Volatility falls into the weekend

With price momentum generally starting to swing back to the bulls, the VIX significantly cooled down, closing -7.8% @ 18.90. A gap-fill in the upper 16s looks very possible next Mon/Tuesday, before a further surge into the mid 20s, possibly low 30s, with sp'1550/30s.


VIX'60min

VIX'daily3

VIX'weekly

Summary

For the equity bears, it was a relatively good week. Perhaps the most important achievement was the VIX breaking back into the 20s - for the first time since last December.

Even though the VIX closed the week somewhat weak, that is arguably an understandable retracement.

A further VIX decline seems likely early next week, before a much stronger surge, whilst the sp' declines to 1550/30s - which does indeed appear possible as early as the latter part of next week.

more later...on the indexes

Closing Brief

The market saw chop for much of the day, with a somewhat surprising new cycle low of sp'1577. However, the index hourly cycles floored by late morning, and we closed the week significantly above the lows. Seeking Monday bounce, before severe falls later next week.


sp'60min

Summary

...and another week comes to a close!

Congrats to those bears who shorted the Bernanke this week, and who have cashed out into the weekend.

Another much stronger down wave looks likely later next week. Best guess, we see a bounce to sp'1620s by late Monday.


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

3pm update - closing hour moon ramp?

Despite a good few hours of chop, the market looks set for a closing hour moon ramp.  First upside target is sp'1600, but a close in the 1608/10 area is very viable. VIX is weak, and could easily close lower by 10% or so, the upper 16s seem possible by late Monday.


sp'60min

Summary

Its been a good week for the bears, but hourly charts are highly suggestive of upside into the close, with a large gap higher on Monday.

The utter irony of my week is that all my gains were made on the long side. A twisted world indeed.
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3.33pm.. sp'1598...we're on track for 1620s on Monday !

3.48pm... sp'1591.. a touch of weakness, but really, bears have no reason to be short into next week.

back at the close

2pm update - choppy, but climbing

The market indexes have broken out of their extremely steep down channels, and a bounce is underway. We've already broken marginally about the hourly 10MA @ sp'1593. VIX is cooling down, and looks set for a gap fill in the upper 16s on Monday.


sp'60min

vix'60min

Summary

Suffice to say, its looking good for 1620s by late Monday.
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*I exited a small index-long position @ sp'1594 a little earlier, and  that concludes my week.

1pm update - bounce appears underway

Market is making an attempt to clear the important (still declining) hourly 10MA, currently @ 1594. Hourly index charts offering significant upside into the 1620s by late Monday. Bears had a bonus opportunity to exit this morning.


sp'60min

Summary

We'll probably have a clear breakout by 2/3pm, at which point we might be making a play for a weekly close @ sp'1600

At the current rate, the MACD will go positive cycle early Monday.

*I am holding a small index-long from earlier, and would likely exit by the Friday close, if we are >1600.


1.14pm..well, we've broken out of the down channel, and we're testing the 10MA.

I'm guessing we will break above it..and that opens up 1608/10 by the close.

However, with it being opex, market makers might simply want to pin everything @ sp'1600


1.20pm.. EXITED minor long @ sp'1594, for rather nice little gain.

My week is done, no more trades for me this week :)


VIX update from Mr T.




Stay tuned

12pm update - still waiting for a bounce

The main indexes have slipped again in late morning, breaking into the 1570s, which is some 77pts lower than earlier this week. Hourly index cycles are deeply oversold, and it is likely just a matter of hours before the market can solidify a short term floor.


sp'60min

Summary

I am seeking a break above the declining hourly 10MA, and that will open the door to 1610/20.

Interestingly, the 61% fib retrace is now at the lower gap area of 1625. and that 1625 level has been a price-cluster zone for the past few weeks.
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*I hold a small long-index position from a little earlier, seeking an exit >sp'1600.

11am update - minor down cycle to rattle the bulls

Market has seen some weakness to rattle the weaker day-trader bulls out. R2K and Trans have made new lows, but sp/dow held. VIX remains slightly red, and broad targets remain unchanged, with a bounce to sp'1620s by late Monday.


sp'15min

Summary

Its probably important to keep in mind, its quad-opex, could be a day of chop...although hourly index charts are now ticking higher..underlying pressure is to the upside.

Being short right now..seems crazy. Very significant upside risk.


UPDATE 11.09 am.. am 'minor' long the indexes from sp'1588

The small 5/15/60min cycles all look floored now, and there is reasonably upside to 1600 again by end of day.


sp'60min

Looks okay for upside into Monday


11.30am..hmm, well, another small wave lower to 1580, a mere 5/10pts away from where many were seeking a lot. Hourly charts still look exhausted on the downside.

