Monday 8 April 2013

Volatility starts the week in the red

US equities saw a rather typical latter day recovery, and closed moderately higher. Naturally, the VIX slipped into the close, settling -5.2% @ 13.19. If the indexes are maxed out, then we should see the VIX start to battle higher, and break into the 16/17s by Wed/Thursday. 20s still look out of range.





For the bears, today was indeed a rough start, and that's on top of the lousy end to last week.

However, sp'1560s were always a threat, and seeing the close of 1563 was not exactly a surprise.

What is now paramount for the bears, to contain the indexes at current levels, and most certainly, NOT see any further push higher into the 1570s again.

Best guess is that we won't break new index highs, and indeed, as the week proceeds, we should see some real dynamic upside VIX movement.

The big VIX 20 threshold still looks an insurmountable level though. Only if sp' <1500, can I see VIX 20s occurring, and even then, it'll be difficult.

more later..on those indexes

Closing Brief

The market opened a touch weak, but with powerless bears, the market rallied to what is a natural resistance barrier in the low 1560s. We're now within 1% of the cycle high, and its understandable for those not following the weekly charts, that they might think new highs are coming.



So..we indeed closed @ 1562.

Re: the count.

I remain VERY unsure how to count the current nonsense. Fridays big gap lower was certainly the strongest down move since the 1573 high, but it doesn't really count well as a third wave, not least since it had no follow through.

Regardless, I'm calling Friday low as a wave'1, with today's close - and including perhaps minor Tuesday upside as a 2'.

Lets be clear...

Bears MUST take out the 1538 low in the next down wave. I suppose we could chop around sideways for a day or two, but whenever the next wave starts, bears had better be trading in the low 1530s..if not the 1520s.

VIX remains remarkably low, and there is very considerable upside available across this week.

*the usual bits and pieces across the evening.

3pm update - almost there

As expected, the bulls are being given Monday as a freebie. Bears are powerless, and we're seeing a natural bounce back to the key resistance zone of sp'1558/62. Whether we see a little further melt higher into the close seems irrelevant. What is paramount, bears must smash this market lower <1538 in the next wave.




VIX is especially showing the weakness what remains a fearless market.

After all, there is nothing to be concerned about, right?

Especially not the April'10th deadline for 'diplomats to get outta there'..from North Korea.

All is well.

updates into the close.


The bears should aim for another close under the 10MA of 1560. Thats viable, not that it matters 'that much'.

SP' remains the second strongest index (Dow is still first), and is clearly still  holding within the November up channel.

Bears need some good closes in those 1530s, preferably 1520s to make it conclusive, although I already think it is.

3.15pm...I don't know how you people wanna count this nonsense, but whatever it is, we shouldn't be breaking anywhere above 1563/64.

Wave'1 down was Friday..and this was a 2 bounce wave?


Bulls should be praying for some kind of miracle gap over 1573 at the Tuesday open. Even then, the weekly cycles are still rolling over.

3.23..starting to look like we're getting real stuck in the 1556/58 area.

Anyone going short here, moderate risk of Tuesday gap up to 1562/64, before reversal. For those playing big money on the indexes, we're only talking a short-stop of 1% @ 1573 though.

3.40pm...well, the 1560s have been hit..this is about as far as I want to see. Any close >1562 will be a real threat to bears.

Just think, we're only 13pts from the cycle high, but then..thats the QE-POMO kicking in..aided by the algo-bots.

1pm update - baby bull flag...looking for 1560s

With an utter lack of downside power, bears are unable to push this market lower. A latter day recovery melt into the low 1560s looks viable, if not likely. There is a clear baby bull flag on the hourly index charts. Bears are probably going to be suffering until Wednesday.



Its getting back to the usual dull nonsense again.

Algo-bot melt into the afternoon, and why wouldn't it?

The bigger picture IS clear though, we're going lower across the weeks to come, but in the meantime, we have to put up with this.

*maybe just turn your screens off until FOMC minutes issued, Wed, 2pm ?

update 2.25 pm....well, the bull flag confirmed.

No sign of a turn/levelling phase yet.

Bears going to in pain until late Tuesday..or even as far out as Thursday.

What is clear, the next down wave MUST break 1538...which I'm guessing it will.

12pm update - 1562 before 1538 ?

There really isn't much going on today, and the morning action is indeed just minor chop. The only issue is whether we see some algo-bot melt this afternoon - into the low sp'1560s...before the next down cycle. The notion that 1573 will be exceeded..seems borderline crazy talk.

sp'daily5b - best guess

sp'weekly2, rainbow


I thought I'd highlight the weekly chart, since its a fair reminder that we ARE still building a top. This weeks candle looks set to close blue or red. I just can't envision another lurch higher.

As I called it last week, the top is least for 3-4 months.

Bears need to be patient, and obviously, the big short-stop line is 1573/74

Time for lunch

VIX update..from Mr T

back later

11am update - morning chop

The market is somewhat weak, but again the bears don't have any power. A real problem will again be the 'traditional' latter day recovery, on what is a moderate QE-POMO day. sp'1562/64 is a viable bull target. Bears might have to endure that...before a move to break the 1538 low.



*possible mini H/S setting up...with the LS, from March'15.  (not indicated on chart)

Considering the big weekly charts..this market is clearly maxed out. Its just a matter of bears building some downside momentum  Its exhausted. We ain't breaking the 1573 high.

I remain short, and seeking an exit around 1535/30. Right now, that seems not viable until late Tuesday, or even Wednesday.

11.05am...something to keep in mind...

sp60min'2, those bull maniacs are going to find it real tough to break the upper bands @ 1562.

unless you think we're going to new highs...this is all still looking okay for the bears.

10am update - the Permabear is NOT for turning

Good morning, and welcome to what should be a week that confirms we are in a multi-week downtrend. Indexes open a touch weak, VIX is a touch higher. VIX looks set to close at least somewhat higher. Metals are weak...Oil is holding far.




re: 60min count. Yes, I realise the 4 waves overlap, but I'm really not sure what to make of the micro-action right now.

Until we're below 1538, bears have a problem, but I'm very confident we can do it...quite possibly today.

VIX hourly chart offers some significant upside by the close.

*The Death of Thatcher is something of a  big deal for those in the UK today.

She was arguably the one real capitalistic leader the UK saw in the post war period. Liked by many...hated by many...she will be remembered for a very long time. More on that later, maybe.

..updates across the day. looks weak...a test of the 1540/38 area looks viable.

Biggest tell right now is the VIX, which looks like it has a lot of potential for upside into the 16/17s.