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.

3pm update - more nothing

A market in slow motion, with near zero volume. Clearly, the algo-bots remain in full control, and unless some sellside volume appears, a further multi-week round of meltup is a'coming.


sp'daily5

Summary

Lets see if the bots want to sell in front of more econ-data due tomorrow morning.

*more after the close, with a very important update on the Transports.

2pm update - micro-chop

Another day of almost nothing. Despite the lowest consumer confidence number in 8 months, the market is still able to hold broadly steady. Only the transports is again showing some weakness, although even that is off the lows.


sp'daily5

Summary

The 1380 target by this Friday is starting to look like a real stretch. The MACD cycle is still slowly cruising lower, but there just isn't any selling.

With VIX a touch red, there really isn't anything going on.

*ohh, and AMZN +$2 to $246 ? It should be $100 under ANY circumstance right now, incredible.

12pm update - mixed...awaiting direction

Its turned into a bit of a mess. What should have been some reasonable declines have again been derailed with renewed talk of ECB meddling.

VIX is weak, it remains an utterly fearless market.


sp'daily5

vix'daily

Summary

With so little sellside volume, it seems near impossible to even get dow -50pts for more than a few minutes. It still looks reasonable to hit 1380 by Friday morning, but if thats the case, the smaller cycles will be so oversold, we'd surely get a very strong snap higher.

Rarely easy, and until we get to mid-September, it is indeed a bit of a mess.

10am update - looking for declines

Good morning. There should in theory be some declines as the day progresses. Both the hourly and daily cycle are very much primed.

Yet, as I type, market appears to be rallying on some nonsense EU rumour of 'bond rate caps'


sp'60min

sp'daily5

Summary

Those bears seeking a hit of 1380 by Friday morning, should looking for a close today of dow -75/125 with VIX' 17.5. Considering the lack of action lately, that is something of a bold target.

So, lets see if we can break the recent low of 1398, and get a close in the 1390s.

The news that Draghi won't be @ the hole this weekend, it certainly removes on major concern I had about anyone wanting to be short across the long 3 day weekend. As it is, I'd still prefer to close out any short positions around 1380...before the Bernanke speaks.

--
*next update 12pm

A close under the monthly 10MA ?

It was a quiet day in market land, so lets end today with something simple...


sp, monthly, rainbow

Summary

The primary trend remains outright bullish.

The remaining doomers out there clearly need a close under the 10MA - currently 1345. However, they sure are not going to get remotely close to that, even if the Bernanke announced this Friday 'no more QE...I'm done with it'.

Best bear outlook for this Friday is a close somewhere in the low 1380s, but even that is something of a distant hope right now.

So, it seems clear, we'll start September still in a broadly bullish trend. All the doomer chat of 'autumnal doom' is currently to be dismissed, until we start putting in some lower highs and lower lows - as seen on the daily index cycle charts.

Tuesday should be at least a little more dynamic than today.

Goodnight from London