Bulls just need to break above the hourly 10MA, currently 1596

10am update - opex chop

Market is seeing moderate gains, but even if the sp closes +15/20pts, it doesn't do much to negate the post FOMC declines. A bounce to 1620/25 looks very viable by late Monday, with VIX in the 16s. Metals are holding gains, but Oil is now showing weakness.


sp'15min

vix'60min

Summary

So, bounce is underway, after what looks to be a very clean '5 little waves down' forming sub'1.

A two day bounce seems more likely than just one, based on previous cycles, and the fact underlying trend does remain UP. Also, Monday is a QE day of 3bn.
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*I remain on the sidelines..awaiting a two day bounce to play out, never mind the fact its almost the weekend, and its opex.


10.13am.. baby bull flag on the 5min chart...

I'm not too confident though about it, not leas with the MACD cycle ticking lower, perhaps for another hour.
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10.34am... R2K..and other indexes kinda close to breaking new lows. VIX still red though, and well below  yesterdays high.

I'm guessing this will hold.

10.38am..floor breached. Hmm.. That should rattle all the weaker bulls out!

Just noticed the transports... -0.7%, thats pretty significant.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +10pts, we're set to open around 1598. Precious metals are pretty strong, with Gold +$15, and Oil +0.4%. Near term trend is a likely bounce, as high as 1620/25 by late Monday. Downside target zone remains 1550/30.


sp'60min

vix'60min

Summary

Well, the bears have had a strong two day run. The smaller 15/60 cycles are VERY oversold, and we're due a bounce, and it looks like we are getting one.

Frankly, the bears should be cheering this nonsense higher, it'll make for a much better short entry next Monday. Indeed, I expect we will rally into next Monday.

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So..I will refrain from launching a short until next week. There is no hurry.

With the break of support, the bigger picture is now clear.
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*Keep in mind, no econ-data/news due today, no significant QE, and its quad-opex.

Good wishes for the last day, of what has been a rather exciting trading week.

-
The latest public video from Mr Permabull/Oscar...



Hmm

The Bears are in control

For the first time since last November, the bears actually seem to be in control of the market. With VIX back in the 20s, and a break of the critical sp'1598 low, the only issue is how many days..or weeks, it will take to hit the lower bollinger band on the weekly charts :)


sp'weekly7 - the outlook/count I am now following

sp'daily4 - time issues

sp'daily3 - fib target

Summary

Well, today was indeed quite a day! This was the first decent bit of two day bearish action we've seen since last year, and it is unquestionably a massive relief to all those bears who have been on the losing side for so many months.

Critical things to take away from today...

1. the break of the rising support at 1620, the 50 day MA, and the 1608/1598 lows
2. break of the rising channel on the weekly charts
3. VIX back in the 20s..a really important sign that 'things have changed'
4. consistent intra-day downside

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The following is a 'best guess' of the very near term


sp'60min'3

Without question, the 1550/30 area is the primary target zone, and with todays index decline, and VIX jump into the 20s, I'm pretty confident we'll see this wave'4 (ABC) play out.


Looking ahead

Friday is quad-opex, so it could be a lot more choppy than normal. There is no significant QE, and there is absolutely no econ-data/news due.

Generally, Friday will be where we will again see just what the bulls can manage. My best guess is they will indeed manage a bounce (into Monday), perhaps as high as 1620/25.

On any basis, I will look to short all bounces until we are in the initial downside target zone of sp'1550/30, although we could go lower to 1510/1490s, if we fall faster.

To all those on the short-side, from earlier this week, congrats. With the break of the weekly channel, we should be in the mid/low 1500s sometime within the next few weeks.

Goodnight from London

Daily Index Cycle update

The main indexes saw their biggest closing declines since last November, with the sp -2.5% @ 1588. Hourly charts are offering a bounce back into the 1620s, with a more severe wave down to at least 1550/30 by mid July, although 'best bear case' is sp'1510/1490 - by the end of next week.


sp'daily5

R2K

Trans

Summary

Well, we actually saw the second big down day in a row! For the bears, this is Easter and Christmas all at once ;)

Seriously though, with the VIX breaking into the 20s, the bears are back, at least for the near term.

With the break of rising support @ 1620, and the recent lows of 1608 and 1598, the primary target is the lower weekly bollinger...currently 1488 (but rising each day).

By mid July, that target will be in the 1550/30 area, which would equate to R2K @ 900, and Transports 5700/5600.
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a little more later