Thursday 14 March 2013

Volatility headed for 10s

With the main indexes continuing to rise, the VIX made new lows...getting within a fraction of the 10s @ 11.05, closing - 4.5% @ 11.30. Near term trend still looks weak, and VIX in the 10s, even 9s is 'briefly' possible towards the middle of next week.



VIX, weekly2, rainbow, 10yr


So..VIX 10s look a given either tomorrow, or early next week.

The only issue now is whether we single digit VIX before this multi-month index up cycle completes.

The big 10 year VIX chart indeed shows that we are now down to levels not seen since Feb'2007. Its pretty incredible.

more later..on the indexes

Closing Brief

Another day higher for the main indexes, with the Dow making its tenth consecutive higher close. The USD closed moderately lower, but still above the first line of support. Oil closed a little higher, but the metals were still a little weak. The VIX naturally closed another 5% lower in the 11s.



I've a fair degree of considence in the near term micro-count.

Its hard to know if we've yet completed little black'5 of blue III. Considering opex Friday + big POMO, I'm guessing we won't see any decline until Monday.

Even then, we're still probably due another wave higher (blue V) on Tue/Wed.

*I am merely holding SLV overnight, looking to exit before the weekend!

more later..on the VIX

3pm update - melt into the close ?

The main markets continue to hold moderate gains. There is simply no sign of weakness, and with opex tomorrow, and an even larger POMO fuel tank to be issued, bears should be sitting well away. The USD is moderately lower, but its still holding key support.



No reason to expect any weakness in the closing hour.

Lets see how high the algo-bots can melt it!

SLV appears to be holding together. Hourly charts offer near term upside, but mid-term - into April/May looks VERY suspect.

*I will hold SLV overnight, and look to exit on an opening gap higher in the 28.20/40 zone.

back after the close

2pm update - another day of gains

Markets are continuing to hold moderate gains, USD is cooling down ,and is now down by 0.44% Oil is a little higher. Gold is +$4, Silver is still battling to get back to evens. Bears face an opex Friday, fuelled by a rather large 4-5bn POMO.



Not much to say..hourly MACD cycle is starting to rollover, maybe we see blue IV tomorrow?

Best guess, blue IV...Monday.. after opex!

*will probably hold SLV into tomorrow

12pm update - moderate gains

The main indexes are comfortably holding moderate gains. USD is now a touch lower after earlier gains. Oil is a touch higher, whilst the metals remain somewhat weak, but holding above the gap lows. VIX the Friday close look very viable now.




So...we're now in the sp'1560s..and there remains NO sign of a turn..or the current trend ending.

Naturally, many will now start to wonder if the 1600s are going to be hit before the next multi-week down wave. I'm

*I bailed on my USO long just after the open, but I'm still holding SLV, which was indeed a rather concerning gap lower.

So long as it doesn't break below 27.69..and certainly 27.35..I'm not going to be too concerned. Underlying MACD cycle on the hourly chart offers considerable upside to the mid 28s. The opening hourly candle was a reversal, but so far, just not seeing significant follow through.


VIX update

back at 2pm

10am update - more of the same

Good morning. The market is opening moderately higher.. Bears face massive problems across the next two days, big POMOs, and its quad-opex. The USD is slightly higher, although Oil is a touch higher, precious metals are recovering from opening declines.


SLV, 15min


So..we're opening higher..and we still have the POMO fuel that might kick in later today.

As I feared, a weekly close in the sp'1570s seems very viable.

Silver has put in an opening reversal candle - much like last Friday.

*I remain long USO and SLV...might hold into Friday.

Dollar still rising

The US equity markets continue to rise, but perhaps more surprising is the relentless strength in the US dollar. The USD broke into the 83s today, a level not seen since early August 2012. The near term trend is looking somewhat over stretched, but there no sign of it yet levelling out.

USD, daily

USD, weekly

USD, monthly2, rainbow


So..we saw the USD 83s today. This is no doubt putting distinct pressure on the commodity AND equity markets, not that the latter seems to be overly affected. First soft resistance is currently the upper bollinger of 84.04..and  that figure itself is rising each day.

The MACD (blue bar histogram) cycle on the daily cycle has actually been losing momentum since late February, but its still positive. Equity bears have a real problem when this cycle floors, and then starts rising again.

I am certainly still looking for a 1-2 week cycle lower in the USD, but so far...its just not even started, and we keep marching higher..across March.

Looking ahead

Thursday is a rather large POMO day, although less than the one planned for opex Friday. Bears will have a real problem driving the market lower into this weekend, although we are due a minor 20/30pt fall in the sp' before one further little wave (Blue IV) higher.


All things considered, I'm still not doing any index shorts/VIX long positions until at least the tail end of next week. What is clear, we could easily close this week in the sp'1570s, which would be a fiercely bullish way to end the week..and first half of March.

Goodnight from London

Daily Index Cycle update

The main indexes saw the usual minor morning declines, but a latter day melt higher. The Dow closed higher for the ninth consecutive day. With the VIX back in the 11s, the bulls remain firmly in control, although the weekly charts are warning of trouble in about 1-2 weeks.





*special note on the transports, which I had failed to check all day. The tranny was massively strong, closing +1.6%, in the 6200s. Is the old leader again warning of upside in the main indexes for Thursday and Friday?

There isn't too much to say really, other than the usual 'primary trend is still up'.

Thursday..and especially Friday are major POMO days, and I'm highly suspicious that we'll close in the sp'1565/75 area to conclude the week.

a little more later...