Volatility again fails to hold gains

The VIX spiked higher in the afternoon, but again failed to hold the gains, and closed -0.01 @ 16.27. Perhaps most important to recognise, was the VIX put in a marginally lower high, and with the daily chart looking maxed out, VIX could easily be in the 14s later this week.


VIX'60min

VIX'daily3

Summary

So, the second day running where we saw VIX in the 17s, but yet again, its arguably another failed spike. For the equity bears out there seeking sp'1600/1597 gap-zone later this week, this should be a real concern.

Similarly, for the equity bulls, today's lower VIX high was one of the more bullish aspects of the day.

Underlying daily MACD (blue bar histogram) cycle ticked higher again, but looks very toppy now. It won't take much for a rollover to start tomorrow or Thursday, and there is a fair way down from current levels.

There is little reason why the VIX won't be trading in the low 14s by the end of this week, and that might equate to sp' back in the 1660s.

more later, on the indexes

Closing Brief

The main indexes saw some significant weakness after moderate opening gains. Yet, as is often the case, there was a late afternoon rally, and the bulls managed to hold the key low of sp'1622. First upside for tomorrow looks to be somewhere in the sp'1650/55 area.


sp'60min

Summary

Well, I expected a pull back after this mornings opening gains, but not quite that close to what is an important low @ 1622.

It does look like we now have a classic example - just like two weeks ago as well, of a 'marginally higher low'.

Bulls should now be seeking to break outside of the triangle/declining resistance - currently @ 1645. Any break >1645 will open up a further burst higher to 1655 or so.
--

*I hold heavy long overnight, will seek an exit early tomorrow, not least if the market gaps right into the 1650s.
--

bits and pieces across the evening.

3pm update - bears into another hole?

Mr Market has really messed with the minds of many traders today. Opening moderate gains failed to hold, and we've seen some significant declines into the mid afternoon. Yet..interestingly, the bears could not break 1622. VIX similarly, put in a lower high.


sp'15min

sp'60min

Summary

My earlier target of sp'1634 was hit, and indeed, we even saw a reaction-bounce off it, but..Mr Market had another wave, and we've seen a rather swift fall to the mid 1620s.

Yet...the key low of 1622 has (at least so far) not been breached.
-

If what we have just seen was the bears best effort...the next few days are going to be a real train wreck. Or should that be..'van, car, scooter, bus, fence... wreck'?



ps. the China man...lived.
--
updates into the close


UPDATE 3.07pm... primary target for tomorrow is sp'1655.

I hold HEAVY long overnight....despite the little 'extra wave' lower, I think bulls look fine into Thursday at least.


3.18pm.... still holding together....bears look to be in real trouble.

stay tuned
-

3.25pm...any move into the sp'1632s.. will open up a little a jump higher into the close. Bears..beware!

3.33pm...snap...as expected. Lets see what those bull maniacs can manage into the close.

3.38pm.. bears should be frankly...terrified of tomorrow. First upside is a rather obvious sp'1650/55.
--

Market about to go + cycle on the 15min...and the hourly and daily charts will be backing it up into Wednesday.

back at the close

2pm update - Mr Market washing long stops?

Well, sp'1634 didn't hold, and we're now back in the upper 1620s. Bulls need a close back in the mid 1630s at least, whilst bears merely need <1622, although not necessarily today. VIX is +4%, but not yet in the 17s.


sp'15min

Summary

A red Tuesday? It won't be easy for the bulls to battle back from this. Yet the smaller 5/15min cycles are now very low, and we normally get some degree of latter day rally.

Lets see what Mr Market can do in the remaining two hours.
-

I hold...on the long side. Daily index charts look floored...similarly for the VIX..on the high side.


UPDATE 2.10pm.. sp'1625, a mere 3pts from taking out the low.

Well, if the bears are going to break to 1600, now would be the time.

sp'60min

Bulls need to hold this...or another 20pts down to go.


2.24pm.. a fierce battle now, sp'1626/27....a move back into the 1630s will probably start a short-stop cascade, and then up into the close. 


2.34pm..sp'1628...bulls should be seeking a close >1635. 

1pm update - down cycle complete?

The main indexes went moderately red..as expected. The big issue now is whether we've put in an important higher lower (>1622). If the market can claw back to flat, or a touch higher by the close, the bulls should be fine for sp'1655/60, no later than Thursday.


sp'15min

Summary

Well, the target I had has been met, and I've made my move. Now its back to the waiting game. So long as we don't go much below 1630 - and not close there, its looking pretty fine into tomorrow.
--

*I am heavy long, via IWM and MRO. Will likely hold both overnight, seeking an exit in the sp'1650s.


UPDATE 1.28pm..well, there goes the 1634 low....next up 1632/31 area. 

1.33pm...a mere 8pts from key low...

I'm still guessing we'll comfortably hold over yesterdays low.  Still a good 150mins left of the day.

12pm update - falling into the early afternoon

The main indexes have maxed out at sp'1646, and we're seeing an intra-day down cycle, but one that will probably put in the important 'marginally higher low', and thus confirming the turn - to the bulls, as seen on the daily charts. Equity bears have a real problem for a few weeks...it would seem.


sp'15min

sp'daily5

Summary

15/60min cycles still look overly high, there is no reason why we can't slip for another two hours.
-

If you look at the daily chart though, you can see the MACD cycle, its VERY low, and is now showing the first hint of a turn. Nothing conclusive yet of course...but the signs are there.
--

*I am seeking a major re-LONG, later this afternoon, with a trade aim of sp'1635/30..up to around 1655/60 by late Thursday.

I actually look to step aside, and sit on the sidelines for Friday, whilst the market battles it out over the latest disneyland bureau jobs figure.

