Thursday, 16 May 2013

Volatility climbs a little

With the main US indexes rolling over in the closing hour, the VIX managed to claw a little higher, +2.0% @ 13.07. Daily charts are offering a moderate VIX snap to the upside within the next 2-3 days. However, it would be surprising if VIX can put in any daily closes >15.



VIX remains at bizarrely low levels, and even a 10% up day would do very little, and we saw plenty such days in April, only to end back in the 12s.

The ultimate doomer bear target remains a weekly close above the 200 weekly MA, which is still around VIX 21, and I sure don't think that's likely any time soon. Months, perhaps even a year.away.

more later, on the indexes.

Closing Brief

After what was a very quiet day, the closing hour finally saw some price action. The transports lead the way lower, slipping -0.8%, with the sp 0.5% With the USD clawing back earlier declines, the metals and Oil also started to lose some of their moderate gains.



An interesting closing hour, but we STILL remain within the broad uptrend.

Bears need a close <1640 tomorrow, and I find that difficult to believe, not least since its a 5bn pomo day.

*I hold SLV short overnight, seeking the 19s, although I realise that is a very bold target. Weekly/monthly charts do support it though.

more later..on the VIX

3pm update - old leader to lead lower

The transports is moderately lower right now, -0.4%. Certainly its nothing of significance, but it could be the very first sign of at least a few days of downside - although that seems more likely to begin after Friday opex, which is a large pomo day. Metals are holding together, Oil is showing some strength.



Perhaps a little weakness into the close, we're sp'1657 as I type, 1652/50 at the close?

*I will hold SLV (short) overnight,  am content with my entry, a touch under 22.00. Target are the 19s. Monthly charts suggest even lower levels this summer.

UPDATE 3.15pm..Transports -0.6%...with sp'1654.....a close <1650 would make things interesting for early tomorrow..before the pomo $ kick in.

3.28pm Trans -0.9%, sp'1651....a sub 1650 VERY viable.

Metals and Oil still holding earlier gains. I will be looking for a stronger USD in the coming few days.

3.38pm..there go the sp'1650s...and the USD is back to flat, after earlier declines of 0.4%

Metals start starting to show a little weakness.

A little price action in the closing exciting huh?

2pm update - tired indexes

Tis a quiet day before May opex. Sp' looks stuck, just under 1660. First soft downside support is the rising daily 10MA of 1635, which will be another 5pts higher by the Friday close. Despite the big pomo tomorrow, will the market makers be able to knock prices lower for max-pain?




It continues to be a rather quiet Thursday. Not much of anything going on.

I remain intrigued by the VIX daily chart though. Underlying MACD cycle is due to go positive in about two days..and that is where we would normally see some degree of index downside.


*I am short SLV, from just a little earlier, a touch under 22. Target is..19. All main cycles are ticking lower, and the 15/60min charts are now arguably ready for another wave lower.

Regardless, I hold short SLV overnight..and probably into early next week.

2.32pm...Transports is starting to rollover, not much, just 0.35%..but it could be the start of something across the next few days.

Precious metals and Oil so far holding together

1pm update - quiet day

The main indexes remain very muted. Hourly index charts remain suggestive of downside into Friday, yet Friday is a large 5bn QE-pomo day, and its opex of course. Metals are trying to battle higher, along with Oil, the lower USD is still helping.




Quiet day.

*Oil doesn't seem worth chasing higher right now.

I am on hold to launch an SLV short later today. Anything in the low 22s looks a viable level. First downside target would be 19.

UPDATE 1.26pm.. am short SLV from 21.95.

I'm certainly curious as to how the next few days play out in the metals..could be interesting.

12pm update - green indexes..again

The market is holding slight gains after what was a muted morning.  USD is weaker, which is probably helping give the precious metals and Oil further upside. Daily VIX chart is warning of possible index downside for Friday/early next week.




Another rather quiet day overall. AAPL has seen a rather strong reversal, from -$8 to +$8. Where do the market makers want to pin that stock tomorrow afternoon ?

*I am very tempted to launch an SLV short later this afternoon. ALL cycles are ticking lower..daily, weekly, monthly.

Huge overnight downside potencial into next week.

I'm guessing a bear flag, maybe 2/2.30pm shorting time.

