Volatility slumps in the closing hour

With the indexes seeing a mini closing hour ramp, the VIX failed to hold flat, and slipped 3.9%, to settle @ 16.34 


VIX'60min

VIX'daily

Summary

The closing hour was obviously a major disappointment for the bears, and we are right back to levels from last Thursday.

As noted, bears will need a daily VIX close >17.50 to have any confidence in the immediate term, and today's fail..is a bad sign. It certainly doesn't mean we can't snap higher in the latter part of the week, but the probability has now likely dropped to 'low'.

What is also clear, the closer we get to Christmas day, the chance of a brief VIX snap higher gets increasingly smaller.

More later..on the indexes.

Closing Brief

The opening gains held, and despite a touch of weakness in the afternoon, we saw a closing hour ramp, and the bulls can certainly call today a victory, although we remain importantly below last Wednesdays FOMC sp'1438 equivalent high on all indexes.


Dow'60min

Sp'60min

Trans'60min

Summary

Hmm, a very disappointing Monday. The big indexes are making a challenge of the FOMC high.

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There seems almost a complete lack of power on the bearish side. The algo-bots are able to melt this nonsense higher to negate the few minor down cycles that we do get.

A daily close >1438 this week, and bears will arguably be back to square one.


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Santelli and Schiff...always worth seeing




more later...

3pm update - VIX could spike to 18/19

With the main indexes pulling back from their morning highs - lead again by the transports, the VIX is already back to flat. A close above the recent high of 17.50 would be a real bonus for the bears, and open up a move to 18/19, which would probably equate to sp'1400/1390 in the next few days.


vix'60min

trans,daily

Summary

Certainly, VIX is 'noisy' whilst its <20, but with the tranny putting in a fifth daily candle, I'm reasonably content with how things are going.
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Today is probably confusing to most, but..the bigger picture is still very suggestive of a massive down wave into the low sp'1200s in January.

Its quite exciting, but on days like this, when we are so close to breaking the recent FOMC high, its kinda..unsettling to be put it mildly.
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HPQ remains major fail of the day, -4%.

Only another 35% to go to hit my next target.
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UPDATE 3.22pm ...tranny, pennant (pink)..a close <5200 would be useful

VIX -1% again, a little disappointing.

back after the close

2pm update - now would be a good time

If the bears are going to control at least a few days of this week, they need to push this market lower into the close. A red index close is just about viable, but we'll need to see VIX break above the recent 17.50 high.


trans'60min

vix'60min

sp'daily5

Summary

We are certainly 'some' weakness, but until we're back in the 1416s..or lower, I won't be pleased.

However, the daily chart is starting to look spiky, and if we can break below 1410 early tomorrow, then there is still good chance for 1390s..before Santa arrives.
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Notable stocks of the day remain HPQ and BTU, both down around 3.5%

Another stinky coal company..that is probably about to get the hammer...

ANR is in a much worse state than BTU, first target would be $7.50

1pm update - tranny wants to fail

I'm holding to the notion that the transports is a key signal, and so far, it remains within a 5 day flat top. Only with a break <5160 can the bears start to feel confident of a little weakness before Christmas day.


Trans'60min

VIX'60min

Summary

Tranny putting in a spiky candle this lunch hour.
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VIX is still holding together, despite the sp' trying to break back into the 1430s. Dollar is roughly flat, no drama in currency land today.
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3 hours to go, that is plenty of time to see some latter day weakness.

Lets be clear though, if we do close in the 1430s, I won't be pleased.
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UAL looking like its reached the cloud ceiling...black candle warning of trouble.

Need confirmation below 22.50s

A much more reliable stock though...HPQ, ready to break back into a new downtrend.

Target remains the big $10.00

 UPDATE 1.30pm, tranny rolling over...(again).

As noted, bears really need a break <5160 for confidence of lower levels. There is just about enough time for even the dow/sp' to close flat, but it won't be easy.

If the bears are going to take control of this week...now would be the time.

12pm update - algo-bots doing their nonsense

It would seem the algo-bots are on the loose today, and we're seeing consistant attempts to trigger the short-stops, although some will obviously be a fair bit higher at the sp'1438/40 level. VIX is holding up, as is Mr $.


trans'60min

sp'daily5

Summary

So.the main indexes are now up around 0.75/0.9%. Certainly, it will be a problem for the bears if we close at these levels.

The question then becomes, 'so..err, are we going to break the Wednesday FOMC highs?'.

I find that hard to imagine, unless some cliff agreement is reached this week, and that seems...unlikely.
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So..I'm still seeking a flat close, but we are on the edge, lead not least by all those insolvent 'too big to fail' financials.
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BTU showing some weakness

Kinda interesting, but..will need a break into the 24s to be sure of that one.

11am update - watch the transports

The opening gains are still holding to a large extent, but its nothing significant, and those on the long side have a problem as we proceed further into the trading day. Transports failed to break the 4 day top, and is showing initial signs of weakness. Despite moderate index gains, the VIX is holding together,


trans'60min

vix'60min

Summary

I am seeking a flat close, or preferably a touch <sp'1410. That'd set up Tuesday for a move to 1402/1398..where we might get stuck again.
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Watching the weakness in AAPL and FB is quite amusing.


Trans, daily  - a very rare 5 candle spiky flat-top!

A red close seems very viable now.

10am update - awaiting renewed weakness

There is no reason why this market should close higher today. The ascending channels on the daily charts were all broken last week, the general trend should be moderately weak for at least a few days. The closer we get to Christmas day though, the lower the volume should be, and that will give the algo-bots greater chance of melting everything back upward.


Trans'60min

VIX'60min

Summary

Transports remains close to taking out the recent 4 day spiky-top. I suppose the algo-bots might want to do a stop-run before the next wave lower.

Tranny, H/S, with a neckline at 5020 ? Just a thought.
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VIX and Mr $ are flat.

So..nothing interesting yet today.

*according to clown network, AAPL did break <$500 in pre-market.
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I still like BTU - and the other coal stocks as a short.

Although it won't be until we see <$25, that we'll have a clear break

Here is that decaying mess..the HPQ

I still hold to my secondary target of $10...within first half half of 2013.  A break <14 will be the next proper sell signal.

Financials are crazy strong, with the FAZ bear ETF about to break support.

On the contrary side..we have Morgan Stanley..close to a major breakout.

A few daily closes > 18.50, and bears should be a little concerned

UPDATE 10.15am.. Tranny rolling over..and the main market should follow.

*AAPL breaks $500....next target 480/75

Pre-Market Brief

Good morning. Futures are showing moderate gains of around 0.4%, the sp' is set to open +6pts, @ 1419/20. As ever, eyes to the transports, which still seems a good underlying signal on where we are headed.


sp'60min

sp'daily5

Summary

Since the FOMC, the market has shown some consistant 'mild' weakness, yet there have been no dramatic moves yet.

My best guess..we close today broadly flat, or a touch lower. Anything >1410 would be a bonus, and set up a break under the previous 1398 low for Tues/Wednesday

I do not expect a move <1380 this week
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Good wishes for the last full trading week of 2012.