Friday 19 July 2013

Volatility smacked lower into the weekend

With the main indexes holding together - despite two prominent earnings misses, the VIX continued to decline. There was the usual extra smack down into the weekend, with the VIX closing -8.9% @ 12.54. Across the week, the VIX declined by 9.4%    





The market is back into effectively 'no fear' mode, with the VIX back in the mid 12s...absolutely incredible. 

This was the fourth consecutive week lower for the VIX, and that naturally matches with the four week rally in equities.

For the equity bulls out there, one thing to look for across the rest of July - and possibly early August, is whether the VIX can take out the March'14 low of 11.05.

VIX 10s look 'difficult' to hit, but for those doomer bears seeking a grand cyclical top, perhaps VIX 10s would be a key spike-low?
more later..on the indexers

Closing Brief

The main indexes closed mixed, with the Dow/Nasdaq held back by declines in MSFT and GOOG. The sp'500, R2K, and Trans, all closed a touch higher, with the sp +2pts @ 1692. VIX was smacked lower into the close -8% in the 12.60s.



Thank the gods...tis the weekend!

Another tough week for the bears - even  for those merely 'watching and waiting' on the sidelines - as I am. I shall hope that the growing consensus amongst chartists - that the current rally will wrap up within a week..or two.. will indeed prove correct.

Have a good weekend

*next main post will be late Saturday, on the US weekly index charts

3pm update - melting into the weekend

The equity indexes remain somewhat mixed, with the sp'500/R2K/Trans, all occasionally green, but the Dow/Nasdaq holding moderate declines - due to MSFT/GOOG. VIX remains the laughable symptom of a market that is fearless, -6.6% in the 12.80s.




Unquestionably, it was another week for the bulls.

Bears can whine all they like about the hugely important missed earnings from MSFT and GOOG, but the market...simply doesn't care.

sp'1700s look viable early next week.

*Silver & Gold slightly building gains this afternoon, and Oil is back positive on the day.

No doubt, WTIC Oil will be in the $110s next week.  Clearly..that is bullish for the US economy.

2pm update - quiet end to the week

The US markets remain largely quiet ahead of the weekend. Despite the indexes being slightly lower, the VIX is significantly lower, -5.8% in the 12.90s. Metals remain moderately higher, whilst Oil is battling back from earlier small declines.



All the smaller 5, 15, 60min index cycles are arguably floored, and we're set for the sp'1700s on Monday.

MSFT remains exceptionally weak, -11/12%...

so one wants to buy. As noted earlier, my target would be the 200 day MA.. in the 29s.

1pm update - net weekly gains

The main indexes are continuing to see minor chop on what is a pretty quiet opex. Precious metals are holding moderate gains, but Oil is weak, -0.5%. VIX is -5%, and looks set to close in the 12s. Bulls remain in control...of what remains a very strong 127pt rally.



Baring some bizarre late day sell off - which seems VERY unlikely, we'll close the week with minor net gains for the sp'.

Clearly though, this is now week'4 up, and there is absolutely nothing to suggest a turn.

Best guess remains, we'll see a turn within the next few weeks.

12pm update - minor opex chop

The market is holding slight declines, with the sp -2pts @ 1687. Most interesting though is the VIX, which has broken 5% lower into the 12s. Whilst MSFT is getting trashed -11%, the main market has little concern about longer term prospects, whilst the Bernanke continues QE-pomo.



I suppose the sub'4 is done, but really, the bears have been mis-reading up cycles for the last four years.

What if this is still sub'3 ? Hell, at the current rate of increase, we'll be sp'1800/1900s by early autumn.

MSFT price action is interesting, not least in the put options, some of which are now up 4000%.

11am update - fearless market

Whilst equities are holding slight declines, what is more interesting is the VIX, which is actually lower by 4%, and looks set to close in the 12s! Despite two huge corporate monsters missing expectations by 10%, this market simply doesn't particularly care.



The $3bn of 'benny bux' should be finding its way into equities across the rest of today.

