Volatility fails to hold earlier gains

For the second day running, whilst the main indexes battled to new highs, the VIX started to break upward..with gains of 5% in the mid 13s. Yet, as is also often the case, the VIX melted into the close, closing +0.3% @ 12.81.  The market is entirely complacent of all future events.


VIX'daily3

Summary

There is little to be said about this.

There are a few out there buying VIX 'insurance' option Call blocks for June..and even much further out, but its generally very low volume.

The majority do not expect VIX breaking above 14/15 any time soon.
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more later..on those indexes

Closing Brief

The main indexes closed moderately higher, lead by the Transports with a gain of 0.8%. The break into the sp'1660s was yet another painful reminder to the bears of the underlying power in this market. There would now seem little chance of trading <1620 in the near term.


sp'60min

Summary

Another day of new index highs. Again, most impressive was the old leader 'Transports', which broke into the mid 6500s.

Market is due a small pull back, but that is going to be very difficult whilst QE-pomo continues. Friday has a very large pomo of 5bn, so those bears expecting significant downside are simply wasting their time.

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*I am back on the sidelines after a brief foray into Oil this morning. I will look to go long Oil again tomorrow. I'm still guessing the wider commodity group will play catchup this summer.

3pm update - cooling down

The indexes are continuing to cool down, and there is no reason why we won't be trading in the low sp'1640s early tomorrow. VIX is a touch higher @ 13. Precious metals remain very weak, whilst Oil is holding flat.


sp'60min

USO'60min

Summary

Market has relentless POMO-fuelled underlying strength. That will doubtless continue into June, but for now, we do look set for a little weakness into Thursday.

Bears should keep in mind there is a very big pomo of 5bn on Friday, which also happens to be opex. Could be a bit choppy to end the week!

*with equities likely to open lower tomorrow, it would not be surprising if USO is back in the low 33s again. Perhaps even 32s are briefly viable. In any case, I'll look to go long (again) early Thursday.

2pm update - tired indexes

The main indexes are looking a little tired on the hourly charts. A little weakness into the close would be natural. There is strong rising support, which at the Friday close will be @ sp'1645, so bulls have a 12pts downside buffer. Metals remain weak, but Oil is now a touch higher.


sp'60min

Summary

Hourly charts are indeed stretched a little too far. I'd have to guess we pull back a little in the remainder of the day.

Perhaps a weak Thursday open, and then melt..all the way into the Friday close?
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*I sit on the sidelines, and look to go long Oil (via USO) tomorrow.
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AAPL remains especially weak...

The bull flag is clearly broken, but perhaps its still just a minor pull back. I do not expect new lows.

1pm update - relentless new highs

The main indexes are powering ever higher. No doubt another set of short-stops just got taken out, and those bears shorting yesterdays jump have just got nailed. Precious metals remain weak, Oil has recovered to flat (from 2% down), whilst the VIX is +4%..as people seek protection.


sp'daily

R2K, daily

Summary

The R2K is just 8pts away from the hugely important 1000 level. No doubt it'll get there...and then the 1100s..perhaps 1200s before the current hyper-wave is done.
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*I got stopped out of USO earlier for a reasonable gain. I am just concerned about holding overnight, and the daily chart is still ticking lower.

I will seek to go long USO again tomorrow morning.
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12pm update - Transports in the 6500s

The old leader breaks another new high, and is now trading in the 6500s. This is now less than 700pts from my 'best bull case'. At this rate, we'll hit the 7200s by late June, crazy! Precious metals remain weak, but Oil is recovering from the earlier decline of 2%.


Trans, daily

USO'60min

Summary

Another day of new index highs.

I have to ask, does it take 1000 POMO days for the bears to realise its pointless?

Or 10000 POMO days?

I'm starting to again think most of the remaining bears won't ever accept what continues to happen almost every day.
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*I remain long Oil (via USO), first upside target are the 33.40s. A close above that would bode for much higher levels in the coming days.


VIX update



time for lunch

12.45pm...stopped out of USO...oh well, that'll do for today.

11am update - weak metals and oil

The main indexes are down just slightly, but the real action is again in precious metals and oil which are significantly lower. Silver has taken out the recent collapse wave low, with Gold not too far behind. Oil is -2%, with Gasoline inventories up.


SLV, daily

GLD, daily

USO, daily

Summary

A relatively quiet equity market, and there is no reason to expect much from today.
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*I am long USO from the 32.90s, seeking the mid 33s as a provisional exit target. That is still viable later today, but more likely Thurs/Friday.


