Volatility makes the key turn?

Whilst the indexes closed broadly flat, the VIX managed to hold onto moderate gains across the day, closing 5.4% higher to settle @ 15.87


VIX'60min

VIX'daily

VIX'weekly

Summary

If I'm right about the indexes, then the VIX should show some follow through to the upside early next week.

First target is 17/18, and then once again, it'll be yet another attempt to break 20, which we've not seen since late July.

Indeed, a key sign of 'index trouble' will be if we see VIX break into the 20s. That is absolutely something that will be necessary to see, if the indexes are going to break below the recent sp'1343 low.

More later.

Closing Brief

A choppy day to end a V-shaped trading month, where we saw the indexes cycle from the 1430s to 1343, and back into the high 1410s. Frankly, its gone almost exactly as I had expected. What will be more 'interesting' is whether I'm also right about what comes next.


Dow'60min

Sp

Trans

Summary

*It would seem - according to clown network, there was a 3.5bn Morgan Stanley buy order, hence the closing hour ramp.
--

Well, that's November trading complete.

A slightly disappointing end to the day, with the transports failing to break the lower channel.

However, despite the mini-ramp, NONE of the indexes broke above yesterday mornings peak, so..the overall outlook remains on track.

--
*the usual daily bits and pieces across the evening.
There will be a weekend posting, late Saturday, probably on the Monthly US index charts.

Have a good weekend

3pm update - last trading hour of the month

In chartists land, this is the most important hour of the trading month. Will the monthly charts continue to flag provisional warning signs of trouble? So far, it looks like they just about will.


sp'60min

trans'60min

Summary

We have a nice bearish candle on the tranny this hour...its all setting up very nicely.

Seeking closing hour weakness.

A close <1410 would be a real bonus.

VIX holding to moderate 6% gains.
--

UPDATE 3.20pm, tranny bouncing off the lower channel. Hmm. I'd still really want to see a close <5100

2pm update - micro-rallies being sold into

Mr Market is still showing a little residual strength from the wave'2 bounce, yet..every micro-rally is being sold into..it would appear. Certainly, the weakness is very minor, but it is important, and today would make for a very nice turn day. Monday would be important to see confirmation, preferably <sp'1400.


sp'60min

trans'60min

Summary

Its somewhat quiet out there, but the weakness is there, and I'd not be surprised to see a break <1410 before the close. Two hours is plenty of time to see that develop.
--

*Metals are weak...just look at gold on the weekly chart, a clear bear flag...to be shorted into... obvious target is GLD 158, some $80 lower

The Gold bugs are gonna be real mad next week.

UPDATE 2.30pm . Transports showing what might be a micro-wave'2 bear flag on the hourly.

If it is, should be seeking a re-break <5100, quite possibly before the close of today.

1pm update - selling into the weekend?

Still three hours left of the trading month, and I hold to the original outlook that on balance, we'll see some of the bull manaics get twitchy...and sell into the weekend. After all, just who exactly wants to be buying long into next week?

It is notable that many of the daily index charts are now showing clear signs of levelling out, but it'll take until middle of next week to see a conclusive rollover.

*Boehner speaks...and none of his words are pleasing the algo-bots. Selling resumes.


sp'60min

dow'60min

Summary

I've highlighted two key levels on the above hourly charts.

Bears next week should be seeking breaks below sp'1385, and dow'12750 (approx).
--

VIX is holding onto the moderate 6% gains.
-

12pm update - weakness..as expected

We're seeing some fairly broad weakness so far today. Even the VIX is showing some strength. A close <sp'1410 would be useful for the bears.


sp'daily5

vix;daily

Summary

Everything is looking on track.

*The VIX daily cycle is due to + MACD cycle next Tue/Wed, so bears should be looking for the first big down move in the indexes (below sp'1385 ?) around then.

The following chart will be important for the next down cycle...

Most important of all, a break under the recent sp'1343 low will be the last warning the bull maniacs get.
-

11am update - eyes on the transports

The old leader - the transports is still leading, and warning of trouble. A break <5080 would be a key break of near term up trend, and open up 5000 by late early Monday. VIX is starting to show some power.


trans'60min

VIX'60min

Summary

We are seeing a little weakness, and despite the attempt at breaking new highs, the market has failed.

VIX is on the move, although I'd have to see a 10% move to consider is anything than 'noise'
-

So, I will keep my eyes on the old leader, a break <5080 would be significant, and would suggest the sp' will be  trading <1400 'soon'.
 --

UPDATE 11.25am We're seeing good weakness in the old leader. The first warning might be triggered within next hour or two.

10am update - morning weakness

Well, we're off and running for the last day of the month. Minor opening chop, and there is the smell of weakness in the air. A move <1409 would be quite interesting, and open the door to sub 1400s.

