Volatility whacked lower

With the main indexes seeing some moderate upside with sp +1% @ 1588, the VIX saw rather consistent weakness across the day, closing -8.2% @ 18.47. VIX is probably gap-filling, and a stronger surge into the mid 20s looks very viable by the Friday close.


VIX'60min

VIX'daily3

Summary

Yesterdays black candle on the daily chart was a good warning that today would not be good for the bears.

However, this is probably just a 2 day 'cooling phase' before the next surge higher.

I find it hard to believe sp'1560 is the low of the current equity down cycle, and indeed, I'm seeking at least the 1530s, possibly 1510/00 within the next 3-5 trading days.

Even the sp'1530s should equate to VIX 25/27.
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 more later..on the indexes

Closing Brief

The main market clawed broadly higher across the day, but the market still looks rather shaky. Further upside into early Wednesday seems very viable, but this bounce is going to hit a wall around sp'1600/10. VIX is already gap-filled in the upper 17s.


sp'60min

vix'60min

Summary

*touch of weakness into the close, but I don't think its too important.
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Well, today was a day where I merely sat back..and watched.

The bounce from 1560 is now almost 2 days in age, and if the Wednesday open is higher, that will almost certainly be it.
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The gap at sp'1625 (or so), looks out of range in the current bounce.

Broadly speaking, the near term trend still looks exceptionally weak, and a move down to the low sp'1500s looks very viable..within days. Look for the 10yr yield to break >2.75
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more later

3pm update - patient bears

The market is holding moderate gains on all the main indexes, with the sp' breaking into the 1590s just earlier. Bulls should be content with any close >1585, with the VIX set to close -8/11%. Further equity upside looks likely early Wednesday.


sp'60min

vix'60min

Summary

The VIX in particular is right on schedule, with a gap-fill seemingly now imminent.
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*I will stay on the sidelines overnight, but will launch a full short of the market early tomorrow, seeking a move down to 1550 by the Friday close, although the bigger target remains the lower weekly bollinger..currently @ 1495.


UPDATE 3.33pm.. sp'1592..well, now the bears will be getting real mad..and are clearly getting short-stopped out.

Further upside as high as 1605/10 looks very viable early tomorrow, and  that will arguably make for a superb re-short level.

Worse case upside is 1625 gap-fill zone, but I can't imagine that right now. I think we fill that gap in late July/August.

2pm update - next target is sp'1595

Market is still a bit shaky, but still holding reasonable gains. Next target is sp'1595, which is possible by the close of today, but more likely early Wednesday. Those bears seeking a re-short, should probably sit it out overnight. There doesn't seem to be a hurry.


sp'15min

sp'60min2' - bol'/Keltner

Summary

The smaller 15min cycle - with fib' levels, shows the next target of 1595.

No reason to expect that not to be hit.
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What I am curious to see early tomorrow is whether the bulls gap the market higher..into the 1600s..but with an immediate fail.. with black candles on the hourly index charts.

Similarly, doomer bears should be seeking a reversal candle on the VIX at the Wednesday open.
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First things first though...lets see how high the bull maniacs can ramp this into the close.
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Stock of the day remains..the failing...

BKS

I can only hope the board are feeling the pain today, as they deserve for their utter incompetence, in what should be a simple chain of book stores.
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almost as bad..are the miners...

CNX - one of the better ones, is still getting trashed

No real support until 26/25, even then, that won't likely hold. Ugly sector.


2.37pm.. Bulls making a play for the 1590s...and that will no doubt really annoy those still holding short from the 1560 low.
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1pm update - VIX still falling

Equities are still climbing, but it is one of the most unstable rallies I've seen in a long while. Meanwhile, VIX is cooling off, and is now approaching the top of the gap zone. Downside <17 is possible early Wednesday. Precious metals are again weak.


sp'60min

vix'60min

Summary

Not much to add, aside that I remain waiting to short this nonsense.
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VIX update from Mr T.




stay tuned


1.35pm.. a touch of weakness, but we're still generally higher.

As things are, I will NOT be shorting into the close, and will wait until Wednesday 10/11am.

Still looks like 1596/1605 will be hit, and thats a fair way from current levels.
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12pm update - pressure remains to the upside

The market is continuing to build gains, but the indexes sure look a bit shaky at times. There is clearly a lot of selling into strength this morning. Hourly charts still pushing higher, sp'1595 looks pretty easy to hit, but 1600 will be 'difficult'. Eyes on the VIX, which is cooling off..termporarily.


sp'60min

vix'60min

Summary

My best guess remains this is merely a bounce, before much lower levels.

On any basis, I'm seeking a clear short from 1590..down to at least the 1550s...but possibly considerably lower if bond yields spike on Thurs/Friday.

Look for the 10yr >2.75%.
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*I am trying to remain patient...and will launch a major short when the 'turn' appears in.

11am update - battling higher

Opening gains...a bit of chop, but underlying pressure - as seen best on hourly charts, remains to the upside. A close in the 1590s looks very likely, with VIX -10/13% or so. Further follow through early Wednesday looks briefly viable.


sp'60min

Summary

A bit of a confusing mess for those not keep their eye on the bigger picture.

Near term trend is UP...target is somewhere around 1600/05/10.
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Main trend remains down, and I am indeed STILL seeking a hit of the lower bollinger' on the weekly charts...currently @ sp'1495 (but rising!).
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I remain looking for a full re-short....which now seems likely not until early tomorrow.
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VIX'60min

Seeking a gap-fill. At least into the mid 17s.

