Volatility falls into the weekend

Despite the main equity indexes remaining weak across the day, the VIX still failed to close with a gain, making five consecutive daily declines. The VIX closed -1.5% @ 12.06. This remains a market that is utterly complacent, despite a great many looming threats.


VIX'60min

VIX'daily3

Summary

So, the fifth daily decline in a row, and the VIX is back on the border of breaking into the 11s. Its truly incredible. I  have to wonder again, just what is necessary in order that the VIX break into the 20s again?

Underlying MACD (blue bar histogram) did turn up intra-day, but by the close, it was still ticking lower.

I'd have to believe, we'll see a conclusive VIX turn to the upside by next Tue/Wednesday at the latest. First target is a very reasonable 14/15.

What will indeed be difficult, is to break into those upper teens, and more importantly, the big VIX 20 threshold.

a little more later, on the indexes

Closing Brief

The equity market held together very well considering the commodity carnage today. The precious metals and Oil market saw very sharp declines of around 5 and 3% respectively. Hourly charts are suggestive of a sub'2 bounce complete..with a gap lower at the Monday open.


sp'60min

Summary

Well, its been a long week, so I'll keep the closing updates this evening..brief.

Market failed to get the close in the 1570s I had hoped for.

Yet, we have the Oil market smashed, ...Dr Copper is weak, and the precious metals have collapsed through support. The deflationary doomers have some serious stuff to think about this weekend.

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Considering everything..I'd be surprised if we don't start next week at least opening 'somewhat' lower.

*I hold USO (short) into next week.

Bits and pieces to conclude the week, across the evening.
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Have a good weekend

3pm update - 60mins to fall 4-5pts

The bears need to see the weekly rainbow chart candle turn back from green..to blue. Its a purely technical issue..and some might argue again it..but that's how I see it. A close in the 1570s is the target. VIX looks like it has upside into the close.


sp'60min

vix'60min

Summary

Here is the all important weekly chart...

One hour to go..lets see if the market sells into the close.

I have to think so, with the 15min index and VIX cycles as they are.

*I am re-short Oil (via USO)..and will into Monday.
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3.06pm...as things are..Daily MACD cycle still ticking higher on indexes..but is now also ticking higher on the VIX.

So, bears have the VIX on their side now....just need that close <1580.

3.19pm...sp' challenging the now declining hourly 10MA.

A close in the 1570s...no..thats now out of range.
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Oil..and the previous metals look very weak.
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3.28pm... Gold snaps lower..again..now down $70/75...Silver following..along with Oil

*hourly index charts still look like a wave'2 up...with a 3 down early Monday.

with the VIX this low, I have to think Monday will open very well for the bears.

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3.37pm...behold...the horror of Gold. Closing the week with a horrific snap through support.

Target is 120.....so thats a good $250 down for Gold (spot price)..across the next few months....with SLV 20/19.
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Well, we're clearly not going to close in the 1570s..and thus the sp' weekly 'rainbow' chart will close with a bullish turn. R2K, Transports, are blue though..and as old leaders, bears should hold onto that thought for the weekend.

back at the close.

2pm update - two hours...to close in the 1570s

The market remains holding together, and the Dow is only 20pts lower. The next two hours will be critical for how the weekly charts close, and for some of the chartists out there...sp'1570s remain..important. VIX is higher, but only 2%


sp'60min

VIX'60min

Summary

Market is just 10pts from the recent highs..and with the hourly MACD cycle as it is, its a tricky situation for the bears.

It does seem like 1597 was the high of this cycle though, and the daily MACD turns are starting to confirm it.

*USO is trying to ramp..a re-short...into the close in the low 33s would be sorely tempting, even though I was earlier looking to wait until Monday. Hmm


2.08pm... seriously looking at a USO re-short into the close.

With VIX low..and equtiies seemingly maxed out at 1597...I'm reasonably confident with a re-short of this one...

Standing by...

UPDATE 2.24pm...am short USO....will hold across the weekend..seeking an exit in the low 32s at the Monday open.
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VIX looks floored.
Indexes look like they could rollover into the close.
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2.33.pm...its very subtle so far.. but it looks like I was right. Indexes starting to break, VIX ticking a touch higher..and Oil snaps lower.

You can see it on the VIX'15min cycle...

it wants to push higher.

1pm update - bears need to keep a lid on this market

The market looks prone to moving higher in this hour, with the 15min cycle due to jump. The hourly charts are similarly looking very prone to the usual 'latter day recovery' nonsense. Bears need to make a stand here.


sp'60min

Summary

We're seeing the market try to battle higher.

I suppose 1590 is viable...by 2pm..and we could still close in the 1570s..but that sure looks...difficult now.

VIX is higher, but showing no real concern in the market

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I'm kinda tired. urghh...updates....when...i'm not keeling over.


 UPDATE 1.15pm...I'd like a HEAVY re-short in Oil - via USO, next Monday, in the low 33s,

Target exit would be 31/30 by end of next week.

*Gold, Silver charts look broadly the same..looking for Monday jump..and I'll just short it.


1.34pm...sub'wave'2 of this move lower ? A 3 into the close? Hmmm

All those seeking the 1570/60s into Monday had better start their prayers about now.

12pm update - eyes still on a close in the sp'1570s

More than anything, equity bears should remain focused on getting a close in the sp'1570s. Not only would it solidify a turn to the downside on the daily charts, but the weekly charts will flip from bullish..back to a neutral/turn state. A close in the 1570s are so very important!


sp'60min

vix'60min

Summary

Suffice to say, we're still not seeing much power in the bears..yet. A weak afternoon..and moderate declines into the upper 1570s remain 'best case' I think.

Precious metals and Oil will be the talking point of the weekend....but more on that later.

