Tuesday 2 July 2013

VIX trying to level out

With the sp'500 so far unable to break/hold above the key 50 day MA of 1624, the VIX daily trends are starting to suggest a possible turn/levelling phase. The VIX closed +0.4% @ 16.44. Daily MACD cycle is still ticking lower, but a clear turn now looks viable by late Friday.




Suffice to say, VIX 20s still look a long way up, and don't appear viable until next week...if at all this month.

Equity bears should be desperate to see the sp' put in a daily close <1600, with the VIX back in the 18/19s. Right now, that seems the 'best bear case' by the Friday close.

more later..on the indexes

Closing Brief

The second consecutive day where the market made a serious attempt to break/hold above the important 50 day MA (sp'1624), but failed. A series of news stories helped pressure the market lower across the afternoon, and the daily index/VIX trends are appearing to turn.




For the bears, the phrase 'at least we didn't close in the mid 1620s' comes to mind.

The largely flat close should be seen as a start, and is certainly not any kind of confirmation of a trend change.

Bears unquestionably need a daily close <1600, and even then, the bigger weekly charts won't be fully on track until we're persistently trading in the 1570s..or lower.

Wednesday has very significant QE, and bears will likely struggle to prevent a third challenge of the 50 day MA.

more later..on the VIX

3pm update - daily trends starting to turn

With a series of negative stories piling up, the market is under increasing pressure. The repeated failure to clear the 50 day MA is posing a real problem for the bull maniacs, and with the break <sp'1610, the daily equity/VIX trends are starting to turn.




So....with the failure to keep pushing higher, the bulls are surprisingly already in danger of losing the big sp'1600 level.

I don't expect a daily close <1600, but it sure now looks viable early tomorrow, although there is that huge QE-pomo to be cautious about.

Oil..almost breaking $100...bullish economy?

3.24pm  Queen cheerleader on clown TV  '..we're off the lows'. 

3.34pm.. sp'1608...hmm,  a shame we're not getting a close <1600, but an overnight futures gap down will easily do it.

1590s should offer 1570s by Friday, but that really is 'best bear case'.

2pm update - stories upsetting the bots

A series of little news stories are continuing to pressure the market, and the 50day MA has again held. The daily candle is now the second 'spiky' one in as many days. A daily close <sp'1610 would be a real 'bonus' to the bears.  VIX is close to going positive.



So..Merkel is in a mood, Portugal bond yields are starting to ramp, and Egypt is all set for some socio-political turmoil across Wed/Thursday.

A good time for the US market to be shut.

A red close would really help the bigger bearish case, although until we're <1600, can't be confident.

2.14pm.. market SNAPS..to the downside.

Now we'll really get to see who wants to stay long! 

VIX..positive...a multi-week floor might finally be in.

Equity bears should be looking for the 19s, by the Friday close

1pm update - still holding under the weekly 10MA

A small wave lower - due to comments from Merkel on the Greek (continuing) bailout. Yet, we're a mere 4/5pts from a daily close above the important 50 day MA. Even more important though, the weekly 10MA of 1628, so far..still holding the line.



It remains a market swayed by minor news story..after story.

What should be apparent though, we sure don't have any red indexes yet.

1.40pm...indexes going red. Bears should seek a close <1610, below the morning low of 1613.

At least there is some kind of price action today!

12pm update - melting higher

The market is holding moderate gains, with the sp' on the border of breaking the 50 day MA for the second consecutive day. A daily close >sp'1625 will open up 1650/60s within the near term. For the bulls, this is simply 'normal service' resuming, with a huge QE tomorrow morning.



Indeed, with low holiday volume, there is now zero possibility of <1600 this side of July'4..

Its just another pathetic bear failure.

Reading around, its kinda laughable how much bearish hysteria is out there.

As I keep saying, despite the chatter, QE continues..IN FULL. Until that stops, the default trade is still on the long side.

VIX update from Mr T

Customers moving into Aug/Sept. July calls..pointless.

12.25pm..well, bulls have failed on another attempt to break/hold above the 50 day MA.

