Volatility slightly higher

With the indexes opening moderately higher, the VIX actually busted below - and confirmed, a bear flag on the hourly cycle. Yet, the index gains never lasted, and the bears again took control of the market. VIX managed to battle back, and closed 3.5% higher @ 16.14

Considering it is October, VIX in the 16s remains a truly remarkable low number.


VIX'60min

VIX'daily

VIX'weekly

Summary

VIX managed moderate gains, but remains in the lowly 16s. The hourly chart offers potential for a significant opening gap up of 15/20% on Monday. The bears could start the week in top form.

The daily cycle is still very muted, although the current trend is certainly to the upside.

The huge weekly VIX cycle continues to offer very large upside, first target would be the upper bollinger of 22/23 - which could be hit at any point in the immediate term.

The VIX will doubtless explode at some point, but clearly, there is no sign of that happening right now. The potential is there, but..there is just not the momentum..yet.

More later.

Closing Brief

A moderately lower close for some of the indexes. The slightly higher VIX confirms the continuing down trend.


IWM

Dow

SP

Summary

Hmm, well, another week complete. Certainly, a week where the bears started to show initial signs of a bigger trend change.

Lots to say..but I'll save that for another time.

I hold short across the weekend, seeking an exit of sp'1410/00 next Mon/Tuesday

Have a good weekend!

More later in the evening..and a weekend posting late on Saturday

3pm update - bears need to hold a red close

An interesting week overall, with just one hour to go. We remain on the threshold of closing below key weekly index rising support levels.

VIX is a little higher, but showing zero concern. Mr Market is still in the mindset of 'nothing to worry about'.


sp'60min

sp'daily5

Summary

So, lets see if the bears can at least close today moderately lower on all the main indexes, with a slightly higher VIX too.

A close <1424 now seems unlikely, the 50day MA of 1428 would be useful to close under.

I will hold short across into next Monday, perhaps it might even be a Cinderella 'Sunday night surprise', downside target would be the recent key cycle low of 1397.



More after the close.

2pm update - bears clawing lower

The week is ending potentially very badly for the bulls. We are very close to breaking - if not already, key rising weekly support on a number of the indexes. The bears need a weekly close on the sp <1425. That is a mere 2pts away, and seems very viable.

VIX is very slowly starting to claw higher, but so far..nothing dramatic.


sp'60min

sp'daily5

VIX, daily

Summary

So its going okay still, a close <1420 would be a bonus.

Earlier this week I was hoping to exit today, but considering the current trend, and a few other things, I will hold short across the weekend.

Seeking an exit around 1410/00 next Monday, with VIX 18/19.

back at 3pm

12pm update - bears making progress

After the mini opening ramp, the market is slipping lower, and there appears to be a little impulsiveness to it. We have our first break below the 50 day MA on the sp @ 1427.

Doomer bears should seek a Friday close <sp'1424. If that is achieved, it strongly suggests a test of the 1397 cycle low next Mon/Tuesday.


sp'60min

sp'daily5

VIX'60min

Summary

Its going kinda okay so far. Underlying weakness continues to be seen.

The VIX hourly cycle is primed for a move higher into Monday, target would be somewhere around 18/19. That would equate to a test of sp'1397.

Time for lunch

10am update - quiet end to the week?

The main indexes are opening broadly flat. The hourly charts do have potential for a down day, but we need to see the sp' take out the 1430 level.

As usual, the VIX appears entirely mute, and is a little lower.


sp'60min

sp'daily5

Summary

Primary target remains a close below the 50 day MA <1427. There are other soft support 'issues' around 1425.

Doomer bears should seek a close <1424, we're only talking 8pts here, so its not exactly asking a lot today.

Lets see how Mr Market copes today. The daily trend is still downward, and the weekly trends are ALL rolling over, so the underlying pressure is down.

The question has to be asked, who wants to hold long across a weekend in October?

back at 12pm

Bears need a weekly close under sp'1425

Thursday was a real mess of a trading day. However the closing daily candles are showing a failed rally, and there is probably at least a little more downside to come in the current 4 day down cycle.

The bigger picture weekly chart shows weakening positive momentum, and a rollover is in progress. The sp'1425 level will indeed be very important for the bears to break through tomorrow.


sp'weekly, 2yr

Summary

It really is pretty clear, a weekly close <1425 should be enough to confirm 'trouble this Autumn'.

There are plenty of strong trend/support levels for the bulls.  The Oct'2011>June'2012 low is currently around 1370, and that will be exceptionally difficult for the bears to break under in the weeks ahead.

My best guess, the indexes floor somewhere between 1425/00 tomorrow/Monday, and then a rally into opex, maybe as high as the 1460s. Then a critical lower high should be sought. If we can then rollover, the bears will have their first real chance at pushing lower...much lower (the natural multi-month target remains sp'1200 by late November).

Today was pretty troubling at times, had we closed >1440, I'd probably be on radio-silent. ;) The close of 1432 was certainly a relief.

Goodnight from London

Daily Index Cycle update

A real mini roller coaster of a day. The indexes opened higher on jobs data, but the gains only lasted until lunch time. The bears seized control in the afternoon and the main indexes closed broadly flat.

Yet the VIX still closed 4% lower, and is not supporting what remains a broad 4 day down cycle.


IWM

Dow

Sp'daily5

Trans

Summary

First, we have a black doom candle for the Rus'2000 (see IWM) small cap. Thats a very clear warning that the rally failed, and is suggestive of a red Friday.

The other indexes are largely the same, flat/fractional declines. Yet, those are some pretty impressive spikes on the daily candle, a good sign of weakness, and that traders were selling into strength.


A close under the 50 day MA ?

Doomer bears should be seeking a Friday close where the sp' closes under the 50 MA @ 1427. If that is the case tomorrow, I will very likely hold across the weekend, with a revised exit target of 1410/00 for Monday.

A key thing to watch tomorrow will be the VIX, bears must see a VIX in the 16s at least, preferably 17.25/50.

*the weekly index cycles ARE rolling over, so..there is some underlying pressure to the downside.

A little more later