Volatility confirms equity strength

With the indexes rallying for a second day, the VIX naturally dropped, and melted all the way into the close, -9% @ 15.14. Across the week, the VIX lost 7%. Near term trend looks very weak, and the VIX looks set to be trading in the 13s next week.


VIX'60min

VIX'daily3

VIX'weekly

Summary

The VIX appears to be confirming that a floor has been secured @ sp'1598. Today's VIX drop was very significant, and it does look that we'll be back in the 13s within the very near term.

I suppose we could put in a higher low - somewhere around 14/13.50, but still, with QE continuing, this market looks set for much higher levels into late June/July.

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a little more later..on the indexes

Closing Brief

The main indexes all closed higher, with the gains providing some good confirmation that sp'1598 was at least a short term low. The big issue for next week..and indeed all of June, will be can the market break the Bernanke 'reversal day' high of 1687.


sp'60min

Summary

Well, as I feared yesterday, we've seen a rather decisive ramp into the Friday close.

I wish this nonsense would unravel to 'fair value'...but no, it won't. QE continues, along with the mainstream delusion that 'everything is fine'. Until that changes, the broad trend remains...UP.
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*I hold HEAVY long into next week, seeking sp'1650/60s.

Have a good weekend
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*next main post, late Saturday, probably on the US monthly indexes

3pm update - closing at the highs?

The small 15min cycle is arguably floored, and it merely makes for a very clean baby bull flag. As is often the case in such situations, do not be surprised if the closing hour candle is a rather large spike to the upside. Bulls should be very pleased with the recovery from sp'1598


sp'15min

sp'60min

Summary

A minor down cycle to shake out the weak bulls, and now we look set for a rally into the close.

No doubt, some will still believe this is just a 'minor bounce' after the 1598 floor, but I'm guessing..no. This looks like the early stages of another significant up wave, although its still very possible we'll put in a lower high < 1687.
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Regardless, I will hold LONG indexes, into next week.

I'm pretty confident the sp'1650/60s will be hit by middle of next week. That will make for a far better exit.

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Fib chart, suggestive, next target is 1652 for Monday

I'll glad exit early Monday in the low 1650s
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Best case upside for the close 1645/47. I suppose 1652 is possible, but really, thats going to take one hell of a short squeeze to end the week.

*actually, if we saw 1650s today, I'll bail !

UPDATE 3.24pm  sp'1639...won't take much to spike this into the close.

Come on bears, start covering ..at any price ;)


3.38pm, well, VIX is melting lower (as normal)..markets trying to break higher..and I'm tired.

Its been a long week! back at the close.

2pm update - a touch of afternoon weakness

The main market is still holding broad gains of 1%, but we're still seeing a little weakness. Bulls should be seeking at least a close in the 1630s, anything >1635 would be a bonus. VIX still looks set to close very weak, possibly -10%. Metals remain sharply lower, Gold -$29


sp'60min

Summary

We are probably just still building a small baby bull flag on the hourly charts.

Target upside for Mon/Tuesday is sp'1655/60.

*I will hold index longs..across the weekend.

1pm update - minor down cycle

Main market is seeing a minor pull back, but it could just be building a small bull flag. Daily charts are turning upward on all indexes. VIX is similarly weak. Metals are still sharply lower, whilst Oil is holding good gains of 1.6%


sp'15min

sp'daily5

Summary

On the 15min MACD cycle, we've already broken negative cycle, and I'm guessing we'll level out within the next hour.

A rally into the close looks...kinda likely.
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For the bears..this is a lousy end to what - up to yesterday lunch time...was a very good week.
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12pm update - bulls appear back in control

With the sp' breaking into the 1640s, that's almost 3% higher in just 7 trading hours. The VIX appears broken, and looks set to close -10%. Oil is significantly higher, yet the precious metals are sharply lower, Gold -$30, and Silver -90 cents.


sp'60min

vix'60min

Summary

After opening moderate gains, with the market breaking into the sp'1640s, it looks like we have pretty strong confirmation that 1598 was the cycle low, and now we're headed up.

As I feared yesterday morning, the bears had plenty of time to exit, and I can only wonder at how many are now in underwater positions, and are back to 'hope' of a renewed fall.
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Laughably...and it IS a funny thought, we're already less than 3% from taking out the Bernanke 1687 high.

Once again, the mainstream will flip to talk of sp'1700s...or even higher by end year.

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*I remain heavy long the indexes.
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VIX update from Mr T.



stay tuned !

11am update - not... a failure

Well, after some rather scary opening weakness (notably in the R2K), the market is holding the gains...and building upon them. Sp'1640s now due. If bulls can manage a close around these levels, the daily charts will confirm the new up cycle at the close of today.


sp'60min

Summary

*Were I not writing here, I'd turn all this nonsense off and merely come next Monday.

