With the indexes slipping significantly lower in the closing hour, the VIX closed the week on a high, settling +12.2% @ 16.30. Across the week, the VIX gained 16.5% Despite the gains, the big 20 threshold still looks very difficult to reach any time soon.
VIX'60min
VIX'daily3
VIX'weekly
Summary
A pretty exciting end to the week..and the month. Yet, we're still only talking about VIX 16s, that is a still a bizarrely low level.
Equity bears should be careful not to lose themselves in the hysteria of what is just an index decline of 1.4%. Primary weekly and monthly trends remain to the upside.
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The VIX weekly chart is kinda interesting, in that the week closed on a high - always a bullish sign for volatility. Yet, until we put in a VIX weekly close above the 200 weekly MA, the equity bears can't expect a major equity drop.
The main indexes saw a very significant secondary wave lower in the late afternoon, with the sp -23pts @ 1630. The VIX battled higher, closing +12% @ 16.30. Oil fell almost 2%, with similar weakness in the precious metals. A pretty exciting closing hour to end the month!
sp'60min
VIX'60min
Summary
Certainly, not the end to the week that the bulls were seeking, but it was end month, and there was an awful lot of index re-balancing, along with month-end issues.
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I certainly don't see any threat to the broader up trends. Nothing has changed. QE continues, and the daily charts are now due a cycle to the upside.
*I hold a small long position - via RIG, across the weekend.
Have a good weekend!
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*next main post, late Saturday, on the World monthly indexes.
The main indexes have broken below the morning lows, but we are still holding just above key support @ sp'1644. VIX is +5.5%, a new daily high. USD is actually starting to cool down a little.
sp'15min
Summary
A little bit of drama to end the day, or just a cruel bear tease?
I'm guessing it WILL hold.
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Those bears getting lost in hysteria, might be able to have their heads ripped off.
3.10pm...15min cycle looks BULLISH.
3.42pm... sp'1641....cycle STILL looks bullish for Monday.
3.50pm ...1639s... thats pretty interesting! Were it not the weekend, I'd be picking up another block to go LONG.
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The indexes have again seen a little wave of weakness, but we're still very comfortably holding over the key support, now around sp'1644. There is simply an absence of power on the bearish side. We still have some major index rebalancing to come later today.
sp'15min
Summary
A little tiny wave lower, but still, its surely just 'mere noise' to be ignored.
Daily charts all look like they are primed for a major move higher into mid June.
Sp'1700s are a'coming.
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UPDATE 2.15pm... sp'1648..hmm, just 4pts away from breaking key support.
With the failure of the bears to break below sp'1640, a new 6-10 day up cycle looks due to begin next week. First target is the Bernanke 'reversal day' high of 1687. A 1.6x fib target offers 1719 by mid June. Meanwhile..Oil is recovering quite strongly from its earlier low.
sp'daily5
Summary
*I've added a new channel (blue dash), it might get broken on Monday, but anyway, I just don't see the bears breaking <1640 now.
Bears had their chance...and failed.
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Its been a pretty good week in the bunker, and I will hold Long RIG, across the weekend.
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The main indexes are back to positive, with slight gains. VIX is set to go red this afternoon. USD is +0.5%, and this is keeping a lid on both Oil and the precious metals. Considering the QE out there, market is likely to churn quietly higher into the afternoon close.
sp'60min
vix'60min
Summary
Today...was as I feared. Moderate opening declines..that failed to breach the important sp'1640 threshold...and the market used the PMI number as the excuse to ramp back up.
No doubt many bears are now dismayed, and annoyed. Perhaps more than that though...a reminder that the primary trend remains UP..and despite the chatter...QE does in fact continue.
In fact, the next POMO schedule is issued this afternoon.
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*I am minor LONG, via RIG, will hold into next week.
With the econ-data coming in better than expected, the market had the excuse it needed to ramp out of the sp'1640s. There is a lot of QE fuel out there today, so a moderate green close looks rather likely, with the VIX set to turn red later in the afternoon.
sp'60min
VIX'60min
Summary
We have found support again in the area of my 'first target'.
Certainly, I just can't see the 1640 line being breached today, next Monday, or indeed, for perhaps the next few weeks.
Bears are probably going to need to wait until mid June.
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*I am long RIG, I like the company/sector, and its my way of going long in what remains a...nasty market.
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The main indexes are holding above what is key support of sp'1642. There appears a lack of bear 'power', and there is the very real threat of a positive close, and gains across the next few weeks. PMI number comes in at a very bullish 58.7...markets snap back higher.
sp'15min
vix'60min
Summary
*I exited my two major short index positions at the open @ sp'1649. I do not intend to launch another index short for at least 6-10 trading days.
