Volatility fails to hold opening gains

The VIX entirely failed to hold the opening gains of 12%, as the bulls battled the indexes back upward across the day. The VIX closed just 0.2% higher @ 13.92. On the week, the VIX gained 9.6%, but remains at a historically..and bizarrely low level.


VIX'60min

VIX'daily3

VIX'weekly

Summary

So, the VIX failed...as was clearly apparent on the hourly and daily charts - with the opening black candles.

Bears can certainly tout that the VIX was still higher on the week, but 9% of a small number is still a low VIX.  Until the bears get a few daily closes in the 16-18s, it remains a disturbingly complacent market.


Outlook for next week

Despite the weak VIX on Friday, I'd still look for VIX 16/17s on Monday, and there is a moderate chance of hitting the big 20 late next week.

As the weekly chart highlights, the doomer bears - those seeking MUCH lower levels on the indexes, are going to need to see a weekly close above the 200 MA, which is currently still in the 21s.

Right now, those 21s are 50% higher..and that's going to be one hell of a task for the bears, even if the market sees increasing weakness in the days ahead.

more later...on the indexes

Closing Brief

The market opened sharply lower, but the bulls battled higher across the day, recovering most of the declines. The precious metals rallied on the renewed belief that QE won't actually be ending any time soon. VIX was weak, 12% higher at the open, but only 1% at the close.


sp'60min

Summary

Clearly, not the end I was expecting, and I'm surely not the only one out there embarrassed at the weakness that is still apparent on the bearish side.

re: the hourly count.

I'm very unsure what to make of the near term action. With the late day ramp into the weekend, what is that saying about next week?

The VIX is primed for upside Monday - see hourly cycle, but it sure didn't show much power today.  Even the opening gain of 12% wasn't much, since that only (briefly) got the VIX back in the 15s.


Eyes on the bigger picture

Regardless of the intra-day nonsense  - and the end day spike/ramp, the daily indexes have broken down..and the weekly charts ARE warning of a multi-week down cycle.

For the big/serious money out there, any short position has a rather simple short-shop at the equivalent of sp'1573.

Have a good weekend.
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*the next main posting will be late Saturday.

3pm update - an important closing hour

How we close this week will be especially important. Bears must keep a lid on this rally. VIX remains very lacklustre, and is only holding slight gains of 3-4% (it opened +12%). Precious metals are building gains, as fear that QE will 'ever end'...are put on hold.


sp'60min

vix'60min

Summary

*I've adjusted the hourly count, maybe we're in a 4 of main'1 down ?

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Its starting to get frustrating again though. Opening declines of 20pts, and yet those have essentially halved, and now the bears face the closing hour, where some will be even be looking for a flat close on a crazy spike.

If bears fail to close at least <1550, then its a major fail. We shall soon see.

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Exiting at current levels..seems pointless, unless you think we're going to soar early next week with new index highs?

updates...into the close...


3.10pm..resistance at the hourly 10MA..as is often the case.

Bears gotta push here..<1544..otherwise, its all minor chop.
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3.22pm...its looking like we WILL close under 1550..so.. bears will at least hold onto some declines, but nothing significant.

After a lot of thought...and considering the breaks of 2 more indexes today, I'm going to hold short across the weekend...and will hope we see a Monday gap lower in the 1530/20 area -  at which point I'd be looking for a strong bounce.
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3.37pm... market makers want to pin the SPY @ 155 ..so...sp'1550 for the weekly close..hmm
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*I will hold short across the weekend..I still think there is another 1-1.5% lower in this wave.

Unless you believe we're going to new highs, it makes no sense to be going long here, and existing shorts can have simple stops at 1573..or tighter.

back at the close

2pm update - battling it out

The bull maniacs are still trying to claw higher, but they face stiff resistance in the 1548/52 area. A failure here, opens up a major drop into the close, if 1538 fails...- which I expect, a close near the 50 day MA of 1530 is still viable..with two hours left of the trading week.


sp'15min

sp'60min

Summary

Certainly, this bounce is taking its time.

