Wednesday 8 August 2012

Volatility..whacked lower in the closing hour

Whilst the indexes closed broadly unchanged, the VIX was weak all day, and suffered a further little whack lower in the closing hour, back into the low 15s.


VIX, daily


No sign of a turn, or even levelling out yet.

For the bears, this remains a real problem.

First upside target would be a close in the mid 18s.
Secondary target, a break over the recent high of 21.

Right now, 21 feels like a big task.

Closing Brief

A very quiet Tuesday, very little to note on this day.

The closing hourly index cycles...





Dull. It all makes for what might be a top, at least on a 1-2 week basis, but there is NO definitive turn yet.

A little more later..but really, there isn't much to update.

3pm update - closing hour weakness

The smaller cycles offer the potential to allow a close below the morning low of 1394. VIX remains marginally lower.



Can we close 1393 or lower by the close? Hmm, it sure won't be easy, there just seems a total lack of momentum in either direction today.

I do argue there is slightly more chance of a red close than a green one, even though the daily cycle is still pushing higher.

More after the close...on what remains a very quiet day.

2pm update - bears need...just a little more patience

The daily cycle is certainly not even levelling out yet, but there are a few signs we're at the exhausted stage. As noted last night though, it remains a very serious problem with the sp' monthly cycle currently outright bullish.

sp'60min, rainbow



VIX remains weak, -2.5%. A market of no fear..remarkable, but then...70-90% of it is comprised of those emotionless algo-bots.

It remains clear, until we see a break into the 1340s - putting in a lower low, the primary trend will remain UP.

More in the next hour ;)

A little music for this sleepy 2pm hour...

1pm update - time for another tiny wave lower?

A little rollover on the tiny 15min cycle, maybe we can close at the low of the day?

sp'15min, rainbow


It remains a pretty dull day, VIX is -2%, not exactly bearish!

Lets see if we can take out the morning low of 1396

Time for lunch...

12pm update - yet another micro bounce

Well, we've traversed from sp-5 to +3 this morning. Those shorting the opening gap will be somewhat annoyed already.

The ultimate level remains 1422. If that is broken, it will entirely negate everything that started in late April.



Very quiet trading conditions, unless we get some news, this lack of action could last into next week. Urghh!

11am update - its all noise..within a wedge

So far, it really is just micro-moves up and down.

sp'60min, rainbow


VIX is barely up 1%, that is not exactly inspiring right now.

You can see that <1350 would really be an important start in any initial move lower. As it is, that looks doubtful until middle of next week at the earliest.

10am update - bears need a lower low

Since the June low of sp'1266, the market has been putting in higher highs..and higher lows.

The first basic thing the bears need to see in the coming daysand, the first lower low. A break under 1350 is essential just to offer any definitive trend change.




Clearly, we're not going to be below 1350 any time soon. Even if can trundle for a few days now, it's probably going to be next week until we have a chance of breaking into the 1340s.

*FB is lower again....I'm not entirely surprised...19s by the close seem likely.

Pre-Market Brief

Good morning. Futures are sp-6pts, we're set to open around 1395. Its almost a little odd to see the market futures red, seems so long !




I'm still not expecting anything significant today. Bears can not justifiably get proper bearish until we are back into the 1340s..which are obviously a fair way lower from current levels.

Look to the VIX. a close +7% or so..and then maybe...things might develop further by the end of the week.

More across the day.

SP'500 primary trend is UP

As a Permabear Doomster, an up trend still has to be recognised as such, and we certainly do currently remain in a broad up trend - even if the daily cycle would suggest its a narrowing wedge, with an eventual target of a break to the downside.

Sp, monthly, rainbow (Elder Impulse)


Its notable that even the June move down to 1266 did not turn the monthly candle red. Indeed, we've not seen a decent red candle since last September.

Yes, the broad formation is still arguably a giant Head and Shoulders formation (as I have been touting since the initial April rollover), but whilst the month on month trend IS upward, anyone currently short is clearly 'fighting the trend' still.

As noted on the daily charts, bears need a break <1350 just to begin 'something', and right now even that level is a long way down! A VIX break over 21 would also be a key necessary component to any major change in trend.

Goodnight from London