Monday 26 November 2012

Volatility a touch higher

With the main indexes mildly rallying into the close - but closing 'mixed', the VIX slipped in the closing hour, climbing a mere 2.4%, to rest @ 15.50


VIX' daily


There isn't much to be said on the VIX. It remains at a bizarrely low level - and is vulnerable at any time, to a giant gap higher, if there is any surprise 'comment', rumour, or whatever, that the fiscal cliff will not be largely delayed.

So, near term volatility remains cheap, but yes...further out, its actually kinda expensive - as some good articles have highlighted
More later..on the indexes.

Closing Brief

The main indexes closed somewhat mixed. The Rus'2000 small cap, transports, and the Nasdaq Comp closed moderately higher, whilst the Sp and Dow closed moderately lower. The daily trends remain to the upside, and primary target of sp'1425 is only 1.5% away.





A somewhat quiet Monday, there really isn't anything out there to push the market significantly in any one direction.

So, with the default immediate trend (since the sp'1343 low), we're still likely to battle upwards a little more.

Primary target remains sp'1425, best late Wed/early Thursday, with a strong reversal ensuing.

bits and pieces across the evening.

3pm update - redistribution for beginners

Mr Market is seemingly content to trade sideways into the close. Tuesday morning could open lower, but again, the daily trend remains to the upside. Dollar is fractionally higher, VIX is +4% - but that's the usual static. With AAPL..and other hysteria stocks like FB on the rise, these are not bearish trading conditions.



Not much to say really, its kinda quiet.

Why not watch the following instead... you might never see a better example of what happens when two monsters adopt Keynesian economic policy.

*special note, you must watch until the very end, or you won't see the important final result!

back after the close :) , I think I need some more milk in my tea.

UPDATE 3.30pm

We're melting higher so far this closing hour.

A close around 1406/08 seems viable, almost flat, with the tech' sector (helped by AAPL/FB) already green.

Transports is similarly green, and there is a likely further significant up day yet to come.

2pm update - chop into Tuesday

Its turning rather muted in the worlds greatest and most rigged casino. There is really nothing to motivate the market until Tuesday breakfast..when we have the Bernanke for Breakfast, along with Durable Goods Orders.




Ignoring the intra-day nonsense for this hour, the daily charts are still broadly heading higher. There is no underlying turn lower, and in fact, we don't even have the first sign of a levelling out phase.

The good patient bears should probably still be waiting amongst the trees.

There is simply no real power to the downside. A dow 100pt fall is nothing to get excited over, its not even 1% ! The fact AAPL is +$16 sure doesn't look good for those currently short.

back at 3pm

1pm update - afternoon chop (probably)

Mr Market is holding together very well. The early pullback seen this morning may already be complete, and if that's the case, the bears are going to be real moody as we grind higher into midweek. Dollar is weak, VIX looks maxed out, and AAPL is +$17. This is not a bearish the least.




I've tightened up the channels on the hourly charts, so that should help for later this week.

Its difficult to call how we'll close, we could yet close at the lows of the day in the mid 1390s, or even close green. Its too hard for anyone to guess really.

What is clear, the daily cycle is still ticking higher, and last weeks weekly candle suggest 1425 is almost guaranteed.

I remain resolute...seeking sp'1425, with a major reversal, this Wed/Thursday.

12pm update - dip buyers appearing

Mr Market is seeing bargain buyers starting to appear. We're already back above sp'1400, and those bears shorting across this morning face a possible whipsaw mini-ramp higher into the afternoon.




One thing to keep in mind is the MACD (blue bar histogram) on the daily chart. We're still ticking higher , and that's why I'm still seeking sp'1425 later in the week.

Its hard to fathom, or 'guess' the smaller little waves. There is often some sense to them, but its just too annoying most of the time to trade them.

I'll get involved later this week, for now...lets see how high the maniacs can kick this higher.

It won't be easy though, the hourly cycle is set to go negative cycle in the next 1-2 trading hours.

FB continues to ramp..almost 8% higher, nothing less than crazy.

Bears have to ask themselves, with AAPL +$10, its not looking so good after all, is it?

11am update - transports maxed out?

The transports on the hourly cycle continues to display much more cleaner waves. It would be suggestive of weakness into early Tuesday for the broader market - sp1385/83 would be the natural target for a B' wave, or however you might like to count it.




You can see the more consistent tranny, which is now putting in some divergence on the MACD with the secondary lower tower.

Sp'15min cycle is pretty low, we could easily claw higher into lunchtime from here, and that's the risk with any re-shorts this morning.

For the moment, I'm just watching. Lets see where we are by early afternoon.

* we have Durable goods orders in Tuesday pre-market. Although the Bernanke speaks tomorrow breakfast. Would be a tricky time for anyone holding overnight Monday.

10am update - another week begins

The market is open, and we're lurking around sp'1402. Certainly this move is nothing too significant, and is arguably a dip buying zone for those maniacs looking for a Santa rally into year end. The VIX is 3% higher, but that is usual..mere noise.




There really isn't much to say right now, its just a minor opening move.

There should be rising support at the hourly 10MA @ 1398. If that fails ,there is the daily 10MA - which will be around 1383/85 tomorrow - where the 200day MA is also lurking.

I'm sitting back, point getting involved yet.

UPDATE 10.20am
Stupid stock move of the day so far...

FB, 7% or so

Fair value remains $4, but it has to be said from a chart perspective, its broken through a key gap level, that goes almost all the way back to the IPO. Understandably, some of the bull rats are now looking for $30 in the next few weeks.

back at 12pm

Pre-Market Brief

Good morning. We have a full trading week ahead, with lots of econ-data, a little Bernanke, and a likely sprinkling of rumours - not least about the fiscal cliff. Futures are sp -7pts, we're set to open around sp'1402/00.




So, we're set to open somewhat lower, but its nothing significant, and anyone chasing it lower this morning is likely to get burnt within a day, if not hours.

There are plenty of things that the clown network TV might get hysterical in the early part of this week. We have 'cyber Monday' (online retail sales), the Bernanke speaks over Tuesday breakfast, and the Fed 'beige book' on Wednesday afternoon.

I suppose we could pull back, and be on the slide into Tuesday morning, maybe even a re-test of the 200 day MA @ 1383. Regardless, last weeks action is very suggestive we'll rally at least another 1% or so, which would get us to my primary target.

My best guess...we hit sp'1425 this Thursday, and then see a sharp intra-day reversal.

I am content to wait until 1425 later this week, before I start hitting buttons.

Good wishes for the trading week ahead!