11.37am..main indexes again higher....Gold/Silver remain weak...but Oil looks like a floor is in.

AAPL -$10...not sure what to make of that.  weakness into opex, then up next week?

10am update - morning chop

The econ-data has been coming in rather weak today, but Mr Market is not particularly concerned by any of it. After all, QE-pomo just keeps on coming. Precious metals and Oil are seeing rather significant declines, whilst the higher USD is not helping.


sp'60min

USO'60min

Summary

Bulls have strong rising trend support @ 1635. I can't see that failing today. Sure we could see a minor red close, but underlying pressure remains UP.

A small pomo today, but still...there is a little money to keep prices propped up.
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*I remain looking to go long Oil, EIA report is at 10.30am....always better to take a position AFTER that is out of the way.
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10.03am.. USO 33.02 ...and still slipping. On the 15/60min cycles its very low, I'd be surprised if it breaks much lower.

Hard to guess if it'll ramp right on the oil report, or if a minor secondary wave lower.

Regardless...I'm looking to buy

10.26am... standing by for the oil report!  Oil itself..still very weak.


10.33am.. LONG oil, from uso 32.97

first upside target is 33.40s.   Worse case downside is 32.20s
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Pre-Market Brief

Good morning. Futures are a touch lower, sp -2pts, we're set to open @ 1648. We are seeing some very significant weakness in the precious metals and Oil again. Gold is -$18, whilst Silver -50 cents, a mere 10/15 cents from its recent collapse wave low. Oil is -1%


sp'60min

USO'60min

Summary

Those commodity falls sure are interesting.

USO is set to open -30 cents in the 33.20s. Anything below the 33s, would be a real problem for those seeking upside.

Relentless upside

Another day higher for the US equity market, fuelled by QE-pomo, and helped along by those HFT algo-bots. Mid-term outlook remains unchanged, with Trans 7200s and SP'1800s by August. Baring an end to QE this summer/Autumn, any retracements will be very minor, probably no more than 5-7%


Trans'weekly3, rainbow

sp'monthly6c, hyper-bullish outlook

Summary

Its getting tiresome, not least for someone who posts on it each day, but the algo-bot melt is merely continuing, with no sign of it ending.


The 'hyper-bullish' charts

I guess some chartists would claim all sorts of 'Elliot wave' rule violations for the above monthly6c chart, but hey, its just a 'best guess', and I don't claim to be following the 'EW book' anyway.

I had a thought earlier, in that ALL price action during QE periods should be labelled as X waves. After all, the Fed has literally destroyed all natural price discovery when its throwing hundreds of billions at the financial markets, so perhaps all such waves should be merely be labelled 'X'. or 'M' for miscellaneous.

Ohh, and I'm not kidding about sp'2500s within 2-3 yrs. Hell, that would probably be a major under-estimate if the QE continues without pause into 2016.


Oil - warning of trouble, or just preparing to 'play catchup'?

First, consider the hourly and daily USO charts...

There is the EIA report tomorrow at 10.30am. I will look to go long USO, shortly after the report is out..especially if they whack Oil a little lower. Daily MACD cycle is ticking lower, but the weekly/monthly still look a little bullish.


Looking ahead

There is a fair little array of econ-data for Wednesday morning. So, if Mr Market wants to play the game of shaking out the weaker bulls, and sucking in the most naive of bears, look for an index floor around 11am or so.

There is big pomo of 5bn on Friday, which also happens to be opex, there is simply little likelihood of any significant downside in the near..or medium term.

Goodnight from London

Daily Index Cycle update

The main indexes saw rather significant gains of around 1%. The transports remains a powerful leader, rising 1.9% into the upper 6400s. Near term trend remains very strong, and there looks to be another 7-10% viable across the next 2-3 months.


R2K - almost at 1000 !

SP

Trans

Summary

So, another day higher, one will that doubtless have annoyed a great many bears. As it looked yesterday, the Trans daily chart had a baby bull flag, and was confirmed today with a very strong gain of almost 2%. It is actually pretty amazing that we are now just 700pts shy of my 'best bull case' of Trans 7200s by August.

The Rus'2000 small cap looks set to breach the hugely psychological threshold of 1000 in the coming few days.

*I'll again note, when will the mainstream start talking of 'R2K @ 2K' ?
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Clearly, the ongoing QE-pomo is keeping a strong bid underneath most stock prices, and with no end date yet for the Fed programs, this market goes UP. Its that simple.
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a little more later...