*Chicago PMI: 50.4, not in recessionary territory, but its still 'weak'.


sp'60min

sp'daily5

Summary

I still argue the bears merely need today to close flat. That would be an acceptable set up for early December.

A close <1405 would be a real bonus though.

*Look at the daily MACD (blue bar histogram) cycle, we're VERY close to rolling over, and after 9 days UP - since the 1343 low, we're due down cycle - one that will exceed the recent spike-low of 1385.
--

A long day ahead, lets see how many of the bull maniacs decide to jump ship ahead of the weekend.

UPDATE... take a look at the hourly VIX. Thats pretty bearish for the indexes as the day proceeds

UPDATE 10.30 Look to the tranny, a break <5080 would be the FIRST warning that my general outlook is correct. If that occurs, should see the sp<1400 late today or Monday.

Pre-Market Brief

Good morning. Its the last trading day of the week and the month. How we close today will be important in many respects, not least from a chartists perspective. Futures are showing slight gains, sp +2pts, we're set to open around 1418, a mere 2pts from yesterday mornings peak.


sp'60min

sp'daily5

Summary

Indeed, an important day is ahead.

As someone who is generally more focused on the bigger trends, as I noted in my overnight post, what is VERY important for the bears today, is to see the indexes close the day flat...or preferably a little lower. That would ensure at least the monthly cycles remain with provisional warnings of trouble for December.
--

One good aspect that IS already the case for the bears is that the hourly cycles are all primed for a considerable down cycle now.

I suppose we could still hit the 50 day MA this morning @ 1422...and see a reversal from there.  However, I absolutely do not want to see a daily close >1425, or worse 1430. That would be a major problem.

*we have two pieces of econ-data today.

Personal income/outlays, important for the macro-economists out there.

However, much more important to the market..Chicago PMI @ 9.45am. Market is expecting 50.3
So, bears should be seeking anything under the recessionary threshold of 50.0  Any reading <48, and Mr Market will likely use it as an excuse to sell off, testing the sp'1400 level again.
-

back at 10am

Another trading month to conclude

We have just one trading day left of the month, and how we close tomorrow will probably provide some key technical clues as to where we are headed next month, and into early 2013. Bears should be seeking at least a flat Friday, or preferably <sp'1410. A close under sp'1400 would be massively bearish for next week.


sp'monthly3, rainbow

sp'daily4 - original bearish outlook

VIX, weekly, 6yr, rainbow

Summary

Tomorrow is the end of what has been a pretty busy week, and also the end of the trading month.

The daily'4 chart - remains on track, and effectively, my outlook is that we are in back test mode - against the (now broken) Oct'2011 rising support. If I'm right, we shouldn't be putting in any daily closes >1430, and in fact, we should see a pretty strong reversal within the next day or two.


VIX - tight...and ready to explode.

Here is a new chart, rainbow VIX, spanning the past six years. The point I'd like to highlight is the super tight bollinger trading bands. We've not seen bands this tight since spring 2007. Usually - as is widely recognised, when the bands get tight, eventually there is a snap move.

With the VIX in the lowly 15s, I can only imagine that any 'snap'..will be to the upside. The only issue is 'when'.


Monthly closings

One particular aspect that I will be focusing on tomorrow is how the monthly charts will be closing, not least my infamous 'rainbow' (Elder Impulse) charts.

As things stand, despite yet another higher close, the Sp' monthly is still sporting a blue candle. Now, it was red earlier this month - when we were in the mid 1300s, but a blue candle is still an important provisional warning of trouble.

At the very least tomorrow, I will want to see the indexes close flat, or preferably, at least a little lower. A close <sp'1400 would be an absolutely superb way to end the month. I can't wait to find out!

Goodnight from London

Daily Index Cycle update

The main market closed higher by around 0.5%. However, once again, the Rus'2000, and the Transports were leading, closing around 1% and 0.6% respectively higher. The near term trend remains to the upside, although any break <sp'1400 would cause serious technical damage, and open the door to a major wave lower.


IWM (Rus'2000 small cap)

SP'daily5

Trans

Summary

So, the SP' has not hit the 50 day MA @ 1422, nor the 61% fib @ 1425. Its thus possible we'll do that tomorrow, if so, I can live with being short a day early.

As things are, I think we're close to being maxed out. Certainly, the hourly cycles (see earlier post) are all primed to rollover this Friday, and continue lower into Monday.
--

Indeed, it was quite an interesting and exciting day, where after almost two weeks of waiting, I finally hit some trading buttons. I'm now heavy short, and seeking my first exit around sp'1400/1395 within the next 1-3 trading days.





Lets see how many of the deluded bull maniacs wish to hold across the weekend. I think we'll see some 'protective selling' tomorrow, not least since its the end of the trading month.

A little more later