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So...I'm out..and now I am wondering what the bulls can do to close the week..and month. With QE of 5-6bn, you'd have to think we'll at least hold the sp'1640s..if not even a moderately higher close.
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I have to say, the PMI of 58 is a real surprise, and if we see another number like that in June, it bodes pretty good for the US into the summer.
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Update 10.30am. It does look like the market has floored..and will see some kind of 6-10 day up cycle into mid June.
I'm not in the mood to go long the indexes, but I am now LONG - Transocean (RIG).
The 200 day should offer good support, and I do think much higher levels are viable across the summer. As ever..one day at a time.
*I will hold Long, via RIG, across the weekend. First target for next week is 52/53.
Good morning. Futures are somewhat lower, sp-8pts, we're set to open around 1646. Bears need a break <1640, and then quickly <1635. However, with huge QE of 5-6bn today, bears face massive resistance. USD is moderately higher.
sp'15min
vix'60min
Summary
All things considered, I don't think the bears can break back into the 1630s.
There is important econ-data this morning - the PMI number at 9.45am will be a market mover, look for the market to especially move at 9.40am - when a number of people receive the data prior to main market.
So..my best guess for today - market sells off to around 10.30/11am, but holds sp'1642/40, as best seen on the 15min cycle chart.
*look for an opening black/fail candle on the VIX.
However, I will note the MACD cycle on the VIX offers a broad VIX rise across the ENTIRE day. Arguably, that is the most bearish possibility right now.
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*I am heavy short the indexes, and will seek an exit at the open.
I do not intend to go long today, but will consider trading long (probably via Oil) next Monday instead.
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Update from Permabull...Mr Carboni...
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tis the last day of the week..and month. Updates across the day.
In this shortened trading week, the sp' is currently holding net weekly gains of just 4.8pts. Certainly, it won't take much to close the week red, but with a very large QE of 5-6bn to close the week...and month, the bears are still facing what remains an incessant Fed problem.
sp'weekly
sp'weekly2, rainbow
Summary
So, can we close the week at least moderately red? Hourly index charts did rollover in the closing hour today, and the daily charts are still in a bearish state, yet, the damn Fed is going to be throwing 5-6bn of QE at the market tomorrow.
Primary weekly trend is unquestionably still bullish, but perhaps the 1687 'Bernanke reversal day' is at least a mid-term high. Obvious downside target is the lower bollinger band, which is currently 1459, but still broadly rising.
Many out there seem to be seeking the sp'1550s or so, and I can kinda understand that, but it will be exceptionally difficult whilst QE continues.
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Final chart to end the trading day...
Nikkei, monthly, 20yr
As noted last night, I was looking for the candle to turn red, and indeed we now have an extremely bearish spiky candle, with just one trading day of the month left. First downside target is 12k, which is a good 10% lower!
Looking ahead
There is the QE tomorrow at 10am of course, but there is also some econ-data. Most notable is the Chicago PMI number at 9.45am. Market is looking for 50, equity bears should be seeking anything <49.
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*I am heavy short the indexes, but seeking an early morning Friday exit
The main indexes all closed moderately higher, with the sp +6pts @ 1654 - after being stuck around 1660 for almost the entire day. The market was weak in the closing hour, with the transports closing just 0.2% higher. VIX confirmed the moderate equity gains.
R2K
SP'daily5
Trans
Summary
A pretty dull day of nothing. After the opening gains settled around 1660 by mid morning, the indexes effectively flat lined until 3pm. There was then a slightly interesting little closing hour weakness, but still, we are 20pts away from taking out the double floor of 1635.
Despite the moderate gains, the underlying MACD (blue bar histogram) cycle ticked lower again, and price momentum is STILL increasingly swinging in favour of the bears.
The primary near term target zone is sp'1630/25, although many chartists are still seeking 1600/1597. I personally find the latter price target very unlikely in this down cycle.
Whilst the main indexes held moderate gains across the day, the VIX melted lower, closing -2% @ 14.53. However, the last hourly candle of the day was pretty bullish, and bodes for some degree of early Friday surge. VIX 16s look viable.
VIX'60min
VIX'daily3
Summary
Yesterdays black daily candle was confirmed by today's marginally lower close. Yet, today's drop was indeed only minor, and the hourly chart is looking bullish at least for tomorrow morning.
The real issue is can the market break last weeks double floor of sp'1635. If that can be done, then VIX 16s look an easy target.