I'm well beyond my tolerance levels for the market right now. Urghh
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Regardless of myself, the bulls have clearly broken above the declining triangle resistance. That is clearly a major victory, and any close >1635 would suffice for the bullish case for at least the next week or two.


Transports starting to rip

Thats the kind of move the bulls really need to clarify whether yesterdays move was a small wave higher..or the floor.
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For the record, I remain HEAVY long, I'd prefer an exit later today. I'm still marginally underwater, which is really annoying.

I will probably hold into next week.

10am update - failed rally?

The main indexes all open higher, but there are hourly black-fail candles all over the place. R2K already slipped 1% from the pre-market highs. If the bulls can't hold this market at least broadly flat by early afternoon, there is very high risk of a further wave lower, <Sp'1600.


sp'60min

vix'60min

Summary

Its become a very annoying market to end the week for those on the long side. A slightly higher open, but it is simply not decisive enough to clarify whether the 11 day down cycle is actually complete.

Bulls need a close in the 1640s to clarify matters, and right now, that no longer looks viable today.
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Pre-Market Brief

Good morning. Ahead of the monthly jobs data, futures are flat, the sp' is set to open @ 1622. Hourly index and VIX charts are suggestive of further equity upside into the Friday close, if that is the case, then the daily charts will also show a turn back upward by the end of today.


sp'60min

vix'60min

Summary

Well..lets see what the latest jobs data is..

Net gains: 175k vs 167k exp.
monthly rate: 7.6%, +0.1%

Revisions..minor
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Those numbers are arguably 'acceptable' to Mr Market.

Certainly, they are NOT high enough merit tapering, never mind that the underlying headline rate actually went UP 0.1%.
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Indexes higher on the news... Dow +50pts.

Sp' now set to open 1627/28

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UPDATE 8.55am... sp +8/10pts...looks like we could be opening in the low 1630s.


There is the 'small' potencial the current bounce is a minor wave'4, and we'll see a further drop on Monday - although not necessarily <1598.

In any case, I seek to exit longs at the open.

Follow through on Friday?

The bears hit their primary target today, but we've also seen the market close with a particularly bullish daily candle. Mr Market is now waiting on the monthly jobs data. If it likes the numbers, then the bulls are going to see some considerable upside, to end what was a bearish week.


sp'weekly7 - near term outlook

sp'daily3 - fib levels

Summary

Today was especially interesting to have watched. It was arguably a reversal day for many stocks and ETFs, and there are bullish engulfing candles all over the place.

The bulls should be seeking confirmation of an index turn tomorrow, and that IS indeed the issue. The fact we have the big monthly jobs data is ironically perhaps a good thing for the bulls. As is always the case, is it not so much the number that matters, but whether the market interprets the data to be good or bad.

After today's price action - especially in the late afternoon, I would be surprised if we don't see some significant follow through to the upside.

In terms of price levels, there is key resistance around sp'1635/40. Any opening gap over that level, and the bears are going to have a really bad day, and we might even close in the 1650s.

Of course, if the jobs data is perceived as bad, then all of today's reversal could be cancelled out. However, the charts say...no. We're more likely headed up than down, not least after what was a considerable (89pt fall) 11 day down cycle.


New highs..or lower high?

That is the big question now for the next up cycle. Do we break above the Bernanke 1687 high, and push into the 1700s...or do we get stuck somewhere between 1660/80s ?

The break in the transports weekly chart has really swayed me to assuming the market will put in its first lower high. Yet the daily fib' chart is now offering the 1740s by late July. Anyway..one day at a time.


Looking ahead

The market is seeking job gains of 167k, with a static headline rate of 7.5% That doesn't seem too bold a target, and it'd not surprise me if we see somewhere in the 190/210k range.

All things considered, I'm expecting the market to see some follow through to the upside after today's reversal. A 1% gap higher is very possible, that will get us almost to the sp'1640s. A little melt across the day, and some short-covering, and a close as high as 1645/50 is viable.
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*Something to keep in mind, there is no significant QE-pomo for the next FOUR trading days.
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Goodnight from London

Daily Index Cycle update

The main indexes saw a pretty clear reversal day, with the sp' swinging from a low of 1598, to close @ 1622. That makes for an impressive 24pt reversal. Equity bulls should now be seeking a Friday close in the 1635/45 range, which should be enough to confirm a short term floor.


R2K

SP'daily5

Trans

Summary

So...a big swing to the upside, and perhaps..the 11 day down cycle is complete. I suppose you could label this as day'1 up, although we'll only know for sure after a few more days.

As noted earlier today, the bears have had almost two full days to hit the exit button, in what was the primary target zone. If we are trading in the 1640/50s within the next few days, I can only imagine how many bears will have seen good winning positions turn back to major losses.
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*I am long (still a touch underwater), seeking an initial exit in the low sp'1640s...perhaps as early as Friday morning.

a little more later...