Volatility a little higher

Whilst equity indexes broke new highs in the morning, the VIX managed gains of 6% or so, but still couldn't hold the 13s, closing +4.6% @ 13.02. Near term trend remains largely 'noise', and until VIX breaks into the 15s, all moves are...irrelevant.


VIX'daily3

Summary

Little to say, other than it remains 'mere noise'.

VIX opex is this Wednesday morning, so the bears first chance at seeing upside will be after that time, which is interestingly when the Bernanke will be speaking to the US congress.

A little VIX spike to 14/15 late Wed/Thursday?
--

*I certainly do not see any real chance of VIX spiking any higher than the 15s in the near term.

Closing Brief

The main indexes saw new highs broken earlier in the day, but slipped a touch lower into the close. Most notable event of the day, the R2K hitting 1000. Primary trend remains relentlessly to the upside, fuelled by QE, and aided by those 'we love low volume' algo-bots.


sp'60min

Summary

I'm aware of a quite a few who were particularly annoyed by today, not least those in the metals community.

How many were exiting long positions on big losses at the open, only to then see Gold/Silver (and Oil too) all ramp into the afternoon? It remains an incredibly frustrating market, not least to those who believe a 'significant' pull back is viable in the near term.

Baring an end to QE, I don't see any chance of that.
--

*I remain on the sidelines, looking to go long Oil/Silver early Tuesday.
--

3pm update - weakness into the close

The market is due a minor wave lower into early Tuesday. Primary target for a floor is sp'1650, and considering a mid-size POMO tomorrow, bulls can probably expect a latter day recovery. Metals have seen a strong reversal, but like Oil, slight weakness into tomorrow.


sp'60min

SLV'15min

Summary

The market remains a bit of a confused mess. Underlying pressure remains to the upside, but there is surely a significant likelihood of downside into early tomorrow?
--

*I will sit it out until early tomorrow. Long Silver seems an interesting trade, long Oil is currently a secondary target...but neither looks good into the Monday close.
--

3.42pm... marginal short-term pressure to the downside. There remains a 'small' chance of hitting the low 1650s early tomorrow.

back at the close

2pm update - and now the weakness

Mr Market is messing with the heads of many today, with the main indexes now swinging back to marginal red. First key support for the bulls remains around 1650. Silver/Gold are cooling down a little, but the daily reversals look pretty decisive. Oil is similarly weakening, with VIX +5%


sp'60min

SLV'15min

Summary

Getting confused yet?

With mid-size POMO on Tuesday and Thursday, default trade remains to the long side..no matter how overbought some might argue we are (as they were in February!)

*I continue to consider an SLV long, late today...or a more safer trade would be early Tuesday.

1pm update - hilarity in the metals

The precious metals saw rather sharp declines overnight, but we've seen some extremely powerful reversals this lunch hour, with Gold +$40 at one point. Silver has similarly reversed. Main indexes remain strong, ahead of Tuesdays next mid-sized dose of POMO.


sp'60min

GLD, daily

Summary

The bulls got rattled..and exited..and now the gold bears got rattled..and short-stopped out. On the 1min chart, its pure hilarity as everyone is getting whipsawed all over.

On the bigger daily charts, it does look like we have a double bottom on Gold, and a marginally lower low on Silver. Underlying MACD cycle is divergent, and suggestive of reasonable upside..at least in the short term.

I am still hyper-bearish in the mid-term for metals
--

*I am seriously considering an SLV (long) for a mult-day trade, but not until the next 15min down cycle has played out. That looks likely to take until early Tuesday..so there is NO hurry for today on that.
-

12pm update - R2K @ 1000, next stop... ?

The Rus'2000 small cap hits 1000 for the first time, the only question is whether 2000 is viable in the ongoing multi-year rally. R2K @ 2K...that IS the question. Meanwhile, the rest of the main market is seeing some moderate strength, even the metals are recovering.


R2K, daily

R2K, weekly

Summary

What to say, other than...'more of the same'.

R2K in the 1100s looks easy by August, the only issue in my view is whether 1200s are possible before some kind of 5, 7..perhaps 10% pull back.

Yet, with QE...even 5% pull back looks damn hard.
--

VIX update



back at 1

11am update - R2K..almost 1000

The Rus'2000 small cap is a mere 3pts away from the huge psy' level of 1000. Whether its hit this hour, tomorrow, or next month isn't important. What is the big unknown is how much further can it go this summer? If Trans'7000s, then R2K in the 1100s seems very viable.


R2K, daily

Summary

No reason to be short, even though hourly cycles remain suggestive of downside.

Oil has reversed, after minor 0.5% declines, its now 0.4% higher. Its another reason why its just overly risky to go short anything in the current market.

I certainly won't chase oil higher at these levels. There remains a moderate chance of downside for Oil, but I won't attempt that either. 

More than anything, bears should be in 'trading account preservation' mode.


UPDATE 11.27am  incredible strength out there everywhere now. Oil is starting to rip higher, with sp'1670s...and R2K @ 999.

10am update - hourly charts suggest weakness

The main indexes are due at least a minor pull back, but we're very likely only looking at 1%, if that much. VIX is 6% higher, but still in the low 13s. Oil is weak, -0.5%, and looks set for more significant declines later today, perhaps into early Tuesday.


sp'60min

Summary

A marginally interesting start to the week. Hourly index charts look like we could cycle lower across today, and perhaps into early Tuesday.

Bears should keep in mind, we have a mid-size POMO on Tuesday..the day when stocks only go up, remember?
--


Oscar video..



Its no surprise that he is as bullish as ever, but then..he has been right for most of the last six years.
--

Oil is lower, I may go long near the end of today... 33.60s would be the target, but that looks unlikely today.


USO'60min

back at 11am

Pre-Market Brief

Good morning. Futures are a touch lower, sp -4pts, we're set to open around 1663. Precious metals are mixed, after very sharp overnight falls. Gold is currently +$8, whilst Silver is -30 cents. Oil is moderately weak, along with a slightly lower USD.


sp'60min

sp'daily5

Summary

The bulls have very strong rising support @ sp'1650.

Considering there are two mid-size POMOs this Tuesday and Thursday, bears are going to have a real tough time just getting a single daily close in the 1640s.

Yes, we are really in overbought territory on a few cycles, but its generally going to be a rather quiet week, and that will allow the algo-bots to take control for much of the time.
--

The only bearish possibility/feature of the week is the Bernanke's appearance in front of US congress this Wednesday. Its very possible Mr Market will use him as an excuse to decline, but as noted..we have a mid-size pomo of 2-3bn the very next day.
--

*I am on the sidelines, will look to be long Oil in the days..and weeks ahead.

Good wishes for the week!