Volatility climbs a little

With the indexes closing somewhat weak, the VIX climbed across the day, closing +4.5% @ 17.15. Despite the positive close, the daily MACD cycle ticked lower for the second consecutive day, and VIX will likely be in the 14s next week, unless the Sp breaks <1608.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Equity bears should keep in mind that yes, the VIX gained 4.5% today, but it lost over 11% yesterday. With the daily charts showing momentum turning back to the equity bulls, it would seem unlikely that VIX will be breaking above the key 20 threshold any time soon.

Indeed, if sp' breaks the recent high of 1646, then VIX will be back in the lowly 14s, and it could easily remain there for the next 3-5 weeks.

Best guess remains that VIX has put in a key double top around 18.50, and is now beginning a multi-week decline..whilst equities make an attempt to break above sp'1687.

*Across the week, the VIX gained 13.3%, but the weekly candle is looking a bit spiky, and that doesn't inspire great confidence for some kind of surge into the 20s next week.
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more later...on the indexes

Closing Brief

The main indexes closed moderately lower, but certainy nothing for the bears to get excited about. The sp' closed -0.6% @ 1626. The VIX manage a moderate gain of 3.7% @ 17.02. Despite todays declines, daily charts are still swinging back to the bulls.


sp'60min

Summary

Well, another week comes to a close. Some decent volatility - for bulls and bears alike!.

Primary trend remains to the upside, and I'd expect Monday to close significantly higher, a challenge of sp'1648 is within range.
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bits and pieces across the evening.

Have a good weekend
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*next main posting, late Saturday, on the US weekly index cycles.

3pm update - closing hour upside

It would seem the market has indeed merely put in a standard 50% retrace of the Thursday up wave. Bulls should seek a close somewhere in the mid 1630s, and that will open up 1645/55 by late Monday. VIX is cooling down again, and could close slightly red.


sp'15min

vix'60min

Summary

Dare I say..broadly as expected.

Its been an okay week, and the weekend is just an hour away !
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3.01pm .. a minor down cycle. Hmm, Well, so long as 1620 not taken out, bulls have little to be concerned about.

3.15pm..choppy..and back to sp'1629.

What is clear, bears are tired. They had a good chance on Wed/Thursday, but they could not do it.

I find it near impossible to believe that Monday will be a major down day for the market. Not least with a huge QE due.

Even though the indexes are still currently negative, the daily MACD cycle is still ticking higher.

Price momentum is STILL swinging back towards the bulls.


3.35pm...market makers want to close the weekly options at SPY 163, is that it?

Generally though, its all turn into a choppy end to the week.

2pm update - target hit, now we go up?

The main indexes have seen a further wave of weakness, hitting sp'1624. Yet, if that was indeed just a retracement, then the market is set for upside into the close, and certainly, across all of Monday. VIX is holding gains of 4%, but could easily close negative.


sp'15min

Summary

Bulls should be seeking general upside into the close. Green indexes to end the week, would be a ...bonus.
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*I am long the indexes from sp'1626, and will likely hold across the weekend..unless we get some kind of hyper ramp back to 1635/40..in which case I'd close out for a day-trade.
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2.08pm market still trying to put in a floor spike, before pushing back  higher.

2.12pm.. sp 1627..and the VIX looks weak..15min cycle looks maxed

VIX to probably close red


2.27pm..well, there are the sp'1630s again. 90mins to hit the 1640s !

1pm update - trundling around

The main indexes remain moderately lower, with the VIX up a touch. Overall, the bears have nothing of substance so far today. Even if the market drops to 1625, it does little to negate yesterdays strong reversal. Metals and Oil are holding their gains.


sp'15min

Summary

I'm still looking for another micro down wave, in the 1626/24 area..before a late day bounce.
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If we don't fall anymore...I'll just sit it out across the weekend.
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SLV - which I'm short, is still building a top..

I guess I'll be holding that across the weekend!


1pm..well, we're getting another down wave.

standing by to pick up an index block (long!)

1.03pm...almost there!

1.10pm.. am Long (light) the indexes from sp'1626

on the R2K, 5min cycle, it looks floored. It appears a cleaner cycle than sp'500

I'll hold (small) index long into Monday..when there is a 5-6bn QE.


1.26pm... sp'1625..we're at the key zone.

Now, either the bears are somehow going to magically keep kicking this market lower, and take out 1608...or..this is merely indeed just a retracement..and sooner or later..we go back up.

Considering everything, I just can't see the bears managing <1608, in which case...UP.

I'll only get a bit concerned if 1620 fails this afternoon.


1.36pm...is that it?

stay tuned

12pm update - still seeking sp'1625

The market is still on track for a further move lower in this hour. There is good support around sp'1625 or so. Metals building on earlier gains, whilst Oil is slipping lower..with the main market. VIX is higher, but only 2%.


sp'15min

Summary

A simple wave'2 ABC retracement, is that it?
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I am standing by to pick up an index-long within the next hour or two, but only if we see a further small wave lower.

11am update - minor down cycle underway

The market broke a slightly new high this morning, but we're seeing a minor down cycle get underway. Primary targert is sp'1627/25, which might take a few hours. Metals and Oil both holding onto most of the opening gains.


sp'15min

Summary

Things look on track for some kind of minor retracement. Certainly, the bears shouldn't start getting excited about a major move lower into next week.

