Monday 22 October 2012

Volatility slumps into the close

With the indexes staging a closing hour rally to close largely flat, the VIX saw earlier gains of 5% vapourise, and closed 2.6% lower @ 16.62. Clearly, the close was a very disappointing one for those on the bearish side of the market.




A very disappointing close for the bears. The VIX teasingly almost broke into the 18s in the early afternoon, but with the indexes rallying back to evens, the VIX closed badly. The red close was indeed a bad one, and does not bode well for Tuesday.

Next soft support is around 16.25/00, which looks likely early Tuesday.

It will be absolutely vital that the VIX closes above 16 tomorrow, and preferably even moderately green, otherwise the near term trend is going to shift back to the bulls.

More later

Closing Brief

The market managed to close flat, aside from the Nasdaq (+0.5), due to a 4% ramp in AAPL. The VIX closed particularly weak, following earlier gains of 5%




A disappointing closing hour for the bears. We saw one of those nasty closing hour ramps, where just about every day-trader -and many of the swing (multi-day) trading bears will have got stopped out.

Lots to say, but that's for later. Its time for tea.

3pm update - closing hour weakness?

Mr Market is still weak, and despite a number of micro-ramps, we're still set to close moderately red on the main indexes. Next downside target is the recent cycle low of sp'1397



A good start to the week so far, although the VIX is lagging a little.

Bears should seek a close <1425, with VIX +5%

Anything <1420 should be considered a bonus

back after the close :)

2pm update - underlying weakness

The market is showing its underlying weakness, and we're slipping away very nicely now. The Nasdaq Comp' has lost the big 3000 level, weekly charts suggest a move to at least 2875 or so - which would equate to sp'1400.



Looking on track for a test of the sp'1397 low in the next day or so.

VIX +5%...slowly picking up a little.

back at 3pm

12pm update - morning weakness

A choppy morning, with some distinct underlying weakness showing through again. The bulls are trying to break back over the (now declining) daily 10MA of 1441, I don't think they can do it.



VIX, daily


Despite the recent hour declines to sp'1427, its still a bit boring so far today.

The weekly index cycles are all going negative MACD cycle..and it bodes for a move to 1400, if not 1375..this week. There is a very small possibility of a decline to 1325/00 within the next 3-6 trading days, with the emphasis on 'small'. That door won't be open unless sp'1397 low is taken out.

VIX remains a touch green, but so far..its all minor noise.

Bears need at least a flat close (a doji in a downtrend is acceptable), with VIX holding flat.

Lets keep in mind that so far..this is only day'2 of the down trend*

*last Thursday did close lower, but we still put in another high, and so I count from the first day with a lower high.

back at 2pm

10am update - morning chop

Good morning, and welcome to another week at the world's greatest casino. The market is opening mostly flat, looks like we could be choppy most of the morning.

The VIX is a touch higher, but whilst it remains under 20, its really unreliable.





The choppy opening is a real mix. Some stocks are getting a good ramp...BTU, AAPL, but there is some moderate weakness in a lot of other places.

Those bull maniacs seeking for a major move higher this week are likely to be very disappointed.

The weekly cycles - are all going negative MACD cycle, a very bearish start to a trading week.

A long day ahead, seeking general weakness, first target remains a break <1427...which will open up the recent cycle low of 1397.

So, bears should target a daily close <1427, with VIX at least 3-5% higher in the upper 17s.

back at 12pm