Bears just need to get back under 1544, and that will open up an anticipated fall into the close.
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*still watching..and waiting. I remain intending to exit near the close, not least if we are <1540.
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UPDATE 2.15pm 1546...just another 2pts..and if we see 1543s...it should be enough to confirm the close will at least somewhat 'weak'.

Bears really need a VIX in the 16s, but that looks kinda difficult.

UPDATE 2.32pm, just what maniac is buying at 1548 right now?

Are they buying the 'bird flu in Asia' news, or 'NK conflict good for building sector' theory?
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1pm update - bears need to remain patient

The market is still trying to rally. Key resistance is the old floor of sp'1552, considering all the key breaks we've seen, it'd be very surprising if we break over that. I'm still seeking significant weakness into the close, and a break of 1538. VIX is higher, but so far by only 5-6%


sp'15min

sp'60min

Summary

The 15min cycle offers a simple ABC bounce wave...it should fail by 2pm.

A fail should offer 1538 before the close..and I can't see that holding on the next down wave.
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Regardless, I do look to exit near the close, which for those crazy option players, is always a good idea.
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12pm update - seeking big afternoon drop

The market has seen a very natural bounce from the early low of 1539. Underlying momentum is still strongly to the downside - now that sp'1573 is clearly the cycle high (at least for a few months). A break of 1538..should lead to a fast snap drop to the 50 day MA @ 1530.


sp'60min

sp'daily5b

Summary

Bears need to remain patient..and stay focused on the bigger trends.

Lets keep in mind...

We've now seen the Nasdaq Comp, and the NYSE Comp' also break their rising support from November. Thats 4 of 6 main indexes, and you could call it 5, if you count the borderline sp'500.

Weekly charts ARE rolling over.
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*I intend to hold short until 3.30pm, or sp'1530/25...whichever comes first.
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VIX update

Daily VIX charts are sporting what would normally be a warning of 'bear failure', but I don't think its an issue today.

If sp'1530/25 late today, then VIX is going to be in the 17s.

11am update - waiting for a snap under 1538

The market is rattled, and should generally fall across the entirety of Friday. A break of the recent 1538 low will open up a swift test of the important 50 day MA @ 1530. A close in the 1520s is viable..best bear case is arguably 1525/20.


sp'60min

sp'daily5b - best guess

Summary

More than anything today, I think bears need to be patient.

If the hourly count is correct, then we will proceed to much lower lows by the late afternoon.

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What I think should be clear to everyone now...the top was indeed sp'1573.

Anyone hoping 1576 will be broken..well, that's surely off the table for at least 3-4 months..and that's assuming the long term bullish trend continues - regardless of how lousy the economy gets.

*two other indexes have conclusively broken the rising support from the November low - Nasdaq Composite, and NYSE Composite.    The SP'500..is 'borderline'.

There is no doubt now..the November up cycle...is complete.
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UPDATE 11.18am  I can understand if some bears are starting to get annoyed..but really, this is just a natural intra-day bounce...to be expected.

Still expecting a major snap through 1538 later today..which should open up a major late day drop.
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UPDATE 11.33am.. I suppose you could count this mornings bounce as a micro'2 of todays main'3.

If that is the case, we should see a VERY significant drop beginning in the next hour or two, taking out the 1538 low.

Could get a little exciting.

10am update - bears in control

The market is significantly lower after the very disappointing jobs data. The hourly count would be suggestive of a 35/40pt drop by the Friday close. The current wave'3 lower could easily last into Monday. Things get 'real interesting' for May, if we can punch to 1480/70 by April'12.


sp'60min

vix'60min

Summary

A good open for the bears, and no doubt we'll see an intra-day bounce at some point.

However, if the count is right, this is a wave'3, it should be much stronger than wave'1 (24pts), and last at least all of today.

So..bears should be okay to hold until the Friday close, and we'll see where we are in late afternoon.
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I am holding short, seeking an exit late today, although I'll be tempted to get out if we can break into the 1525/20 area.
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RE: VIX, black candle.

Normally I would be VERY concerned at an opening black candle, but considering 'everything else' out there, I am not.