The main indexes effectively flat lined for almost the entire day after opening moderate gains took the sp' to 1660. The closing hour did show some distinct weakness, with the hourly cycles rolling over.
sp'60min2 - H/S formation idea
Summary
I'm not entirely sure what to think of today. Daily charts are now looking moderately bullish - although nothing conclusive yet.
However, the hourly charts ARE rolling over though, and those on the short side should be desperate for a break under 1640 early tomorrow..and more importantly...1635.
That will be difficult across Friday, not least with a QE of 5-6bn.
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Despite the indexes holding flat since the early morning, the VIX has continued a slow, but consistent decline, and is now -3.4%. Sp'1660 is clearly an important level, and it almost looks like we're right back to the recent algo-bot melt.
sp'60min2
vix'60min
Summary
Hmm, its turned out to be something of a dull day.
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I will hold short overnight, but considering there is a 5-6bn of QE tomorrow - along with end-month price shuffling, I'm no longer looking forward to whats ahead.
Very frustrating..and now we're sp'1671s
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3.29pm..well, we're rolling over on the hourly chart.
Considering how dull the day was, ANY close <1660 should be a...relief.
The market has been stuck for the past four hours, and is arguably due to rollover into the close. Whilst the indexes are flat lining, the VIX did break a new low, and is now -2.6%. Bears really need to see at least half of the current equity gains to evaporate by the close.
sp'60min2
vix'60min
Summary
Oscar would say 'flat tops equal market drops', although I'm not sure he'd apply that to an hourly cycle. We certainly remain stuck, on what is a day without any significant QE.
With two hours to go, there is still time for some distinct weakness, but there is no sign of it yet.
Gods forbid some kind of last hour ramp, a close in the 1670s would really be a problem.
Main indexes are still holding moderate gains, with the VIX on the edge of taking out its earlier low. Bears are broadly holding the market under the important 1660 line. The rest of the afternoon will be critical, bears arguably need at least a fractional red close.
sp'60min2
sp'daily5
Summary
The H/S formation idea is arguably still viable, but we must close <1660, and preferably <1550.
Certainly, there is NO rollover currently, but the smaller 15/60min cycles could slip lower all the way into the close.
The main indexes are still holding moderate gains, with the sp' sitting on the edge of what might be the top of a RS. Bears really need to keep any hourly candle closes <1660. Meanwhile, VIX is occasionally a bit higher, and is warning of possible trouble later in the day/early Friday.
sp'15min
vix'60min
Summary
Its turning out to be something of a slow motion battle at what is arguably pretty key resistance of 1655/60.
I think the VIX is the tell, but hey, I'd say that, right? Long afternoon ahead...
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*I am heavy short, and seeking an exit <1640.
More nonsense going on in FNMA, after yesterdays bizarre waveform price action...
VIX update coming...
12.02pm.. well, there go the sp'1660 short stops. Hmm
The main indexes continue to hold moderate gains. Bears have already been teased with one micro rollover, but there is still the threat of a break into the 1660s. A daily close in the 1660s would bode badly for those short into next week. Despite equities, VIX is holding about flat.
sp'15min
vix'60min
Summary
A close up of what 'might' be a H/S formation on the 15min chart, clearly shows the battle line. A few hours >1660, would be 'annoying' to put it mildly.
ALL daily index charts remain bearish, despite the current gains.
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Perhaps the VIX is the tell right now. Its holding very strong, although yes..from what remains a very low level.
*I am HEAVY short, from sp'1651, and also this morning from 1658. Seeking an exit <1640.
The various econ-data has come in marginally poor, but the market is still largely holding together. Bears just need to contain this morning under 1660, and there should be increasing weakness as the day proceeds. USD is weak, Oil very weak, Metals are strong.
sp'60min2
VIX'60min
Summary
Market on the edge of violating my little H/S idea. An hour or two trading in the 1660s will mess that up.
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15min cycle is probably going to max out though pretty soon.
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*I remain short, will probably hold until at least the latter part of today, if not early Friday.
A short, but wise economics chat...
UPDATE: 10.01am... Adding to existing SHORT position, from sp'1658s
sp'15min...
What you think? A fail here would make for a rather interesting afternoon.
10.18am..15min cycle rolling over..and so far..bears have held the line. Now we need to see the indexes go red by lunch time.
Good morning. Futures are battling a little higher, sp +6pts, we're set to open around 1654. Bears need to keep any morning rally under 1660. There is an array of econ-data this morning, so Mr Market has a lot to deal with. Metals are showing a little strength, with Gold +$3
sp'60min''2 - H/S formation idea
vix'60min
Summary
A long day ahead, lets see if the bears can keep this contained, with a break <1640 later this afternoon.