Bears had their chance yesterday...and failed.
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On standby to pick up an index-long block around sp'1625..if we get there.


11.02am..slight update.. fib' retrace updated from the spike high.

sp'1628..just 3-5pts to go.

ETA on a floor, probably around 1pm

10am update - morning weakness

The market is holding together very well, but the smaller trading cycles look due some sort of pull back across this morning A move to sp'1627/25 looks very viable, before a latter day recovery. Metals are higher, with Oil particularly strong, +1.2%


sp'15min

Summary

*consumer sentiment :82.7

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Bit of a choppy open, this could go either way.

If it goes higher, I am not chasing it.
If we trundle lower into late morning, I will look to pick up a small index-long position.

Big QE next Monday, bears beware!

*I am short SLV from 21.30s
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10.02am.. ..and now market wants to break a new high..hmm. I still won't chase this. Too much risk of a drop from here. Could easily slip lower for a few hours. 

Pre-Market Brief

Good morning. Futures are moderately lower, sp -3pts, we're set to open around 1633. Metals are a touch weak, whilst Oil is +0.5%. Japan managed a Friday close +1.9% There are four pieces of econ-data this morning, so Mr Market will have plenty of excuse to move.


sp'60min

vix'60min

Summary

A touch of morning weakness seems likely..and natural. A retracement to somewhere in the sp'1627/23 looks viable by 11am.

Underlying price momentum is swinging towards to the bulls, supported by the hourly and daily charts.
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*I will look to pick up a small index-long block later this morning. I'll be looking at the 15min index cycles.

Best guess, we floor some time between 10.30/11am, around sp'1630/25, with VIX +5%.

I expect the indexes to close at least moderately higher today, with further upside across Monday
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Video update from Mr Carboni...



Naturally he is bullish, but at least no mention of the 'new world economy' today.

Hmm,  an SLV short sure looks good on the 60min /daily charts...

 bearish pennant, set for the 20/19s  First resistance 21.20, anything <20.90 end Friday, and that will break the floor.


9.02am.  Metals snap higher on producer prices data. Silver jumped almost 3% in a few seconds!

Main Market indexes still look set to open slightly lower, with possibility of weakness into late morning.

Another failed break for the bears

Once again the bears are ending the day in disarray and with broken hopes. Instead of breaking the critical sp'1598 low, the market has put in a 'marginally higher low' at 1608, and now looks set to challenge and break the recent high of sp'1648. Poor bears, I do sympathise.


sp'weekly'8 - another higher high..before Aug/Sept weakness

sp'daily3 - fib levels

Summary

Well, this time yesterday the Nikkei was plunging..the US futures were on their way to testing the sp'1598 low, and the bears were looking forward to an exciting day.

For over four years now, such hopes have been regularly smashed to pieces..and today was just another classic instance.

Even worse for the bears, we actually opened a little lower on the indexes, with the sp' hitting 1608 in the opening 30 minutes. Those on the short side should have at least tightened their trading stops at the open..but no. I can only guess how many retail day-traders got nuked today, as they saw winning positions turn into significant losses.


Bigger picture - another higher high to come

With today's marginally higher high of 1608, I think that secures a near term floor, and the bulls are back in business. So long as the FOMC do not spook the market next week, we look set to rally one further wave higher, taking out 1687, and breaking into the 1700s.

A simple fib' extension of 1.6x - from the 1598/1687 cycle, is offering the bulls sp'1740s by late July. I think that is viable, hell, its not even 10% !

I'm then looking for a fall of around 8-10%...ironically, back to where we were this morning. Its very possible we'll then see another major wave higher, one that could take us into spring 2014.  However, that is probably looking too far out.

First things..first. Lets see how the market performs in a challenge of 1648, and then 1687.


Looking ahead

Like today, there is an array of econ-data, producer prices, current account, and industrial production. The market will probably place most emphasis though on the consumer sentiment data - consensus is for 84.5 - which is probably a bit on the high side.

There is no significant QE this Friday. However, there is a huge QE next Monday of $5-6bn, so bears should remain very cautious about shorting into the weekend.
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*My plan for tomorrow...I will look to maybe pick up a small index long block - if we open lower (for whatever reason)..and exit later in the day. I think there is a reasonable chance for a day-trade, with hourly/daily charts all pretty much back to bullish again.
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*Bonus update

With futures (as at 10pm EST) sp -10pts, we're set to open around 1626. I've added a fib retracement for today's rally, to the 60min chart...

Perhaps we'll retrace early Friday morning to somewhere in the 1627/23 zone. Further, the sp'1625 level has been important recently, it'd be a logical 'minor down cycle' floor, by 11am.

Goodnight from London

Daily Index Cycle update

The main indexes closed strongly higher, after slight opening declines. The sp' saw a very strong reversal from 1608 to close +1.5% @ 1636. The Trans and R2K closed even more powerfully higher, with gains of 1.9% and 1.8% respectively. Near term trend looks bullish.


SP'daily5

R2K

Trans

Summary

It was always a real unknown if the sp'1598 critical low would hold. With Japan getting whacked 6%, the bears would have been understandably looking forwards to today.

It sure didn't end well for the bears. With today's close, it would seem we have one of those 'marginally higher low' situations.

From here, the market looks set for at least an attempt on the recent high of sp'1687. All things considered, I think a final high..somewhere in the sp'1700/50 zone looks very viable in mid/late July.
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a little more later...