*I exited USO (short) at the open, and will sit back until Monday, where I will seek a major re-short.

time for lunch

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VIX update....



back at 1pm

11am update - Precious metals massacre

Whilst the main equity indexes are holding moderate declines, the real action is in the precious metals, which have now taken out key support. There is empty air on Gold of $250/300 to the downside, and $6/7 lower for Silver. Copper and Oil are similarly sharply lower.


Gold, weekly

SLV, weekly

Summary

Without question...metals are arguably to be shorted for weeks..if not months to come. Huge downside ahead...and we have backup support via the Copper and Oil weekly/monthly charts.
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A chart I will highlight into the close...sp'weekly2, rainbow....

Currently still green, need 1570s for it to go back to blue! Its pretty important!
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VIX'daily3

We have a daily MACD cycle turn UP. This is good, and bears should look for the index MACD cycle to show a similar turn by the Friday close or early Monday.

UPDATE 11am...

We do also now have a MACD cycle turn DOWN on the indexes!

I still want to see a close in the sp'1570s to get those weekly charts back to a turn configuration though.

UPDATE 11.09am... rainbow chart for sp' goes back to BLUE !!!!!!!!!!!!!!!!!

10am update - tough battle to break 1580

The main indexes open moderately lower. Notable movers are the precious metals and Oil which are sharply lower. USD is a little higher, and that's not helping the US markets. VIX is only up 2-3%..and clearly...this market still remains fearless.


sp'60min

vix'60min

Summary

So..nothing dramatic..and its clear..bears have a mighty battle today to get a weekly close <sp'1580 - which is where the weekly charts flip back from what are currently renewed bullish outlooks.
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*I exited USO (short) at the open, am sitting back now.
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A close under sp'1580 is so important..lets see if the bears can build downside momentum across the day.

Considering the opening 30 minutes though..it ain't looking good for the 1570s. Maybe a secondary/late day decline?

10am..consumer sentiment 72.3... disapointing..and market slips a bit.

GOLD breaks the Dec'2011 low..and there is now empty air of at least $100 downside.

*stockcharts is NOT showing it, but GLD was trading <148.27..and hit 148.11 just now.
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maybe it will be bearish morning after all?


UPDATE 10.23 am..

Oil remains one of two key things to watch for the much awaited second deflationary collapse wave.

USO (Oil) remains on the edge of breaking through a giant wedge/triangle...which as many realise..Copper did a few weeks ago.

back at 11am

Pre-Market Brief

Good morning. The econ-data has just come in particularly disappointing, and the market is on the slide. Futures are sp -8pts, we're set to open around 1585. Precious metals have collapsed, with Gold coming within $1 of taking out the 2011 low. Oil is similarly sharply lower.


sp'60min

sp'daily5

Summary

*as noted last night, bears need a weekly CLOSE back in the 1570s.

This is exactly the start I was hoping for, but how we close is infinitely more important.

Good wishes for the last day of what has been a difficult week in bear land.
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more on the precious metals...soon

*I need to correct something. Gold has NOT yet taken out the low from Dec'2011...

GLD, weekly2,

 In pre-market (so far)..GLD hit  148.34, thats 70 cents from the critical low.
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USO (Oil) is set to open -2%, right on my exit target of 32.80s

This is good, and I'll look to kicked at the open.
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UPDATE 9.18am  sp-6pts right now, and its clear, the bears remain WEAK. A close -1% is going to be real tough.

Nevermind the issue that the old resistance high of 1576 is now going to be support, and I sure don't think we can close under that today.

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9.32am...exited USO at the open...very pleased, and a good way to end the week.

I will note, I do expect VERY significant further falls in Oil in the weeks ahead, but I'm just trying to trade it day to day.
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Bears need a weekly close in the sp'1570s

Another day higher for the main indexes, and if we close the week above sp'1580, it will break the recent 3 week run of blue warning candles. All those seeking a multi-week down cycle, should look for a decisive Friday sp' close -1% or so, back into those 1570s.


sp'weekly2, rainbow

sp'daily3 - fib levels

Summary

More than anything tomorrow, bears should be seeking a weekly close back in the sp'1570s. This would flip the 'rainbow' weekly charts back to their provisional warning status.

*I will note that the Trans, R2K, and NYSE, are STILL holding blue candles, whilst the headline indexes - Dow, SP, and Nasdaq are green.
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The Fib' chart is again updated, and now the primary target is raised to sp'1500, with the 1485/75 zone a very valid secondary target.  Right now, the notion of breaking into the low 1400s in May..seems very unlikely.


Looking ahead

We have a fair little array of econ-data tomorrow morning. There is the big retail sales data, but there is also consumer sentiment, business inventories, and also producer prices. There will also be some earnings data.

So lets see how Friday goes. I can't emphasise enough how important it (arguably) is, for the bears to see the market close the week on a down note in the 1470s.

Goodnight from London

Daily Index Cycle update

The main indexes closed somewhat mixed. The Sp, Dow, and R2K both closed around 0.3% higher, but the Transports actually closed -0.3%, with the Nasdaq almost flat. Near term trend is still to the upside, but this four day ramp is surely in the final phase.


IWM, daily

SP'daily5

Trans

Summary

So...another day broadly higher, but the gains were only moderate today.

The sp' hit a high of 1597.35, and that will now be the big number for the bears to dwell upon overnight. Was that the high of this near term cycle..or perhaps even a multi-month high?

The underlying MACD (blue bar histogram) ticked higher for a 4'th/5th day for the indexes, and there is no sign of the current up cycle ending.

What is clear from the bigger weekly charts, bears need a Friday/weekly close back under sp'1580. That is not even 1% lower, so its well within range, and with the hourly charts as they are...Friday morning (when we have some econ and corporate earnings data) will offer some chance of breaking back into the 1570s..if 'briefly'.

a little more later...