--
BEST guess right now...we floor @ 1635/33....by 2pm..and then close flat/touch higher.


12.09pm..looks like we're in the C wave of this minor wave'2 lower. Just 4pts to go.


VIX update - (microphone string/cup ?)



stay tuned
-

12.23pm... sp'1636....2pts to go.

12.29pm.. TARGET HIT,  I am LONG IWM, from sp'1634, seeking an exit 1655/60.

Well, I suppose we could fall a little more, but <1622 seems not viable

12.46pm...long MRO.   Its trading lower today, whilst RIG is largely holding up.
--

11am update - still seeking minor wave lower

Market looks maxed out around sp'1646. There still looks like a very viable 2-3 hours of moderate downside, with the indexes a touch red by early afternoon. Lets see if we can put in that marginally higher low by the end of today.


sp'15min

Summary

As I type, market seeing a minor snap lower, and there is little reason why we can't be trading in the low 1630s by early afternoon - and that will make for a reasonable long entry.
--

*I am entirely on the sidelines,  having dropped RIG earlier for a slight gain.

Seeking to re-long RIG, and the indexes., probably around 2pm.
--

I like USO as a long..later

USO'60min

hourly cycle STILL ticking lower...no need to hurry on this one.
---

UPDATE 11.03pm..still falling. How about fib area 1632/31 by 2pm ?

 Then claw to flat into the close?
-

11.37am..nano-up cycle, but still overly weak....the low sp'1630s...look due by about 1.30pm

10am update - seeking a minor down cycle

The main indexes are moderately higher, but there is very high probability of a small down cycle by late morning. Daily charts are all showing first sign of a turn...to the bulls. A few more weeks of upside looks very viable, if not a few months. VIX is naturally lower by 2% or so.


sp'15min

Summary

Well, I think this little up move is just a bonus for the bulls to exit, and for the day-trading bears to re-short..although the latter is extremely high risk with the daily charts now on the turn.

As noted, I'm seeking a down wave, maybe 2-3 hours...and should get all the main indexes moderately red by late morning.

--
Exited RIG just earlier..

*I am looking to pick up a major index-long block, but not at current levels. Anything in the low sp'1630s is the target.

--
UPDATE 10.15am... weakness is out there..the only issue is how much. Certainly, red indexes look likely within an hour or two.

The only issue in my view is whether we close moderately weak, in the sp'1635/30 area..before another major ramp Wednesday.

10.55.... WHACK !  top is in for the morning..now we fall.

Pre-Market Brief

Good morning. Futures are flat, sp' is set to open at 1640. The USD is a touch higher, and the precious metals are lower by around 1%. The smaller 15/60min index cycles are mixed. Early morning downside into the low 1630s seems likely, but then higher into Wednesday.


sp'15min

sp'60min

Summary

So, we're likely to open flat. 15min cycle would suggest we can go lower into late morning, whilst the hourly cycle is inexorably pushing higher.

I expect the 1650s to be challenged today or tomorrow, and I expect that resistance to be broken through.

Today is indeed a Tuesday, and its also a mid-sized QE of 3bn.
--
*I am Long RIG - I might drop that at the open, and will look to re-long via RIG and an index later this morning.

Daily charts will likely show a turn/levelling phase by the close of today, so long as we don't make a new low... <1622.

Transports hold the 6200s

The bears managed only moderate follow through from last Friday, and it would seem the Transports has held an important line today. The weekly tranny chart is still broadly bullish for another few months. Primary upside target remains the low 7000s


Trans, weekly'3, rainbow

sp'daily3 - fib levels

Summary

The Transports came very close to breaking key support earlier today, but the daily close - a fall of just 0.03%, was a rather bullish sign.

First immediate upside target for the bulls should be the recent high in the mid 6500s. A weekly close (some time this month) >6600 will be VERY bullish, and a warning that the main market might see another 10% higher across the June-August period.

--
Daily Fib' chart, extrapolating from 1622 to 1687, a 1.6x jump is offering sp'1728 or so within the next month or two. Even that might not be the high. Trans 7000s, almost certainly equates to sp'1750, perhaps the low 1800s.

--
**Bonus chart, sp'15min

Something I am keeping in mind for tomorrow, perhaps we'll see a minor morning drop, 1635/25 - putting in an important 'marginally higher low', and then RAMP rest of Tuesday/early Wednesday - with ADP jobs data?


Looking ahead

There isn't much in the way of key data tomorrow, just intl.trade data, and the market never cares about that. Market will indeed be more focused on jobs data due Wed-Friday.

My plan? I am merely seeking to pick up another index (long) position, on the next 15min down cycle. If we open lower, I'll probably go long very early, probably 10-11am.

*I do think we'll get a 10% down cycle, just not yet. In the meantime, even a permabear can make some $ on the long side, yes?

Goodnight from London

Daily Index Cycle update

The main indexes saw a choppy Monday, but once again saw a latter day rally, with the sp' closing @ 1640. The bulls are just 10pts away from breaking triangle resistance, and that opens up a challenge of the Bernanke 'reversal day' high of 1687.


sp'daily5

R2K

Trans

Summary

So...the main market saw one of its usual latter day recovery ramps, and we have the sp' closing 18pts above its morning low of 1622. That's a pretty impressive close, but the bulls should be seeking a Tue/Wednesday close in the 1650s.

I have to guess, they'll surely get it, if not even the 1660/70s by the Friday close.
---

However, there is a significant chance we'll be (briefly) trading in the 1620s again early tomorrow, but even if we do, the bulls will very likely be stronger than today.

--
*I am largely on the sidelines, seeking to pick up an index (long) block early Tuesday.

a little more later...