60min Fib levels




Pretty clear bull flags on most of the indexes. There is nothing bearish whilst the daily chart is still showing a powerful upwards move.

Its really bizarre how almost paniced the clowns are on two main networks. One hour of declines and they are almost visibly freaking out at the thought of a red close!

If things look fine tomorrow, I might even go Long for a 2-3 day hold from 1300 to 1340s...if I can stomach it, urghh.

More later

3pm update - baby bull flag?

Well its the closing hour, market holding up very well, 1330/40s can't be far away, certainly we'll surely be there by next Mon/Tuesday.




So, the market is now a mere 800 dow pts away from the 13300 May'1st high. I'd guess another 350/400 at most..and then...down we go...riding the wave of destruction.

VIX did rally earlier as you can see, but even thats fallen away again, and looks set to close at the low of the day. VIX 18 now seems likely, maybe briefly 17/16 - with sp'1350s.

More after the close, although it seems quiet today 'out there'.

2pm update - trundling along

Not much is going on, the big hourly cycle is resetting, whilst prices hold onto most of the gains.


Anyone shorting here is a maniac. There is no hurry. Hell, even 1350/60 might not be the top, its slightly possible we'll surge to 1370/80 - where the really huge resistance is.

Regardless, daily trend is UP  UP...and UP.

12pm update - don't get lost amongst the noise

Whilst the market trundles around in the sp'1310/20s, I can again see people getting all overly focused on the intra-day noise...seemingly oblivious to the bigger picture...

sp'monthly, count'2



I guess we could slip and hold around the low 1310s until the Friday close, by that time the 60min cycle should be ready for a further up move to the 1330/40s. Right now, it looks like 1350/60 is not viable until around late next Wednesday at the earliest.

Sp'1267 to 1350 will make for one swift and strong wave'2.

Wave'3...if that's what we are going to get..will be highly entertaining.

Stay tuned.

11am update - watching the Bernanke

Whilst the market is cycling lower on the micro 15/60min cycles, the Bernanke continues to be some reasonable entertainment. There is no doubt QE3 is coming, others also recognise, it can't  happen until this market is significantly lower..sp'1100.

The notion that later this month the Fed will initiate new QE, is nonsense talk. The next date would be early August, and unless sp'1100, I can't see them doing it then either.




*the hourly 10MA of 1309 is now first line of support.

Nothing much else to add, aside from the issue that some bears will doubtless be chasing this move lower..and will get burnt in the next wave higher. There is NO reason why market will not continue higher from here.

I see a lot of people talking about an ES target of 1332 - which equates to sp'1338...I can't see any reason why we'd get stuck there either. This nasty market is going 1350/60 within 3-5 trading days.

**VIX with a reversal candle, but I'm guessing its just a tease to the bears.

10am update - the Bernanke speaketh!

The market is soaring again, and doubtless those bears still holding short will be utterly dismayed at this continued severe ramp. At least on this occasion, I'm not one of them.

The Bernanke is due to speak now...there is live coverage via the main bloomberg site, or via C-Span 

Sp'daily, closeup view



I'm going to sit back, I have tea, chocolate...and the Bernanke

   patiently waiting for sp'1350/60

Pre-Market Brief - awaiting the Bernanke

Good morning. Futures are showing very strong gains again of sp+10, so we could open around 1325 - which is a mere 25pts shy of my wave'2 target zone of sp'1350/60.

*weekly jobless claims: 377k vs 379k expected



I believe I'm right in saying that these wave'2s can be fierce in their bounces, and we're sure seeing that. Doubtless we'll start seeing talk of sp>1422 over the next few days. I've certainly seen a few analysts appear on the clown TV networks touting 1500/1650 again. Talk about contrarian indicators!

As for Fed Chairman Ben Bernanke (he speaks at 10am), I'm sure he'll just utter the same usual nonsense. He may though more openly admit that there is weakness in the wider world economy, but with the usual 'Fed will do what is necessary' mantra, and thus Mr Market may rally even further on his remarks by the close of today.

As for me, I'm sitting this out, I don't like any of this latest lunacy. I'll feel comfortable shorting this nonsense when we reach my target zone.

More across the day.

World Indexes seeing a bounce, but it won't last

The world indexes (ex USA) are up 4% so far this week.

VEU, monthly


A moderately up Monday, but a strongly bullish Tuesday across world equity markets. We're probably already almost halfway complete in this up move in terms of price.

I'm looking for a fail at the monthly 10MA - currently 41.04, that is around 5% higher.

In terms of the US indexes - if VEU does max out around 41, that would be suggestive of SP'1350/60 - which is precisely my target for wave'2.

The chart above is pretty simple in style, but I think it gives a far clearer picture of just where we are at. I am indeed looking for a break through the key 35.0 level - no later than the end of July. A break of 35 should by definition clarify the broader equity outlook for the rest of 2012, and indeed the next few years.

It is possibly the most devastatingly big warning - via a giant Head and Shoulders formation, that is out there right now. I will keep highlighting this chart in the weeks ahead.

Goodnight from London

Daily Index Cycle - bullish, short term

Equity markets saw constructive strong gains today, even the closing hour showed some renewed strength. The 5 week wave'1 is now complete, wave'2 UP has begun. The only issue is how high..and how long does it last?

IWM, daily, bearish


Sp' daily bearish 4-month



Anyone who was short at today's open should have got stopped out at the open. Despite the somewhat choppy open (which it was especially for the Rus'2000 index), markets built on gains..and kept building.

I did notice the bullish engulfing candle on IWM yesterday, but considering the smaller cycles, it was just not good enough for me to stay long - so I had bailed index longs at sp'1284 (entry was 1269) - which right now, seems a long way down!

The Count - looking ahead into end June/July

I'm looking to re-short around sp'1350/60 towards the end of next week. Its possible the market might be pleased with the Greek election is certainly some risk for anyone who is short ahead of next weekend. I'll try to keep an open mind nearer the time.

*As for me, I'm sitting it out, at least until after Bernanke tomorrow morning.

If wave'1 has completed (surely yes!), then we're in wave'2. I see strong resistance in the 1350/60 zone. I guess we could go as high as 1370/80, but I just think that's a little too high for this market to go.

If market does max out by the end of next week, I will be looking for sp'1150/00 sometime in July. That is of course a bold prediction, but hey...I'm a Permabear...and a Doomster at that ;)

A little more...later.