VIX update...

back soon

11am update - metals and oil, minor bounce

The main indexes are rather muted this morning. After rather sharp pre-market falls of $15, Gold has largely recovered, and Silver is actually a little higher. Oil is similarly higher. No doubt the weaker USD -0.35%, is helping to kick the commodities upward.




Underlying pressure is slightly to the downside today, for the indexes.

VIX daily chart is warning of a possible little spike tomorrow/Monday, but we might only be looking at 14/15s..if at all.

The fact tomorrow is opex, with 5bn pomo really messes things up for those bears seeking downside.

*I'm leaving USO along right now, I'm certainly not chasing it higher.

SLV is a tempting short on the next 15min down cycle, which might start later this afternoon.

10am update - morning chop

Main indexes are mixed. Precious metals remain weak, although Silver looks like it might turn positive this morning. Oil is moderately higher, but the smaller 15/60min cycles all offer weakness as the day proceeds. VIX daily chart is warning of index downside into Friday.




Hourly charts look.. VERY tired.

Best bear case is a close in the low sp'1640s. So, in theory we could close -15/20 pts today.

Yet, tomorrow is opex, 5bn pomo. I would be very surprised if we see two major down days in a row.

*Oil swung around in pre-market, and is trading moderately higher. I certainly won't chase it higher.

Pre-Market Brief

Good morning. Futures are flat, we're set to open around sp'1658. Yet again, the real action is in commodities, with the precious metals sharply lower, Gold -$16, Silver -15 cents. Oil is also a little weak. An array of econ-data is due across the next few hours.



Well, futures are indeed flat. The smaller 15/60min cycles are certainly suggestive that we'll slip lower this morning. Whether that last into the afternoon is too difficult to say.

Tomorrow is opex, and its also a very big pomo of 5bn.
*I seek to go long Oil again, later this morning.

Update from Mr Permabull...

As ever..updates across the day

8.33am... econ-data not pleasing the market. Sp -5pts, 1653

USO is -11 @ 33.50.. I think it might get to the 33.20s again by 11am, which is where I will be looking to pick it up.

Transports, 700pts to go

Another day higher for the US equity market, and almost another full percent higher for the old leader - the Transportation index. We're now in the 6500s, a mere 700pts shy of my primary target - 7200s. The time frame remains August, and we're currently ahead of schedule.

Trans'weekly3', rainbow

R2K, weekly


So..another new set of index highs for the US markets. No doubt a lot of bears are now upgrading their near term upside targets to the low sp'1700s.

I suppose we might get stuck in the low/mid sp'1700s, but I'm going to stick to the Transports as my guide post. I have to believe Trans will break into the low 7000s before the current hyper wave is done, and for me, trans 7200s would equate to sp'1800s.

Even then, baring an end to QE, I can't see downside of more than 5-7% in the next wave - which might still be a sub wave of a relentless larger wave'3 (see monthly hyper-bullish chart from yesterday nights closing post).

Oil - still seeking upside.

I went long Oil (via USO) this morning, that worked out rather well after just a few hours, and I was stopped out.

I look to go long again sometime on Thursday - ahead of the big Friday POMO. I suppose the USO 33.20/10s are possible early tomorrow, but it will probably need some equity weakness - with the sp in the 1640s for that.

Looking ahead

There is another little array of econ-data for the market to deal with tomorrow. The usual jobs data, some housing, CPI, and also Phil' Fed survey.  Perhaps some of it will be enough to knock the market 0.5 to 0.75% lower by late morning...before the algo-bots melt it all back upward.

That's all for today...

Goodnight from London

Daily Index Cycle update

The main indexes all closed moderately higher, lead by the Transports, with gains of 0.8%. The sp' close of 1658 was another strong reminder of the underlying strength in this QE-fuelled market. Near term trend looks extended, but there is strong rising support, barely 1% lower.





Another trading day that many bears will want to forget. There were a great many out there with ceiling targets in the sp'1640/50 area, and those ALL got taken out today with the brief break into the 1660s.

We are clearly in an accelerating up channel, lead by the transports. Weekly tranny chart suggest the low 7000s, which is a good 10% higher, and that would equate to sp'1800s by late summer.

Trading volume remains light, but since when did that matter? There is big QE-pomo this coming Friday, which also happens to be opex. Bears beware!

A little more later...