*I am short the indexes, seeking an exit in the sp'1630/25 zone.
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Despite yet another latter day recovery, the market closed moderately lower. There is still a distinct weakness out there, and bears probably have another few days of opportunity. Primary downside target remains sp'1630/25, secondary is also unchanged @ 1600/1597.
sp'60min - H/S formation idea
sp'daily3 - fib levels
Summary
Its been a long day, so I'll keep this short. Daily charts remain generally bearish.
I'm wondering if the recent few days of chop is just building a H/S formation, with the RS peak around sp'1655/60. Hard to know, and its just an idea anyway.
Bears need to take out that double low of sp'1635, and that should open up a further 5/10pts to the downside, with VIX in the 16s.
Looking ahead
There is quite a bit of econ-data tomorrow. We have the gas/oil reports, there is also GDP, jobs data, home sales, and corporate profits. That is plenty for Mr Market to be dealing with.
There is no significant QE for Thursday, so bears arguably have more chance of consistent downside. I realise many would disagree with that theory though.
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Bonus chart!
Okay, here is something to close the trading day...
Japan, Nikkei, monthly, 20yr
Equity bears should be seeking a May close <13800, which would make for a marginally red candle. However, the current monthly candle certainly is already spiky, and a reasonable sign that the Nikkei might at least be maxed out for the early summer.
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*I am holding minor-short the indexes overnight, seeking an exit in the sp'1630/25 area, no later than early Friday.
Goodnight from London
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Video bonus, from Biderman
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Update 10.50pm (EST), Nikkei is down almost 400pts, and indeed, might close the month with a huge monster red spiky candle. First downside target is the old breakout level of 12k.
The main indexes all closed moderately lower, and that was somewhat above their 11am lows. The sp' close of 1648 was a fall of 0.7%, and its notable that the bears should now be somewhat desperate to break the double floor low of 1635. Near term trend remains weak.
Sp'daily5
Summary
So...a bit of a tricky day in market land. We saw opening moderate declines that built until 11am, to be followed by almost 5 hours of the market battling back higher.
There was a touch of weakness in the closing 15 minutes, and its very possible that was the start of the next major wave lower - across Thursday, and even into early Friday.
Best guess is that sp' will floor in the 1630/25 area this Friday.
I do realise though, there are plenty out there who are seeking somewhat lower levels, with a gap-fill of 1597. In my view the bears have a window until late Friday morning. After that, there is a very large QE of 5-6bn, along with a lot of end-month trading issues to settle.
The VIX broke a new short term high today, hitting 15.65 in early morning - whilst sp'1640, yet with the indexes rallying back, the VIX lost most of the gains, and closed +2.4% @ 14.83. Near trend is bullish volatility, but its going to be very difficult to break much higher than the 16s.
VIX'60min
VIX'daily3
Summary
A positive VIX close for the second consecutive day, but the gains were only moderate, and we're still not able to put in a close in the 15s.
Underlying MACD (blue bar histogram) cycle is still ticking higher, but its now getting a little on the high side. It would seem, at best the bears have two more days higher.
VIX 20s look as far away as they have done since the start of the year.
The main indexes declined across the morning, and saw what was arguably a partially QE-fuelled recovery into the late afternoon. VIX managed slight gains of 2% or so. Near term downside looks to be sp'1630/25.
sp'60min
Summary
Interesting day, a bit messy, but still....pretty good for those on the bearish side.
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*I hold minor-short the indexes overnight, seeking an exit around sp'1630/25 tomorrow/early Friday.
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Mr Market has battled up from 1640 to 1653, with the VIX now a mere 1% higher. Bears are seeking a red close, and all things considered, will just about get one. Daily index cycles all still look weak, and with no sig' QE tomorrow, bears have another window into early Friday.
sp'15min
Summary
Another little 5 wave micro count, like the A' wave?
I find it hard to believe we'll get a close in the green.
Obvious re-short level is 1655/57.
*I'm considering a minor re-short into the close, but there is fair risk of a brief Thursday gap higher.
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updates into the close.
3.04pm ..looking at the 5min..we're due one last up cycle into the close.
best case is around 1656/57
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3.12pm...seeking a re-short from 1655/57 ..into the close.. ETA, 20/30mins
3.21pm... still waiting..sp'1651s.. I want to see another 4-5pts
still waiting..for 55/56
3.29pm.. sp'1652...another 3-4pts to go....plenty of time. Standing by to short the indexes.
3.42pm.. am minor-short the indexes, via IWM. Will hold overnight.