Frankly, a green equity close looks rather likely, with VIX in the 12s.

Maybe this ramp from 1560 will complete by the end of next week.

What is clear though, today the bears remain laughably powerless.

Ohh, and as for the metals...despite Gold being up $10...its still within a pretty clear bear flag.

Weekly/monthly charts remain dire for the precious metals.

UPDATE 11.14am...and the indexes are starting to go green, lead by R2K.

At this rate, VIX in the mid 12s by the close, which opens up the 11s, if sp'1710/20 next week.

10am update - minor opex chop

The main indexes are moderately lower, particularly dragged down by MSFT and GOOG. Daily and weekly trends remain strongly to the upside though, and with a mid-size QE today, the bears are going to find is near impossible to break rising channel support of sp'1675.



The mid 1670s do not look viable today.

*as I type, VIX is actually now red, with the Dow -50pts.... what does that you about this market?

FEARLESS market...


I'm increasingly starting to wonder if this up wave from sp'1560 is going to burn out by the end of next week.

Certainly July'31 is offering potencial havoc, but more on that...nearer the time.

Classic opening black-fail candle on Oil.

Certainly...its had one hell of a run lately. Still, $110 is the next target.

As for MSFT...I am certainly no fan of windows'8, what a lousy piece of software...which no one likes, except the board of directors.

The July puts are up 2500/3000%, but then...that would have been a lottery play.

Downside target? I'd be looking for the 29s, where the 200 day MA is lurking.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -5pts, we're set to open around 1684. Precious metals are slightly higher. Most notable, Oil, +0.7%, making a play for the $109s this morning. Today is opex, with mid-sized QE-pomo of $3bn



Are the bears going to get overly excited at the opening declines? Probably.

Baring a daily close <1670, the primary trend will remain intact.

*Notable movers, after significant earnings misses

MSFT -7%
GOOG -3%

Well, its almost the weekend !

Oil still pushing higher

With the main equity/commodity markets firmly believing the QE will continue into summer 2014, WTIC Oil is similarly rising, and is now up by a rather disturbing 11.8% so far this month. The $110 level is widely recognised as important, hyper-bulls should be seeking $111s !

WTIC, monthly - 20yr

WTIC, monthly2, rainbow


Everyone in the western world seems perfectly fine with rising asset prices. It doesn't matter whether its stocks, bonds, gold, silver, or houses.  Yet, with rising Oil/gasoline prices, many are starting to get concerned..and very annoyed again.  Ahh, the irony.

WTIC Oil is seeing an absolutely clear breakout to the upside on the big monthly charts. If we close July anywhere >$100, that will make for one hell of a big 'breakout', on what is the world economies most important commodity.

As it is, Oil bulls - and myself included, are generally resigned to WTIC hitting $110 within the very near term. What happens from there is kinda important, but still, Oil could fall all the way back to $100, and that could merely be a back test of old resistance.

Mid-term outlook...on track

I'm holding to the following outlook, which is part of the 'hyper-bullish' outlook into 2015/16.


I am keeping an open mind as to when the current (black'5) will complete. I suppose it could be as early as next week, but..I'm going to stick with my best guess of early August.

Looking ahead

There is no econ-data tomorrow, on what is the monthly opex.

For the bears especially, it should be noted there is a mid-sized QE of around $3bn.

I remain on the sidelines, and have little interest in getting involved right now. Certainly, it is utterly pointless to be shorting just about anything.

Goodnight from London

Daily Index Cycle update

The main indexes all closed with moderate gains. Most notable, were historic highs for the Dow, SP'500, and the R2K. With the daily close >sp'1687, the bulls should be confident of further upside next week, and quite likely into early August.





Another day for the bulls to claim victory.

Unquestionably, the near term trend remains strongly to the upside. The daily sp' chart is offering support around 1675/70.

Considering the current price momentum, I don't expect to see those levels for some days..if not a few weeks.

*the rally in the R2K is particularly incredible, and yes..its approaching its upper channel line.

a little more later..