Thursday 8 November 2012

Volatility strangly lower

Whilst the broader market declined by almost 1%, the VIX was red for the entire day. This is pretty unusual, and considering yesterdays index declines, it really is a strange anomaly. The VIX itself closed lower by around 3%, and rest @ 18.49.




I am really not sure what to make of the VIX action today. Is 'someone' out there meddling to keep the VIX muted? It just doesn't make any sense to see the indexes decline around 3% across 2 trading days, and the VIX is up a mere net 5%.

All things considered, VIX should be at least in the low 20s.

An index bounce?

Today's closing hour action sure doesn't suggest a bounce tomorrow, but we sure are oversold on the smaller 15/60min cycles. The VIX itself seems largely detached from the index action.

Strange times.

Closing Brief

After yesterdays major decline, most were expecting a bounce of some kind, and aside from very minor opening gains, we saw another weak market, with the sp' testing the daily 200MA area @ 1381. The one anomoly all day was the VIX, which remained red throughout.


*have removed black count, with the lower low in the closing hour.



*ALL three key warnings triggered on the daily chart.


The closing hour was pretty damn weak, certainly no sign of things levelling out yet. Sp'1345 really isn't far away now.

I remain seeking a re-short, into the next bounce, of which there 'should' be one at some point tomorrow.

As ever...bits and pieces..across the evening.

3pm update - closing hour ramp ?

Market is still lower across the board, but the VIX remains red, and is a real anomoly today. It is highly suggestive of an index wave higher into the close.



*I have added a VERY unreliable 'best guess' count (black) for a possible C' wave, which may last into early tomorrow.

At best, right now 1400 looks a stretch, but we've seen time and again, the bull maniacs could yet hit 1405/10.

That would make for a VERY good risk/reward short early tomorrow morning. things are. I'm sitting it out until early tomorrow. All cash..and full of ideas.

If we somehow fall into the close, <1380, then that sure doesn't bode well for Friday. Yet, VIX says 'no fear'

back after the close

2pm update - a tricky market

Today has been more tricky than yesterday. We saw early gains to 1401, but then..a very slow, but persistant 1381 just a little earlier. That qualifies as a test of the 200 MA, and right now, I'm still expecting a bounce - not least since the VIX has remained red through this entire fall!



Even though VIX held my trend line, I don't trust it, not least whilst the indexes were red.

VIX could easily get smacked lower by 7-10%


The only issue now, is how high is the next bounce?

As I try to remind myself...the good the patient bear. I sure won't chase this higher, not with the smaller cycles so oversold, and with a VIX red, whilst indexes are red.

As I noted earlier, don't be surprised if some stupid rumour across the news wires occurs, and we see a hyper ramp into the close.

Right now, I'd only be tempted to short if we are 1403 or higher. I'm content to sit in cash overnight, not least because we do tend to open higher - as today again showed.

back at 3pm

1pm update - bulls struggling

Market failing conclusively to hold above yesterdays lows. That opening mini-ramp to 1401 now looks a long way up. Despite the weak indexes, VIX is still red -4%, that is not a good sign for the bears. A late afternoon hyper-ramp (for no good reason) is very viable. Watch out for some stupid news-wires rumour to appear after 2pm.



The VIX hourly may have found support on a very vague rising trend line, but...considering the indexes, it might well not hold.


Hmm, it sure is a weak market, and the 1400 level is clearly going to be VERY difficult to get a daily close above.
I can't be chasing this lower, I'll wait for the next bounce...whenever that is.

Primary sp'1345 target remains my best guess, could be hit very early next week, before opex.

UPDATE 1.30pm

More weakness, and now we've just about tested the 200 day MA @ 1380.

The weekly target of 1345 is a mere 35pts away,  Viable tomorrow or Monday.

12pm update - trying to floor

Market is still battling to keep above yesterdays sp' 1388 low. VIX is -4% or so, even though the indexes are weak. That is not a good sign for the bears holding across the next few hours, in what may be a significant C' wave to 1405/10.




