Wednesday 31 July 2013

Volatility fractionally higher

With the main indexes seeing some moderate swings after the FOMC announcement, the VIX similarly saw some chop, and only managed to close +0.45% @ 13.45. Near term trend remains to the upside, but even VIX 15s look difficult to close above any time soon.


VIX' daily3


Certainly, this afternoon was pretty interesting for a mere market spectator.

Yet, the swings are still relatively minor, and the VIX remains at what is historically a bizarrely low level.

Underlying MACD (blue bar histogram) cycle is now positive cycle for the first time in over four weeks. The cycle is still turning back toward the equity bears, even if the indexes are still within 1% of their recent historic highs.

I've no doubt the VIX will at least get into the upper teens in late August, but consecutive weekly closes >20 - which is when things would start to get interesting, still look unlikely.

more later..on those choppy indexes

Closing Brief

The main indexes saw some serious post-FOMC chop, with a spike to sp'1698, but then seeing a moderate reversal to 1685. The sp' closed the day..flat @ 1686. Across the month, the sp +79pts..around 5%.



Fun huh?

I will merely hold to original outlook, I still feel the bears are largely powerless right now, and will look for an index short in the 1710/20s, which still seems viable within a few days.

No doubt many bears will be excited at this afternoons action, but yours just not buying it.

bits and pieces across the evening

3pm update - a close in the sp'1700s

The bulls look set for a close in the sp'1700s, after almost two weeks of waiting. The bears remain powerless, and with the Fed decided to do nothing, the market looks set for the 1710/20s. Metals remain generally weak, whilst Oil is soaring...+2.0%



It remains a nasty market for the expected.

I am VERY content to sit on the sidelines, and wait for an index re-short in the sp'1715/25 area..which seems viable later this Friday.

2pm update - more fed-speak nonsense

Time for another press release from the money printing machine of the United States of America. The main equity indexes look set to continue further gains into the sp'1700s, at least for a few more days. Metals remain weak, whilst Oil is looking surprisingly strong.



Well, lets see what the printing maniacs have lined up..I'm guessing nothing....and 'nothing' is precisely what Mr Market will be looking for.

No clown finance TV for me today, 

1pm update - awaiting the Fed

The main indexes are still holding moderate gains, but Mr Market is clearly waiting on confirmation from the Fed that the QE fuel will not be reduced until at least mid September. Metals remain very weak, in stark contrast to a rather strong Oil, +1.5%



I still find it hard to believe the market is not going to break into the 1700s in the current 5 week long up wave.

I sure ain't shorting the indexes at these levels, there is simply too much risk of a further 2% or so of upside.

First of the $38 - IPO level, sellers have arrived in FB

Still, from a short-side perspective, the stock is surrounded by so much hysteria, best left alone.

12pm update - still broadly climbing

The main indexes are holding gains, although nothing too significant so far today. The sp +7pts @ 1693, having hit 1696. Gold remains very weak, -$18, whilst Oil is recovering from recent daily losses, and is +1.2%. The FOMC announcement is just two hours away.



I've no doubt some will be calling a top ahead of the FOMC, but really, it'd be kinda surprising if we see a reversal from the mere 1690s.

Daily charts are offering the 1715/20 area, although that now seems more likely at the end of this week.

*metals sure look weak, and it would appear that after trying to break old broken support, they are beginning a new multi-week down cycle.

VIX update from Mr T.

time for lunch!

11am update- bears on the run

As expected, the market is inexorably climbing higher again, and the sp'1700s are a mere 4pts away. The 1710/20s look a very viable target within the next 1-3 trading days. Metals remain very weak, with Gold now -$16.


GLD, daily


There is no reason to believe 1700s aren't viable in the next hour or two. Bulls are in control...and what bears are out there, are simply seeing their short-stops triggered.

So..lets see how high the maniacs can drive it today.

I'll only consider an index short late today..if the market is at least >1710.

*will be interesting to see how rattled the cheer leaders on clown finance TV get, in the next multi-week down cycle.

10am update - morning gains

With the econ-data coming in generally better than the market was expecting, the market is managing to hold moderate gains. Metals have snapped to the downside, Gold -$13, and now looking very weak for the days ahead.