Hmm, a long afternoon ahead though.

Baring a close <1610, I won't be the least bit confident about tomorrow/Friday.

11am update - back on the border

Bears are again looking weak, and bulls are close to breaking above the important 50 day MA. A daily close in the 1630s, and it will once again wash away all those on the short-side. Considering the low volume, bears have little hope of anything this side of July'4



Little to say, the levels are clear.

'white flag' territory is >1630. No serious/big money can be holding short if we break above that.

Unquestionably, this market is back to bullish, baring a daily close <1600.

10am update - bears need to push

The bulls are still battling to clear multiple resistance in the mid sp'1620s, especially the 50 day MA @ 1624. The next few days is the prime opportunity for the bears to push the market back down. A weekly close <1600 would be the first soft target, but that seems unlikely today.




*I will keep referencing the weekly'7 outlook, its what I will hold to, unless we break >1630s.

Again, currency issues, and bond yields are back on the watch-list.

The euro break <1.30 is kinda interesting, but still, trading volume won't likely be much today, and even less tomorrow.

10.33am.. this is getting VERY annoying. We're damn close to the 50 day MA, and if the bulls break over that -as they did  yesterday, it'll be a very borderline situation.

Bears MUST push this nonsense lower, with a red close.

Otherwise, next level is 1650/60s. within 3-5 days.

Pre-Market Brief

Good morning. Futures are fractionally higher, sp +2pts, we're set to open around 1616. There is no significant QE today, so the market should (in theory) be slightly weaker. Bears should seek to at least keep <1626, and preferably a moderately red close.




Well,  lets see how this nonsense trades today.

I remain concerned that with relatively low (holiday) volume, the algo-bots will simply manage to melt everything slowly higher, in which case the 1626 high will be in danger of being broken.

As noted yesterday, I want to at least see the weekly 10MA hold, and that is currently @ 1627. Any daily close over that, and the bears (including yours truly) should start waving the flag flag).

I can only hope that by the end of this week, we're trading comfortably back <1600, but right now, that is indeed..a mere 'hope'.

8.59am.. USD +0.5%, Euro about to lose the 1.30 level.

Indexes lost all gains, now looking a touch weak.

A daily close <1600 looks difficult, but today would be the day, whilst no sig' QE.

*awaiting factory orders data @ 10am.

Hanging in there

With the break into the mid sp'1620s, the bears started Q3 on a truly depressing note. Yet, the important weekly 10MA was still not breached, and like the multi-week down cycle of Sept-Nov'2012, the primary downside target remains the lower weekly bol', now @ 1506.

sp'weekly7 - near term 'bearish' outlook


I'm still inclined to hold to the original outlook.

Yet it is literally VERY borderline now. Any daily/weekly close above the weekly 10MA - currently @ 1627. would arguably be the big buy signal the bulls need.

Underlying MACD (green bar histogram) cycle is still ticking lower - for the seventh week, and this is something those on the long side should keep in mind. In many ways, the only decent and safe long side trade is within 5-10pts of the lower weekly bollinger.

Looking ahead

In terms of econ-data for Tuesday, there is factory orders data, although I don't think the market is paying too much attention to anything ahead of the holiday.

*Tuesday has no significant QE, so the market will have slightly less pressure to the upside.

Goodnight from London

Daily Index Cycle update

The market was in positive territory for the first trading day of Q3, with the sp' hitting a high of 1626 by late morning. Surprisingly, there was actually some latter day weakness, with the sp' closing +0.5% in the 1614s. Underlying MACD cycle is cruising comfortably higher.



A very rough day for the bears to start the third quarter.

In many ways, does it merely portend for 'broad upside' across Q3 ? Considering that QE is continuing, its going to be damn difficult for the bears to take out the recent key low of sp'1560.

The bears should remain desperate for a daily close back <1600. If that is achieved later this week, then there is the 'small' possibility that 1560 will similarly be taken out, and the original weekly cycle target to hit by mid July.

*I remain short, will likely 'wave the white flag' on any break >1630. Until then, I am trying to be patient.

a little more later