Wednesday 16 January 2013

Volatility - a touch lower

With the main indexes still stuck just under the mid-Sept 1474 high, the VIX again failed to hold opening gains, closing 1% lower, to settle @ 13.42. Considering the next big event - the debt ceiling, is looming on the horizon, the VIX remains bizarrely low.




The VIX came close to breaking into the 12s today, the low being 13.20. 

*If we do see a break >sp'1474, then VIX in the 12s is assured. Yet so far, sp'1474 resistance is holding.

The hourly chart is pretty much exhausted to the downside though. A brief spike into the giant gap level @16-18 seems viable...sometime later next week.

If my mid-term outlook of sp'1510/20 is correct though, then VIX 12/11 is indeed likely, and in fact we may see a brief major cyclical low in the single digits. VIX 9 would be something to behold, that's for sure.

As ever..keeping an open mind will be important.

More later..on the indexes 

Closing Brief

The mid-Sept'2012 high of sp'1474.51 is holding...just. It would seem even the most bullish traders are somewhat cautious to be meddling around these levels. In any move lower, the sp'1451 level will be first target, with the first fib level around 1445.





A pretty tiresome day of nothing, just bumping up against the highs from last September, when the Bernanke (yet again) arguably saved the stock market from crashing.

*I remain short, seeking an exit in the lower sp'1440s. That now seems unlikely until the middle of next week. Note that Monday is closed !

bits and pieces..across the ever.

3pm update - forever stuck?

Well, nothing last forever..and we can't stay stuck around sp'1471/73 all year. VIX remains in the lowly 13s. The dollar is back to evens, with the metals holding onto slight gains. Generally though, its just another quiet day.




If we break the mid-Sept high of 1474.51...then the short-stops get hit..and the chasers will come in.

It remains a very borderline situation.

back after the close

2pm update - on the edge

Mr Market is so very close to breaking the key 1474 high, with VIX close to breaking into the bizarrely low 12s. Yet..volume is near zero, and there really isn't any catalyst to move the market either way.

sp'60min4' - retracements



Its really up to the algo-bots, do they wanna push it over 1474, cause a short-stop cascade, and run this nonsense into the 1480s ?

Often is the case, we'll see a stupid spike to the upside, before a real reversal back to the downside.

AAPL remains higher, but $505 is not exactly bullish territory, is it?

1pm update - truly...tiresome

Mr Market remains stuck <1474. How many more days..weeks....years..are we gonna be stuck here? VIX remains close to breaking into the 12s. Metals look toppy in the near term..and due a fifth wave lower.

sp'60min4 - retracements

SLV, weekly - bullish count


Urghh...yet another day of..nothing.

I am bearish on market/metals in the immediate term, but seeking much higher levels in Feb>March.

There is a very clear snap-higher level on SLV @ 32.

12pm update - back to flat

In what feels like the one thousandth micro-rally since the start of the year, we're back to sp'1472 again. Market seems exhausted, but then..the bears seem powerless. Literally, it feels like the bears have no power to kick the market lower than 3-5pts..before the recovery bounce. Its getting pretty tiresome.

sp'60min4' - retracements



VIX is in real danger of a break into the 12s, which would seriously suggest we're going to see a snap >1474. Any move over 1474 will no doubt cause a short-stop cascade, and a close in the 1480s becomes viable.

I see a LOT of people touting an important cyclical market high around this time.. with sp' somewhere in the 1480s.

*meanwhile, it would seem many in the USA now await orders from his highness on 'gun matters.

Thats got to be good for another 3pts on the Sp?

11am update - same old nonsense

Opening minor declines...crawl back to flat. Rinse..repeat. Bears should be somewhat concerned that the VIX came close to breaking into the 12s earlier, which would be kinda suggestive that the next break..will be to the upside.




Still very quiet out there. Is this how its going to be..with infinate t-bond buying (POMO) ?

To my surprise, I don't see many out there showing any respect to the 'free money' that the Fed is throwing at the primary dealers.

Notable stock movers...AAPL, and BA.

No doubt a fair few short-stops are getting hit this morning. VERY weak chart trend though..even a move into the 530s wouldn't negate the broad down trend.

The bulls maniacs are going to need 550/560s after earnings to have a chance at ramping this hysteria-surrounded stock.

10am update - Weak Wednesday?

Well, here we go again. Minor opening declines, and we're still stuck close beneath the 1474 mid-Sept high. Mr Market remains seeking a break...>1474..or back into the 1450s..and then 'somewhat lower'. VIX showing zero concern...almost flirting with red.




I think the MACD (blue bar histogram) is to be highlighted across the next few days more than ever.

At the current rate, we'll finally see the sp' MACD go negative cycle by about, prime time for a major one day fall (15/20pts) will be Friday/Monday.

First retracement level zone is 1445/40...and that could easily be all we get down to.
The lower gap level of 1425 now looks exceedingly tough to reach.

I remain short, seeking those sp'1440s for an exit, although I'll bail in the low 1450s this Friday, if I can get it...since we're closed Monday, and in options land..there is little point holding across a 3 day weekend.

The 'old leader' is leading

Another day higher for the Transports, with another close in the 5600s. This is way beyond the old resistance level, and the bulls should merely be seeking a weekly close anywhere in the low 5600s. The monthly chart displays a clear breakout, and the next big level will be the psy' level of 6k.

Transports, daily

Transports, weekly

Transports, monthly


Transports - along with the Rus'2000, are the most volatile of the main indexes, and they certainly do tend to lead the way.

Without question, the tranny is now leading higher and is showing no sign of getting stuck. A hit of the big 6k level seems very viable in February/March, and it then has to be asked..are we looking at Trans 7k later this year? If that is the case, then sp'1600/1700?

Such talk is of course 'crazy talk' to the doomer bears, but then..they've been shamefully wrong for the past four years.

This market is now refuelled by the free (POMO) money, and if the primary dealers funnel it into the indexes, then we are going to ramp even higher than the cheer leaders on clown finance TV could ever dream of.

Looking ahead

As for tomorrow, we've lots more data of course, corporate and economic. The market could easily gap over the big '1474 high..and that would open up the 1480/90s..within hours. There are surely a huge amount of short-stops around 1473-75, and it would be a good basis for a renewed wave higher.

Despite that, so long as we don't break 1474, I'm guessing we still see the sp'1440s. The lower gap level of 1425 now looks out of range.

So much for the 'bloodbath'

It was just over 2 weeks ago (Friday Dec 28'th) that Zerohedge got wrapped up in bearish hysteria over an sp' close of down one percent. At the time, their headline of 'bloodbath' I found kinda bizarre. Now, a few weeks after the hyper-ramp back to the sp'1470s, such talk looks embarrassingly laughable.

Its only mid-January and already the bears have been smashed up. It could be a very painful few months ahead for those who battle against the primary trend...and the 'old leader' is quite clear about what that direction is.

Goodnight from London

Daily Index Cycle update

The Dow/SP/Nasdaq remain stuck under the mid-Sept highs of sp'1474. Yet the Transports and Rus'2000 continue to power upward. It remains a very split market, but it seems likely that the leaders are indeed probably still 'leading'.





Its almost as though we have two sets of indexes right now. The 3 laggards - the big three that the mainstream follow, and then the two leaders - The Transports..and the Rus'2000 small cap.

The breakouts on the latter two are indeed critical to respect, and all things considered, they are very likely indeed warning of further multi-month index gains.

So long as we hold under sp'1474, my outlook for a brief retracement to the sp'1440/25 gap zone, is still a viable one.

A little more later