*Chicago PMI: 52.3, not exactly 'inspiring' for the market, but still, its not recessionary.

I'm increasingly thinking the fifth sub' wave will drag into this Friday..if not early next week.

In the last cycle to 1687, the market hit the upper bollinger on the daily chart before the swift intra-day reversal.

Today, the upper bol is around 1719, certainly..a fair way higher from current levels.

For the moment, I'm in no hurry, not least with the FOMC announcement later today, and the big jobs data on Friday.

Pre-Market Brief

Good morning, futures are a touch higher, sp+2pts, we're set to open at 1687. Today is probably the best chance for the start of a sub'5 wave to the upside..breaking into the sp'1700s. Metals are mixed in early trading, Oil looks set to be moderately higher.

sp'60min3 - broad overview


 *ADP jobs:  200k, vs 179exp.

GDP..1.7%, vs 1.1%.... and thats on the new style of calculation
Chicago PMI

On top of the data..we have the FOMC of course, but thats not until 2pm.

I am on the sidelines, seeking an index-short, but probably not today, I want an entry preferably in the 1715/25 zone.

UPDATE 9.39am.. sp'1692...we're all set for the 1700s today.

If we somehow break to the 1710s, thats gong to be awfully tempting to short.

Another Fed day

Wednesday is going to be a particularly interesting day. Not only is there ADP jobs, Q2 GDP, and Chicago PMI data, but there is an FOMC announcement at 2pm. Considering the recent price action/waves, a further 2% of equity upside looks very likely in the immediate term.

 sp'weekly8 - mid term bullish outlook


The weekly candle did actually flip to green earlier today with the break into the 1690s again, but closed blue.

You can see that there is now a very high likelihood of the market seeing some rather classic bearish divergences - seen across a great many indexes, in the coming days.

Whether we max out this week, or next..really doesn't seem to matter. I'm holding to the original outlook, a cycle peak in the low sp'1700s, before a rather swift decline across Aug/September, back into the 1500s.

Copper is still weak

Whilst equities continue their very broad upward climb, Copper is again seeing renewed weakness. Wednesday is the end of the month, and a monthly close <$3 would merit some serious attention.

Copper, monthly

A few consecutive daily closes <$3, and the deflationary doomers can again start to wonder if they weren't right all along. Interesting confirmation might come, if WTIC Oil can similarly close under the important $100 threshold, although that doesn't look likely this week.

The Wednesday trading plan

Many out there (not least Mr 'Permabull' Carboni) generally have a 'no-trade the fed-day' rule. I'm increasingly one of them, not least with the sometimes wild price gyrations in the immediate hour after an FOMC announcement.

Right now, I'd only feel 'marginally comfortable' shorting the indexes from the sp'1705/10 level. I'd really have no concerns from the 1720s, but that seems out of range tomorrow.

Perhaps...the market will complete the current sub'5 later this week...on the Friday jobs data? it is, I don't really expect to be shorting the main indexes tomorrow, certainly not <1700. After all, if there is one thing the bears should have learnt in the past four years, when it comes to shorting the QE-fuelled market..there really isn't any need to hurry.

*Ohh, and as for what the Fed might do tomorrow, baring a complete end to the QE-pomo program, this market will surely battle broadly higher into spring 2014, if not a couple of years beyond that. That is indeed...not the best of thoughts to end the day.

Goodnight from London

Daily Index Cycle update

The bears tried to knock the market lower, but once again, the bulls managed something of a latter day recovery, with all indexes closing moderately higher. Near term trend remains to the upside, and the sp'1710/20s look very viable in the immediate term.





A relatively quiet market day, where the bears again displayed a simple lack of power. The underlying pressure remains to the upside, and bulls are still managing to generally negate every single little down cycle.

SP'500 looks set to break into the 1700s this week, if not tomorrow. With the FOMC, and an array of econ-data due Wednesday, tomorrow will be as good a chance as any.

*I remain on the sidelines, and will be seeking a short of the main indexes, but preferably in the sp'1715/25 zone.
a little more later...