Friday 28 June 2013

Volatility closes the week flat

Despite some weakness in the main indexes in the early morning, and in the closing hour, the VIX failed to show any real strength, and closed unchanged @ 16.86. Across the week, the VIX declined by a rather significant 10.8%, but that still made for a higher high..and higher low.





The VIX weekly candle sure doesn't look pretty for those seeking lower equities in July, yet...we have put in another set of 'higher highs and higher lows' for the sixth consecutive week. In many ways, that is perhaps the most bearish aspect right now.

VIX looks floored on the hourly chart, and I will be seeking the low 18s next week. VIX 20 looks possible next week, but it sure won't be easy. It seems to take a real scare in this market to even briefly hit the low 20s.

more later..on the indexes

Closing Brief

The main indexes closed somewhat mixed, with the sp' settling @ 1606, after the Monday low of 1560. With next week being a 3.5 day trading week, it is difficult to call whether the bulls will get the opportunity to melt the market higher, or whether bears will see at least a small wave lower.



..and thus concludes the first half of 2013.

Frankly, I'm burnt out. Thank the gods its the weekend.

Have a good...and restful weekend everyone!

bits and pieces across the evening to wrap up the week...

*next main post, late Saturday, probably on the world monthly index charts

3pm update - slight weakness to conclude Q2

The smaller 15/60min cycles are suggestive of a little weakness in the last hour of Q2 trading. A close <sp'1600 looks out of range though, and the bulls should be relieved at this weeks considerable ramp. Bears still have the weekly cycles on their side though, ..just.




Well, its been a long week, and a tough quarter for the bears, and unquestionably, the first half of the year has been vastly on the bullish side.

I can only hope the market sees some serious volatility in Q3/4, if only to offer some good cycles to trade.

*I will hold heavy-short across the weekend.

Something for the bears to look to, as possible indication of weakness early next week...


Oil has often been a leading indicator, and so far, its still failing to break the big $100

3.11pm..well, there is a touch of weakness...sub 1610.

Arguably, anything <1610 should be enough to at least calm those bears terrified of closing >1625/30 (including yours truly).

3.35pm.. sp'1614s, hmm, a ramp into the close to 1620s would be a real annoyance.

Who wants to hold long across the weekend? Although I realise, the same can be said to those on the short side.

2pm update - back to flat

Its turning into something of a dull end to the week. The market is back to flat, and there is simply very little going on. VIX has no consistent power, and is melting lower, -2% in the mid 16s. VIX 20s look very difficult for next week, not least with the market closed for 1.5 days.


Trans' weekly


Despite the weekly gains, the Trans is still holding a red candle on the week, so there is still some hint of weakness for next week.

Overall though, its been a week for the bulls, from 1560 to the low 1600s, no doubt helped by 3 mid-sized doses of QE-pomo.

2.22pm, a touch of weakness, but until <1610, its still all...noise.

Metals sharply higher, but on the month..Gold is -$153, and Silver -$2.50

Anyone getting hysterical over todays rise is going to be just as disappointed as those calling a floor in mid-April.

1pm update - battling it out at sp'1610

We're stuck in the sp'1608/13 zone, the break from this will be important, although we could merely trundle sideways into the close. A weekly close of sp'1610 would be the most unclear situation, and give everyone a great deal to ponder across the weekend.




What is clear, we did indeed break the 3/4 day up channel on the indexes this morning, so the bears do have that to tout.

Further, we've certainly not seen a ramp straight to the mid 1620s, and with multiple resistance, the longer we fail to break it, the harder its going to be for the bulls.

An interesting afternoon ahead. I sure would like to see another minor wave lower, taking out 1600.

1.40pm.. market getting squeezed..its gonna way or the other..

Bigger cycles would suggest..somewhat lower.

12pm update - bears struggling

Despite an early morning sell off, the sp' held the big 1600 level, and the bulls fought back pretty impressively. It remains a very borderline situation on the daily charts. A Friday close in the 1620s would do serious damage to the still moderately bearish weekly cycle.




With the morning bounce, we're back to a blue candle, and that IS a real problem.

Need <1604 to get red.

If we can close <1600, I won't have too much concern about holding into Monday.

time for lunch !

VIX update from Mr P.

back later

11am update - where we close, is what matters

The bulls have already launched a pretty fierce bounce from the opening low of sp'1601, and are no doubt relieved that 1600 held. VIX has lost all the earlier gains, back to flat. Bears should remain somewhat 'desperate' for a Friday close <1600.




Ignoring the minor 'noise', and keeping in mind the bigger daily charts.

Bears sorely need a close <1600 by the close, but even then, they will need strong downside on Monday, just to have a chance of breaking to the original weekly cycle target of 1530s by mid-July.

How we close today is a tough one to call. Considering the weekly charts, I'm still inclined to the downside, but it sure doesn't look so great this hour.