A tricky morning.

*Having exited @ 1392 earlier, I am again seeking a re-short later today, sp'1405/10, around 3pm or so.

I certainly wish to be short ahead of tomorrow, which might see a further major wave lower, at least to the 1380 level.

Keep in mind those bigger weekly cycles, which suggest at least a further 2-3% lower.

time for lunch !

UPDATE 12.30pm

SP' breaks the 1388 low from yesterday, but is back to holding over.
Indexes still look like they are going back to 1400, and even a nasty spike to 1405/10.

VIX is possibly a tell, very weak.

sp'15min - seeking a C wave UP.

11am update - minor wave'B ?

Mr Market fails to hold 1400, and slipped to 1390. However, this puts in a slightly higher low..and would make for a near perfect wave'B



*I exited spy puts @ 1992, a little earlier.

Seeking a full max-short, later at 1405/10..on any 'stupid bounce'.

back at 12pm

UPDATE 11.10am


VIX is toppy on the short term, I'd like to a few hours lower before re-shorting the indexes.
* I seeking to re-short @ sp'1405/10 later time... 2.30/3pm

10am update - a vain attempt to bounce

Good morning. Mr Market is still a little semi-shell shocked after yesterdays decline. It appears we're going to see some chop, with marginal upside this morning.

Those bull maniacs seeking any move back over the Tuesday peak of 1433, are going to be real disappointed into next week.





So, no gap lower today, and we're seeing a little bounce..although in the scheme of things, its extremely small.

I think key declining resistance is the hourly 10 @ 1404. I would be very surprised if we manage to hold above there for more than a few hours. By the end of today, that 10MA will be around there is some distinct problem for anyone going long at the 1400 level.

I remain short, seeking my next exit around 1380.

A long day ahead...stay sharp everyone!

back at 12pm..or earlier if anything happens.

Primary target remains SP'1345

With the SP' taking out the key cycle low of 1397, we saw a second key warning confirmed today. The bigger weekly index charts continue to warn of real trouble in the very near term, and the primary short-exit target remains sp'1345.



WTIC Oil, daily

sp'monthly, 6yr


There was so much to highlight today, but I think the above charts summarise the important aspects. We have seen our second key warning on the sp'daily chart (although other indexes have all 3 now),

WTIC Oil saw all of the Mon-Tuesday gains reversed, and we're now set to at least hit $82/80 tomorrow/Friday. That should especially add to weakness in the energy stocks.

The big monthly index charts suggest if we do get a multi-month decline, the obvious target is sp'1200/1175. That could count as a wave'1 down - assuming 1474 was the top. Yet, first things first...we need to see if the weekly cycle target of 1345 can be attained.

A good day

Today was a good trading day, and it sure makes up for what has been a very frustrating time since the QE announcement in mid September. If we can somehow drop to 1345 in the next few days, that will more than make up for what has been a pretty difficult year.

I have further wave/count index outlooks, and I will post them up, once we hit my 1345 target.

Goodnight from what remains....a bearish London city ;)

Daily Index Cycle update

The broader market suffered its biggest closing decline in around a year, losing 2.3%. The VIX - which rallied into the close, confirmed the declines to some extent, although remains under the key 20 threshold. Considering the closing hour action, it would seem there is at least one further major down wave to come, with the weekly charts suggesting sp'1345.

IWM, daily

Nasdaq Comp





All indexes are absolutely bearish in every aspect. There is seemingly VERY high likelihood of further declines tomorrow, and possibly Friday.

*I generally focus on the sp'500, and am keeping in mind the importance of the next level, of the 200day MA @ 1380. However, we're already below the 200 day on various other indexes. So, keep in mind that if you consider the state of the indexes as a whole, we've really already broken the last support.

Thus, I am going to focus on my weekly cycles, which suggest sp'1345 within days.

A little more later. There is so much to post on today, its kinda hard to know what to choose from!