Bears need to give this market until the late afternoon, and see how far we can fall.  Its a wave'3 after all, ...patience!

Best 'reasonable' bear case is arguably sp'1525  where the lower Keltner on the daily chart is.

I would be VERY surprised if we break <1520 today. 

Pre-Market Brief

Good morning. Futures have slipped overnight, and just snapped lower - with the jobs data announced. The sp -16pts, we're set to open around 1545. Jobs data just came in very bad, with gains of just 88k, with a rate of 7.6%. Metals are soaring on the notion that QE won't end.


sp'60min

sp'daily5b

Summary

*see last nights closing post, for broader summary on where I think we going.
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If the count on the hourly chart is correct, then today - and possibly part of Monday, will be a minor wave'3, which should certainly be more intense than the move from 1573-1549.

Targets are...

Primary 1542/38
Secondary 1530/25

The secondary target is possible TODAY, it'd be the kind of drop that would give the bulls a bit of a scare...and might be enough to kick the VIX back into the high teens.

We shall see.

*I am heavy short from sp'1557, seeking a first exit in the low 1540s, but I intend to hold until the very late afternoon.
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UPDATE 8.40am. Amusing seeing the lunatics on clown channel so shocked and almost 'disturbed' by the jobs data.

There is a brief break in the delusion today.

It looks like we'll open in the very low sp'1540s..and I have to think we'll take out the 1538 low within the first hour or so - before intra-day bounce.

A close in the secondary target zone IS viable.


UPDATE 9.05am... the deluded cheer leaders are indeed a little spooked today.

There is NO reason the bears will not see a good down close today of 1.5-2.5%

Also..there is no POMO money to prop' up this nonsense today.
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Short..and now waiting

The signs are increasingly bearish, and both the daily and weekly charts are all warning of at least some 'moderate' downside in the days and weeks ahead. Immediate downside target is 1540/30, with a primary target into mid May of 1485/70.


sp'daily8 - bollinger/Keltner bands

sp'daily5b - best guess

sp'weekly2, rainbow

Summary

Well, I spent the entirely of today watching..and waiting. It was certainly a somewhat frustrating day at times. The opening gains looked weak, and failed as I expected...but as I also feared, there was likely to be a latter day recovery-ramp.

We did indeed see a latter day recovery wave higher...but interestingly, we didn't break the morning high of 1562.

I am now heavy short from sp'1557, seeking an exit tomorrow in the sp'1542/38 area. We could easily get stuck at the recent 1538 low.

A late day failure to hold 1538, would open up the 50 day MA,which is lurking around 1530. So...don't be surprised if sp -29pts tomorrow.


Looking ahead

We have the big monthly jobs data. It usually seems like the BLS  use a random number generator to provide data, but still..it is what it is. Market is expecting job gains of 193k, with a static rate of 7.7%. I'd be surprised if we come in anything above that.

That's all for today...I hope some of the intra-day stuff was useful. If you like my site...then all I ask, is please link to me, if you have your own blog/site!

Goodnight from what remains...an icy and snowy London

Daily Index Cycle update

The US markets saw some moderate swings, opening higher, but gains failed, and indexes were briefly red. The market closed moderately higher, with the R2K seeing the strongest gains of 0.8%. The near term trend looks weak though, and there is significant downside risk in the days ahead.


IWM

SP

Trans

Summary

It would appear - based on a wider overview of the main six indexes, that sp'1573 was the high of this very large wave from last November.

I realise there remains a risk of a last spike higher to test the 1576 high, but there are just so many bearish signs out there now, I find it hard to imagine.

Bears have....

WTIC Oil, two severe down days
US Dollar, remains strong, no sign of any major downside
R2K index - put in a high 3 weeks ago.
Transports and R2K both broken key rising support from the November lows.

Perhaps even more important, there is now a clear (MACD cycle) rollover on the weekly charts, The weekly price momentum is still positive cycle, but there is distinct weakness within it.
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*I am short from sp'1557. There is minor risk of upside Friday, but hey..no risk....no gain, right?

I can stomach a stupid gap higher into the 1564/68s, so long as it fails entirely by the Friday close.

a little more later...