Volatility smacked lower..but stabilises

With the indexes seeing a crazy intra-day swings, its almost a little surprising the VIX didn't break into the 18s. Regardless, on the VIX appears to have stabilised from the earlier smack-down, closing moderately lower, -3.9%, to settle @ 16.46


VIX'60min

VIX'daily

VIX, daily, rainbow

Summary

The late morning ramp in the indexes saw the VIX put in the one if the biggest hourly declines that we've seen in weeks. That was a truly fierce snap lower, but as things closed, it looks like the hourly cycle is suggesting we've floored.

*note that despite todays decline, VIX, rainbow chart is still green.
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Sub'wave 2 complete?

Thats the real question right now, and if it is, we should be looking for the wave'3 to least break into the 19s. At this point, a break into the low 20s seems very unlikely.

More later, on the indexes.

Closing Brief

A really annoying day, but again..we saw the underlying weakness return in the closing hour. A micro double top is apparent on the smaller 60/15min cycles


sp'15min

The closing hourly charts...
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Dow'60min

Sp'60min

Trans'60min

Summary

Its a real mess on the hourly charts, not least the Dow, which almost broke above the recent peak. I'm really not sure what to say when I see the Dow' right back to where it started.

The other indexes - including the important transports, not yet above the peak, but its way too close for comfort.

I remain short overnight (gods help me), and am still seeking sp'1385.
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The usual bits and pieces across the evening.

3pm update - closing hour weakness?

A real mess of a trading day, the hourly indexes are getting pretty toppy, and there is certainly the potential for a closing hour sell off. The VIX is holding up relatively okay in the mid 16s, a close back in the 17s would be greatly re-support the bear outlook.


sp'60min

vix'60min

Summary

So, lets see what this twisted and messed up market has for the closing hour.

Will the deluded bull maniacs keep on buying, or will we see the rats abandon ship again, on renewed weakness? We'll soon know.
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I will hold short into tomorrow, and remain seeking sp'1385.
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UPDATE 3.23pm Hmm, its not looking good. The late morning ramp gains..just not fading away.

I suppose the current gains could instead all be wiped out tomorrow, but..today sucked. Tomorrow..can only be better.

Bears should be desperate for a close at least <1412. Considering the earlier ramp, surely there can't be many bears to 'cover at the close'?

UPDATE 3.40pm.. hmm, a double top?

back after the close, on what has been a really annoying day.

2pm update - back inside the washing machine

It is a market that is putting most traders through the spin cycle @ 1600rpm. Stepping back from the washing machine of decay and despair, the underlying weakness is still there, seen on both the weekly and monthly index charts. VIX may have floored in the mid 16s..in a sub-wave'2 pull back.


trans'60min

vix'60min

sp'weekly2, rainbow

Summary

It feels like a mine field today, and I'm still annoyed I didn't get stopped out @ 11am.

I still hold to the original sp'1385 target, although as we've seen, getting there, sure ain't a straight line down.

So, the question to be faced by the chartists at the end of today 'did we just see a sub-wave'2 ?'.
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with two hours to go, lets see if the gains..once again vaporise.

UPDATE 2.30pm An updated sp' chart, but...until we're back <1400, I won't be confident of it.

Clearly though, anyone who wants to short, a simple short-stop @ sp'1416, or equivilent.
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1pm update - urghh

What a lousy day this is turning out to be. The mid morning declines, entirely flipped, on gods know what excuse. Indexes are breaking out of their down channels, and if the current gains hold into the close, it would seriously threaten even the chance of re-testing the sp'1385 low.


sp'15min

vix'60min

Summary

A rough day in the bear bunker, and once again, we're reminded that the fast declines can be wiped out even faster by insane stupid market ramps.

Clearly, a HUGE number of bears got stopped out in the last 90 minutes, with some 'chasers' helping push prices up even faster.
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With three hours to go, even a flat close of sp'1407 looks somewhat 'wishful'.
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RE: transports. Its a borderline situation. Arguably, its semi-busted already. We need an afternoon snap lower, just to get things back inline.

I suppose this could have been a sub-wave'2 higher, but if it is, it will need to stop going up..soon.

Trans' 4900 looks a long way down from here. Last line in the sand for the bears is trans @ 5160. Any close today/tomorrow over that, and I will be frankly..dismayed.

Despite the index ramp..AAPL remains weak, and 540/530 would be logical next level.

UPDATE 1.23pm No need for bears to be on suicide watch..quite yet.

We may have a top on the 15min cycle...

We really need to break <1410 though, and close <1407.

If..that is the case, then we just saw a pretty fierce wave'2..but won't know until the close, or into Thursday.

12pm update - chop fest

Its turning into a real mess again. Opening gains failed, with a snap lower, breaking sp'1400, only to bounce right back. Regardless of this latest bounce, underlying weakness should re-appear this afternoon, breaking the earlier snap lows. A close in the low 1390s seems very feasible, with VIX 18.


trans'60min

sp'60min

VIX'60min

Summary

What is clear, bears need to see this latest bounce fail, and close under it.

Tranny H/S formation still intact, but its borderline again, must not >5120.

Weekly charts are now flashing provisional warnings...will update those later.

UPDATE...well, they've broken the channel lines...and bears are in real trouble..again.

A close over 1420 would be..devastating. Any of the serious bears will have just got kicked out.

