Volatility Update - VIX set for further gains

VIX had a reasonably strong day, and despite slipping lower in early afternoon, showed some strength into the close -having bounced off the hourly 10MA.

On the bigger cycles, VIX looks set to jump into the 30s within the next few weeks, and would equate to sp breaking the recent 1266 low.


vix'60min

vix, daily, rainbow

vix, weekly

Summary

We may well open slightly higher on the indexes early Tuesday. If that is the case, look for red hollow candles to appear by 10/10.30am on the VIX - a warning that any opening index gains will NOT hold.

Indeed, I am holding to my sp' target re-short zone of 1320/25.

VIX remains set to break into the 30s within a few weeks, and 40s are very viable in the latter part of July.

Closing Brief

Market closed mixed in the closing hour, VIX confirms the move lower, but VIX did close well off its highs.

Primary trend remains down.


iwm'60min

dow'60min

sp'60min

Summary

I have chosen to wait to re-short until tomorrow. I have strong suspicion we can still get into the sp'1320/25 target zone at the Tuesday open. So..it will be a case of looking for hollow red reversal candles on the VIX, and black candles on the indexes.

Much more later in the evening....

3pm update - waiting

Mr Market battling it out....its getting messy in the near term...but the bigger picture targets remain clear.


sp'15min

sp'60min

Summary

..still waiting to re-short. sp'1317/20 ..looks 'best' guess right now..although they could easily just close it at the low of day.

I will not chase it lower..if we do fall into the close.
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UPDATE 3.31pm ..sp'1315,,,,,still waiting.

3.43pm - going to WAIT until tomorrow.  VERY bearish for Wednesday.

2pm update - the bounce underway

Market appears to have floored around sp'1309. Mini-ramp/bounce appears underway..target zone 1320/25.

From the daily cycle perspective..things are VERY much clearer.


sp' daily, 4mth

sp'60min

sp' 15min

Summary

Standing by to re-short 1320/25 (probably)..no later than 3.45pm. It all depends on when the price zone is hit.

The hourly 10MA (and falling fast) at sp'1322 will be very strong resistance in the closing two hours.

1pm update - let them spike it

Those bull maniacs are laughably even more bullish now than they were last night - when some were touting sp>1363. After this mornings drop, they are still seeing 'bargain prices'.

Those 'bargains' will be somewhat cheaper by end July.


sp'15min

vix'15min

Summary

The tiny 15min cycles are very much looking like a little ramp is due imminently..

I will re-short,...probably around 2.30pm, which I've come to recognise as a somewhat 'magical' time in market land.  A re-short around sp'1320/25 would be very acceptable.

Stay tuned. 

12pm update - dumb bulls

The bigger cycles continue to warn of downside as far as sp'1225 by this Friday.

Mere hours ago, I'm reading endless 'wave5' complete chatter. A further 15pts lower on the sp'500, and I'm still reading the same nonsense talk. Those bull maniacs just don't want to look at the bigger picture charts.

Those insane bull maniacs need to stare at the following chart for a good three hours...


sp' daily9c

sp'15min

Summary

I exited earlier as noted, I merely now look for a re-short later today. Always hard to guess at what price level that might be, but the cycle will inexorably rise..as it already is..even though prices are still near their lows.

yours... merely waiting to short the next spike/bounce

11am update - awaiting a bounce (again)

Well, we've seen a pretty good morning sell off. VIX had a nice spike..and we are probably going to see some kind of bounce across the next few hours. 'Probably' being the key word.


sp'15min

sp'60min

Summary

I decided to get intentionally stopped out at sp'1315 or so. That made for a valid exit, a good trade to start the week.

I will look to re-short via the 15min cycle later today, probably after 2pm at least. Considering the daily cycle, I will look to hold short overnight - even though there is moderate risk of opening gap higher..

Primary trend IS down.

10am update - on track

Good morning to those just waking up. The bear flag from last Friday has been confirmed.


sp'15min

sp'60min

Vix'60min

Summary

For those of you who have read my weekend postings, you know my broader outlook..and today is merely a small move in the overall down cycle.

VIX is showing a nice gain..breaking last Thursdays high.

Anyone going long this week is a maniac.

*I remain short, but will probably exit at the base of the next 15min cycle, that could easily be by 11am.

I will short EVERY intra-day spike/bounce.

More later.

Pre-Market Brief - its bear weather!

Good morning. The skies are somewhat grey over London city...that's good bear weather. Futures are showing sp-13pts, so that would open us around 1322 - a new low, since the 1363 wave'2 peak.

First target for today and tomorrow is 1305/00, possibly 1290s. As noted last Friday, if the market gets spooked by 'EU concerns' or underlying lousy economic data, then a swift move to 1225 is viable. That would give everyone a good scare ;)

*10am econ-data - new homes sales.


sp'15min

sp'60min

Summary

The 15min cycle could easily fall until 12/1pm. From a MACD (blue bar histogram) cycle perspective, the hourly cycle is pretty low, but..the price chart is obvious...  bear flag...and this mornings futures confirm the flag.

Downside target of 1305/00 might be hit later today. if not..then tomorrow.

My trading plan. Default trade remains short until sp'1150/00. I might exit later this morning if we are down near 1315/10..and then re-short a few hours later. You know this market likes its mini intra-day ramps!

Good wishes for the week ahead....updates...across the day...

A scary chart for Sunday night

With one hour of the futures now elapsed, sp is set to open 2pts lower. So far then..its all mere 'noise'. If futures are -5 or more, that just about breaks below the bear flag on some of the indexes. 10pts would make it for sure.

I've read around the finance sphere quite a bit this weekend, watched a few dozen videos, and the consensus is we're going down. Even some of the more conservative writers I follow are seemingly content to note down late summer targets in the low sp'1100s. Does that sort of consensus conversely mean we're going to somehow gap up dow+100 in the morning on 'LTRO'3 hopes'?

To end the weekend, and set up the week ahead, the following is a new 'doomster' chart to consider.


sp' daily, 1yr, 'doomster' outlook

There are a few key issues to note in the mid-term.

1. We need to break 1266...if that can be taken out quickly (no more than 2 trading weeks), then we should have a good shot at 1225. We'll doubtless get some kind of bounce..before the first major attempt to hit the rising floor in the low sp'1100s (pink line, see monthly chart below)

2. Whether or not we break below 1100 this summer in the first attempt, I don't think that is too important.

3.  A break of sp'1000...will confirm the greater theory that the entire post March'2009 lows was nothing less than a giant H/S formation - as seen even more clearly on the VEU charts I now regularly publish.
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Of course, the Bernanke will be out there later this August, and he could easily wreck any outlook..so bears will need to be mindful in late July/August.


Summary

Primary target for this summer remains sp'1150/00 - as derived by the monthly chart.

It will be a busy week ahead, and unlike last week....the bears can proceed without any fear of the FOMC/Bernanke.

Goodnight from London...and good wishes for your trading week ahead.