10am update - bouncing to 1600

The market appears to be comfortably holding gains, and looks set to build upon them across the day. Upside target is currently sp'1600/10 with VIX 17.25/16.75, although these levels might take until early Wednesday to hit. Bears looking to re-short..need some patience.


sp'60min'2 - bollinger/Keltner

Summary

One single..and simple chart to highlight the two sets of bands which I think are pretty important to focus on across today..and into early tomorrow.
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*I remain on the sidelines, but seeking a full re-short late today...but right now..seems more likely (and safer)...early Wednesday.

stock of the day..so far...

BKS

The company has a business model that still doesn't work. I'm sure they've already done a lot to minimise their costs. Either they increase prices on EVERYTHING by 5-10%, or they will be liquidated, and then the vultures will pick up the stores that do make a profit.

The 'nook' continues to be a classic example of a company venturing into a sector outside of its expertise..and it has cost BKS shareholders dearly.

Simply....abysmal. The entire board should be fired for utter incompetence.


UPDATE 10.02am..econ-data ALL comes in fine, there is no reason why we won't hit 1600 by end of today, and perhaps a little follow through early Wednesday.
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10.22am ...a bit choppy, but I'm still guessing strength into the afternoon.

Certainly, its probably confusing many, but we do have some short term bullish signals on the hourly charts.

I'm VERY content just to watch.

Pre-Market Brief

Good morning. Futures are somewhat higher, sp +11pts, we're set to open @ 1584. Precious metals and Oil similarly look set for moderate gains. USD is a touch weaker. If the morning econ-data comes in at least 'reasonable' bulls look set to rally across the day.


sp'60min

vix'60min

Summary

We do have a lot of econ-data to get through between now and 10am, so the market could easily swing back negative..but I don't think so.

My best guess is that the market will rally for most of today, and possibly into early tomorrow.

The only issue is how high. There is the big 1620/25 gap area, but I just find that out of range now. I think bulls will be lucky just to get the 1595/1605 area.

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*I am entirely on the sidelines, and seeking a full re-short of this market. I will be keeping a close eye on the hourly charts, and looking for the VIX to gap-fill the 17.25/16.75 area.

It is possible this bounce will continue into early Wednesday, so some patience may be required!

Good wishes for Tuesday!

Primary target is currently sp'1495

Another lousy day for the bulls, and with the break of the up channel last week, the bears remain firmly in control. A near term equity bounce seems very viable, but the trend is broadly on the downside. Primary target remains the lower weekly bollinger, currently @ sp'1495, but rising.


sp'weekly7 - near term count'1

US 10 yr, yield, monthly'2

Summary

Well, another victory for the bears, and the weekly'7 count/outlook remains on schedule. Based on a number of the recent multi-week down cycles, the obvious target (in my view) remains the lower weekly bollinger, which is currently sp'1495 - but which is rising each week.

By next week, the weekly bol' will be around 1505/10, which is interestingly where the 200 day MA is also lurking.


10 year yields above 3%, by early next week?

I have added a very simple 10yr Tbond yield chart. Many out there recognise the importance of the 2.75 level. If that is broken at ANY time, then we could spike >3%, perhaps 3.20/40s. That would easily be enough to whack this market down to sp'1500.


Best guess....sp'60min'3

I have to think we're due some kind of continued bounce, and that today's upside action was perhaps the first 30/50%. It will be difficult to clear sp'1600 again, but if the market does, then 1615/25 would be the target re-short zone.


Looking ahead

There is a VERY large array of econ-data tomorrow morning. If some of it comes in 'reasonable' the market will likely use it as an excuse to ramp into the 1590s..possibly even higher. Perhaps most important, we have durable goods orders (8.30am), and consumer confidence (10am).

*there is no significant QE tomorrow. Next major POMO is Wed' and Thursday.
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**Bonus chart...

Copper, monthly'2, with fibs

Even though we closed in the 3s, the earlier break to 2.99 was very important. The door is now open to the low 2s, That is viable within a few weeks, although it could take a few months. Regardless, it is a very bearish chart, and bodes badly for Gold/Silver, and the entire mining sector.

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I'm on the sidelines overnight, and am merely seeking an equity bounce, and will look to short this market down to sp'1550/30, but possibly as low as 1510/00 by early next week.

What is clear, if we hit the lower weekly bollinger, I'm going all out long. So much for the 'permabear' eh?

Goodnight from London

Daily Index Cycle update

The main indexes saw renewed significant weakness, including an especially weak closing hour. The sp' closed -1.2% @ 1573, with the Trans -2.0% @ 5990. Hourly charts are offering a brief bounce, but primary downside remains the low 1500s, where the 200 day MA is lurking.


sp'daily5

R2K

Trans

Summary

This mornings down open was not what I was expecting. Indeed, the hourly charts were looking pretty positive at the Friday close.

Yet, with overnight weakness in Asia, and the 10yr yield spiking into the 2.60s, the market was again getting upset.
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We have some very serious breaks on the daily charts, and there is pretty obvious downside to around 900 on the R2K, sp'1510/00, and 5600s on the Trans.

*I am merely seeking a reasonable bounce, and then to launch a major short. Best bear case downside is the lower weekly bollinger, currently @ 1495..but that target is rising each day.

a little more later...