I'm getting rattled by this.

The underlying trend IS down, but...a close >1415.. and certainly >1420..would really mess things up.
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Still 4 hours to go, and thats long enough to once again reverse back lower..even below the morning low.

As ever..this market is pretty twisted.
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UPDATe 12.17pm.  I'm annoyed with myself, should have stopped out @1402 at least, could have reshorted >1410.

Looks like a possible spike top for this latest round of lunacy..

I sure want to see <1410..within the next 30-90 minutes.

11am update - major down cycle...due

Mr Market's opening gains look like they will vapourise imminently. We are due for a major down wave, breaking back into the sp'1380s..testing the recent low and big 200 day MA @ 1385. Bears should be seeking a VIX testing 18 later today.


trans'60min

vix'60min

Summary

Are we having fun yet?

The tranny H/S formation is holding....and as I type..its snapped.

We remain on track for 1385.
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I remain short, and comfortable about holding all the way to sp'1385, which still seems viable.

sp'daily5f

Strike'1 for Mr Market...  3 strikes..and we fall...hard.
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AAPL, leading the way..

Target..$500..and a break

UPDATE 11.18am A micro-bounce...shouldn't be an issue. Daily trends are ALL warning of major trouble.

Looking good, first target remains sp'1385
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UPDATE 11.35...ohoh, stupid bounce, back to flat on the sp'500  It had better not go >1415..or that'll be a real problem.

10am update - the weakness is out there

We're off and running, and the opening gains look entirely unsustainable. The VIX is holding together, and by late afternoon, could easily be 5-7% higher in the low 18s.


trans'60min

sp'daily5

Summary

Keep your eyes on the tranny, need it to stay <5120...and slide lower for rest of today, breaking sub 5k, no later than tomorrow afternoon.
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We have a long day ahead, bears need a close in the sp'1390s, anything in the 1380s would a real bonus.


oh yes..the weakness IS out there



*coming up...charts on FCX, MMR..both pretty crazy.

UPDATE 10.05am Tranny is holding within the H/S...seeking major down move.

If this pans out as expected, I will be..somewhat pleased  ;)

Pre-Market Brief

Good morning. Futures are slightly off their overnight highs, sp +4pts, we're set to open around 1411. This is most likely just another opportunity for anyone not yet short to do so, or similarly, to exit existing longs. Daily index cycles are ticking lower, with the VIX headed for the 19s.


sp'60min

sp'daily5

Summary

Bears in theory could tolerate a brief spike as high as sp'1420, but really, I don't want to see anything >1415 this morning.

What I do want to see is a VIX holding together, and then making a latter day battle higher into the 18s, with a close in the sp'1390s.

I remain short, seeking sp'1385, which...right now, seems somewhat unlikely today.

*ADP jobs data was a touch lower than expected, 118k vs 125k.
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Upcoming econ-data @ 10am, Factory order and ISM non-manu. Both should have at least some effect on the market.

UPDATE 9am

Big deal this morning.

FCX buys TWO oil exploration companies... MMR and PXP.

FCX -13% right now...with MMR +74%  ....would have made one hell of an options call trade ;)

MMR Dec $11 Calls ...5 cents..they'll be $4.00 at the open. Urghh. Thats 20,000%.

Seeking much lower levels

It was a choppy market day, and as ever, its important to keep things in perspective. The bigger monthly charts are still warning of trouble, and so far, my original outlook remains on track, with a target of sp'1225 within the next 2-6 weeks.


sp'daily4

spdaily5b - scenarios

sp'monthly3, rainbow

Summary

First, I think its important to keep in mind a few scenarios. I am dismissing 'A', I think we're either going to see B or C pan out.

So, I'm pretty sure we'll see a break into the sp'1200s (whether its 1260s, or 1220s, I don't mind which!), the only issue is...when!

The time frame is going to be really hard to guess, so...I just think everyone who is on the bearish train right now, needs to be patient. The sp'1200s might not be reachable until January.


Monthly charts..highlighting the 10MA @ 1394

A break <1400, should open up 1380s, and with a few daily closes under the monthly 10MA of 1394, I think we should be on our way to the 1200s. Its viable this month, but it might take until January.


Wonderful Wednesday?

We have a lot of econ-data tomorrow, not least the ADP jobs data -although most analysts are justifiably dismissive of this seemingly random number generator the people at ADP use. Regardless, the market will take notice of the number, and will then look ahead to the US Govt' number on Friday.

Today was a bit frustrating, not least the opening hour. I will hope for a major gap lower tomorrow, if not Thursday. That would allow my next exit - somewhere around sp'1385...very much easier.

Goodnight from London

Daily Index Cycle update

The main indexes had a choppy trading day, and despite numerous small counter rallies, the main market closed moderately lower. The declines were again confirmed via a slightly higher VIX. The first downside target remains sp'1385. If that fails to hold, then a challenge of the recent 1343 low is on the menu.


IWM

Sp'daily5

Trans

Summary

Suffice to say, we're still yet to see our first major down day in this new cycle.

The underlying MACD (blue bar histogram) cycle ticked lower for a second day, and it could easily fall for another 7-10 days. Yes...all the way into mid December.

Bears really need an overnight gap <sp'1400, that will open up a quick decline to 1385, where we will then see how this market copes with re-testing the 200 day MA.

A little more later.