Volatility jumps back higher

With the main indexes moderately lower, the VIX opened higher..and maintained positive gains across the day. The close was somewhat bullish, with the VIX closing +13.7%  @ 14.67. The gap zone of 16-18 will quite possibly be fully filled within the next 2-4 days.


VIX'60min

VIX'daily

VIX'weekly

Summary

Last Fridays VIX declines were entirely negated today, and that is indeed something for the bears to be pleased about. Yet, we're still in the VIX 14s, and even the lower end of the 16-18 gap zone is still a good 10% away.

If the indexes floor around sp'1470, VIX'17 will be difficult.
If sp'1460/55, VIX '18 seems a 'reasonable' target.

On any outlook, I find it implausible for VIX >20 for some considerable months to come.

Closing Brief

A moderate victory for the bears, with the VIX confirming the index declines. No doubt, a lot of bearish hysteria will appear as the week progresses, but it does nothing to cancel what are astoundingly powerful upward trends - as seen on the weekly/monthly charts.


dow

sp'60min

trans

Summary

Suffice to say..its a start, but the weekly and monthly charts are quite clear about where we are headed into the spring.

Near term target - if 1490 broken, is somewhere in the 1470/55 area.
-

the usual bits and pieces later

3pm update - minor battle into the close

With one hour left, its now a battle as to whether the bears achieve their first minor victory since the end of last December. VIX remains in the 14s, a close in the 15s now looking unlikely. Most notable aspect of the day, $ gains of 0.5% or so.


sp'60min

Summary

Bears really could do with a close <1500, it'd be very useful.

back after the close...

2pm update - VIX spike into the close?

Mr Market has actually managed to consolidate intra-day declines of almost 1%. With two hours left, could we even close at the lows of the day? A VIX spike into the 15s seems reasonable late today/early Tuesday.


sp'daily5

vix'daily3

Summary

So, the declines are holding, and the talk will indeed now swing to 'how much'?

The rising 50 day MA in the sp'1450s would be a natural level.

Fib charts offer somewhere in the 1470/55 area.
--

Dollar strength today..maybe another 1.5% or so...and USD will likely get stuck around 80.50.
-

Eyes to the VIX, looking for a spike into the close and/or early tomorrow. 15s..even 16.50 on an opening gap higher.

12pm update - another bear tease

The market is teasing the bears yet again. Almost a 1% decline for the main indexes, with the VIX +11% - but still in the lowly 14s. 2012 was one giant tease to the doomer bears..2013 won't likely be any better.


sp'daily5

vix'daily3

Summary

Its still kinda dull, isn't it? Not even 1% yet, after a climb from 1398 to 1514 across 5 weeks.

A tiresome..tease, that's what this is.
--

Best bear case...VIX 17/18..with sp'1460s....that's the best the bears can hope for..before the next major ramp..into the mid sp'1550s...and beyond.
-

I await a Valentines day bear massacre...go see the POMO schedule for February.

Any doubts? I refer you to the daily index charts from Aug 2010 to may 2011. Go stare at those for a few hours.

time for lunch
--

Update - VIX sonar report




back at 2pm

11am update - still not enough power

The bears are still embarrassingly weak. Six trading weeks....and still can't get a decline - even briefly. of 1%. VIX is 8% higher..but still in the 13s. Dollar is higher...but the metals are showing a little strength, Gold is already back to green.


sp'60min4 - retracement fib levels

VIX'60min

Summary

Even if we do break <1500, we'll get stuck around 1495, and then a multi-hour bounce to what...1505/10?

Its just no good for the bears when the declines are barely 1%..and then the POMO $ will kick in later today.
-

From the bearish side of things, its still a waste of time.

10am update - still can't fall 1%

The market is moderately lower by around 0.5-0.7% on most indexes. This is still pretty lame though, and the bears can't get confident about the much elusive retracement. The short term hourly cycle is likely to hit a brick wall around 1495.  VIX is higher, but still crazy low.


sp'daily5

vix'daily3

Summary

So, lets be clear...

Its nothing to get excited about..yet.

Bears haven't seen a 1% decline on the main indexes in SIX trading weeks.
--

A move to the 1460s seems the 'very best' bear case right now. The notion of going any lower than that before the early summer is likely nothing less than nonsense talk.

Pre-Market Brief

Good morning. Futures are moderately lower, with sp -6pts, we're set to open around 1507. The dollar is noticeably higher, +0.4% @ DXY 79.46, with the metals naturally lower. Factory orders data at 10am will probably be the excuse the market needs to pick a direction...and run with it.


sp'daily5

vix'daily3

Summary

So, we're likely to open a little lower, but we're still a good 5-7pts above the big 1500 level.

There is simply no power on the downside..yet.

Even a close <1500 would not entirely inspire me to believe that a retracement is underway, not least after last weeks teasing 2 day micro pull back.

*watch for those factory orders @ 10am.

good wishes for the week ahead