Monday 1 October 2012

The VIX held up very well

Considering the early morning index gains the VIX only went briefly red. With the latter day index rollover, the VIX managed moderate closing gains of




So the VIX managed a green close. The hourly cycle is possibly already maxed out though, which is a real problem for the bears on Tuesday. The daily cycle though probably allows a few more days of upside.

Primary remains 18/19, it seems unlikely we can hit the big 20 any time soon. Could be weeks...if not months.

Closing Brief

A weak closing hour, and a real turn around from the opening 90 minutes of the trading day. With the VIX closing moderately green, the bulls should feel a little cautious into Tuesday.


SP'60min, H/S



Certainly, still some useful gains for the bulls, but the afternoon weakness may well lead into Tuesday.

From a MACD cycle perspective, there is certainly good potencial for a opening gap lower Tuesday, or at least some form of trend down day.

More later

3pm update - closing hour weakness

Hmm, its not an easy one to call, but considering the big spike on the daily candle so far, I'm inclined to further weakness in the closing hour.

The VIX remains up 2%, despite the rally.

sp'60min - H/S formation


Well, lets see if the bears can muster a sell off. A close <1445 would be a bonus.

More after the close.

2pm update - intra-day pullback..or keep falling?

We're hovering on the hourly 10MA of sp'1445. The bulls merely need a close over this, that would suffice for a Monday. The bears will be clamouring for a largely flat close around 1440. That would make for a very bearish candle to start the week, and suggest good opportunity that 1420/00 is viable later this week.

VIX is continuing to show underlying strength.

sp'60min - H/S formation



How we close today will certainly be important. The rest of this week will be consumed with how the jobs data turns out. Unlike ALL previous months, the bulls no longer how the 'ohh..bad news means QE3 coming'. No, those days are over.

Bad jobs ...bad news.

I remain short, at least with the failure to break the descending upper trend line, all is not lost..yet.

back at 3pm

1pm update - maxed out?

Mr Market is looking like its already tired. With 3 hours to go, could we yet close red?

sp'60min - H/S


A little weakness, but until we're under 1445, I sure won't be pleased with how today went.

The target from what is a giant H/S would be either 1420 - as originally noted for over 2 weeks now, or...a more stern 1400.

Regardless, I will hold short into tomorrow, and see where we are then.

back at 2'

12pm update - lousy start to Q4

With the ISM manufacturing data coming in much higher than the all knowing forecasters predicted, the market is indeed up, and we're holding to most of the gains so far.

Considering the size of the gains, its notable that the VIX is unchanged.

sp'60min -H/S


So, we've hit the upper descending trend.

If we close >1460, then the bulls will surely break a new high across the next 3-5 trading days.

Bears desperately need the gains to all vaporise by the close. That seems pretty unlikely. The only thing the bears have going for them right now is the flat VIX.

I remain short, still seeking 1420.

back at 2pm

11am update - spiky, but close to a breakout

The opening market rally is largely holding, but its starting to look a bit spiky on the hourly cycle.

Bulls could do with a break over 1460, but clearly, the bears are in real trouble again. Baring a strong reversal with a red close, this is not looking so great. We're a mere 20pts from the 1474 QE3 top !

sp'60min - H/S outlook


Bears need a close <1440,
Bulls merely need to hold 'some' of the gains.

*VIX is flat..which considering the index gains, is a little surprising.

back at 12'

10am update - rough start to the week

Good morning. Those overnight moderate declines sure did not hold, and we're up around 0.6% or so on the main indexes. Sp' is close to re-taking the key 1450 level, and a move over 1455 would largely wreck the H/S idea.

VIX opened 3% higher, but is now back to flat.

*Awaiting key ISM data at 10am




So, is that it for the bears this week? Another wave higher? Err, I'm still going to guess.. no, but I don't think we can move much below 1420, before another week or two higher.

As has been the case since June, bulls need to hold above the recent low of 1397, and merely seek another higher hgh >1474.

stay tuned!