Volatility Explodes

The VIX opened a little lower, putting in a classic hollow red reversal candle. As equities lost their opening gains, VIX battled higher. With a somewhat severe closing hour drop in the market, we saw the VIX explode, closing in AH trading +34% @ 18.99.


VIX'60min

VIX'daily3

VIX'weekly

Summary

The action in the VIX sure was crazy today . I don't think many expected VIX in the 17s..never mind the 19s!

We have FULLY filled the giant gap from the VIX collapse in early January.

The weekly VIX MACD cycle is now positive..and does offer a potencial 'nuclear phase'..but we need to put in a daily..and weekly close in the low 20s..first.

As it is, my best guess..we floor around sp'1480..and then at least one further major wave higher.

*I bailed on a VIX call block (and SPY puts) at 3.45pm.
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more later..on the indexes

Closing Brief

A very interesting day, with the indexes seeing a strong reversal after opening moderate gains. Most significant, the VIX breaking 30% higher into the 18s.


sp'60min

Summary

A somewhat severe closing hour candle...the most dynamic action we've seen in at least 3 or 4 months.

VIX confirming some real concern..with a break into the 19s!

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*I bailed on both my short blocks at 3.45pm. Its been a messy few days, and I'm far more content to start afresh tomorrow.

3pm update - bulls not laughing any more

The opening index levels look a long way up now. It would seem the earlier bullish hysteria was a real failure. The VIX has already broken into the 17s...which is something of a surprise considering we did not yet take out the 1497 low.


sp'daily5

vix'daily3

Summary

The VIX really is something of a surprise today. It seems to have a bit more power than I thought viable.

If sp'1480, then VIX ...20 ?
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back after the close
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3.45pm..exited VIX calls..and spy puts.

I'm done.  it remains a nasty market.

2pm update - Mr Fib says sp'1480

Its a bit choppy, but the indexes are still slipping. From a fibonacci perspective, sp'1480 sure would be a natural place for this wave to floor, not least with the 50 day MA also lurking. VIX is breaking back into the 16s.


sp'daily7 - fib levels

vix'daily3

Summary

So..how about sp'1480..with VIX 17.75 tomorrow ?

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back at 3pm

12pm update - when the drugs don't work

The US market continues to react directly the Italian election forecasts. Its likely going to be a real mess into Tuesday..at which time we then have round'1 of the Bernanke. VIX is confirming the turn lower.


sp'daily5

vix'daily3

Summary

Its kinda interesting now, but I sure won't be remotely pleased until I see a daily close <1497..and even then, I simply can't envision a near term scenario where we are trading <1480.

There is a massive rising support in those lower 1480s....and that'd probably equate to a full VIX gap-fill around 17.75/18.00
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In other news.. Affymax is having issues...with a drug recall. It has a product line of one..and it can't sell any of it.

It doesn't get much uglier than that. Wanna catch that falling knife? Huge volume. Despite the fall, could easily be <$1 later in the week.

time to cook!
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VIX update...from Mr T.




back later

11am update - intra day reversal, hmmm

So..with the italian market collapsing 4% in mere minutes - at the thought of Berlusconi returning, the US markets are following. What is clear, bears can't be even moderately pleased until we see a daily close <1497.


sp'60min

VIX'60min

Summary

In addition to the equity reversal, we're seeing some good confirmation in the VIX.
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10am update - laughing bulls

The bulls have to be laughing at yet another opening gap higher. The two day decline now seems a distant memory. All those touting a collapse wave will be retreating right back into their holes today. Dollar is moderately weak..and that is probably helping kick the metals an extra bit higher.


sp'daily5

SLV, daily

Summary

Another week.

More pomo
aided by HFT algo-bots..and cheer leaded  by the maniacs on clown finance TV.

Why would anyone believe anything has changed?
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10.37...intra-day reversal underway.

Unless we're break the Thursday low of 1497, it all counts for nothing though.