I suppose it could be worse, I could be long BBRY


11.26am..well, indexes slightly green, and we're around 12pts from the gap-fill that seemed near impossible on Monday.

11.40am..they sure are battling it out at 1612/13.

10am update - increasing weakness into the afternoon

Hourly index/VIX charts are suggestive of a market rollover, with weakness increasing into the afternoon. With a weak PMI number, bulls look set to struggle to hold a daily close >sp'1600. VIX is higher, but so far, only by 3% in the mid 17s.




Up channel on the sp' is BROKEN.

That is a good early victory for the bears, but those on the short-side should seek a break <1600 by 11am.

Lower bollinger on the hourly chart offers a Friday close of sp'1590.

*I am heavy short the market, but would prefer an exit ahead of the weekend, even though I see stronger opportunity of weakness next Monday.

10am.. this is what I will be focusing on in the bigger picture...

The weekly candle has flipped back to red, and a close <1600 will open up a 50/100pt fall by mid July.

10.03am.. I'm looking for VIX 18.50 by early afternoon.

10.43am..urghh, bears just powerless again, no follow through, and we're almost back in the sp'1610s.

Worse case, hyper ramp to 1625/30, that'd be a brutal end to the week.

Pre-Market Brief

Good morning. Futures are flat, we're set to open around sp'1613. With no QE today, the bears should have a better chance of ending the current rally. Bears should seek a weekly close back under sp'1600, bulls should be content with anything >1600..




*PMI number:, due @ 9.45am

Well, its the end of the week, month, quarter, and indeed, first half of the year.

The bulls are still unquestionably in control of the main market, but if the bears can close this market back under <1600, I'll still very much be open to a hit of the original primary target, currently @ sp'1497 (but rising to 1510s next week).

Hourly index/VIX cycles suggest market weakness, especially in the latter part of today, and that should carry through into Monday.

Oscar posted a new video, but frankly, I'm not in the mood for  watching it. However, for those that do...

...awaiting the PMI number.


9.16am.. Futures have swung moderately lower, sp-4/5pts,

It will get interesting if the PMI comes in <53, and if that will be enough to tip the sp' <1600.

Frankly, as an options trader, I want OUT ahead of the weekend, but the hourly charts are suggesting weakness on Monday.  Hmmm

9.35am..Everything rolling over...bears have a real chance here!

Hourly charts suggest the stronger downside in the second half of the day.

9.45am PMI:  51.6 ....a clear miss.

Bears should seek weekly close under sp'1600

Despite the recent weakness, its been another quarter for the bulls, with the sp' rising from 1569 to hitting a new peak of 1687 on May'22. For the permabulls out there, a Friday close in the mid sp'1620s would be the ultimate way to end the week, month..and quarter.


VIX, weekly


Its been a tiresome day, so this will be somewhat short.

In order to get the weekly candle back to red, bears need to close Friday <sp'1603 (approx).

On any basis, if the bulls close >1625, I will be VERY concerned that next week will be equally bullish.

So..bears need <1603...preferably sub 1600...and bulls should be seeking >1625, although frankly, they should consider anything >1600 a bonus, considering market was trading 1560 on Monday.

Equity bears should also be seeking signs of some power in the VIX, a weekly close in the low 18s would still be a net decline on the week, but it would at least open up the 20s again for Mon-Wed'.

Looking ahead

Friday has the latest Chicago PMI number, market is seeking 55. Sub'50s (recessionary) look somewhat unlikely. Arguably, the bears should merely look for anything in the 52/51 area. There is also consumer sentiment data at 9.55am.

*There is no sig' QE to end the week. The new POMO schedule for July is issued by the Fed in the afternoon.

Well, lets see how we close the quarter..and indeed, the first half of the year.

Goodnight from London

Daily Index Cycle update

The main indexes climbed for a third day, with the sp +0.6% @ 1613. The R2K was much stronger, +1.7% @ 979. Near term trend is certainly to the upside, but bulls will need a weekly close in the sp'1620s to confirm that the 1530s are no longer on the agenda for early July.





So, a third day higher, and the bulls are back. The recent scare that the Fed might reduce the monthly QE of $85bn is again fading. After all, that's all settled again, yes?

How we close tomorrow - which also happens to be the end of Q2, will be important. Certainly, there is the issue of 'window dressing', and that most definately favours the bulls.

SP'1700s within a week or two?

The market has seen a rather disturbing straight up 60pt ramp in just 3 trading days. The really scary thing is at this rate, we'll be breaking new historic highs by the end of next week. Considering the last four years of mainstream delusion and market manipulation via QE, you'd have to at least consider sp'1700s as a viable scenario within 3-5 trading days.

Personally, I still think we cycle another wave lower, hence I'm still holding short, but if we do close tomorrow in the 1620s, I'll seriously consider bailing.

a little more later...