Friday 2 August 2013

Volatility melts into the 11s

With the main indexes clawing inexorably higher, market volatility is still melting lower, with the VIX closing -7.4% @ 11.98 - the lowest close since mid April. Across the week, the VIX slipped 5.8%. The US market remains utterly..and bizarrely complacent.





Considering the market closed the week at new historic highs, its not exactly surprising to see the VIX close on a downer, but still...the 11s is somewhat bizarre to see again.

From what I gather, even the VIX pro-traders weren't looking for a VIX consistently below 13.

Yet here we are, with a weekly close in the 11s..and the indexes are still offering a little more upside next week.

more later..on those powerful indexes

Closing Brief

With no power on the bear side, the market recovered (if slowly) from morning declines, and closed at new historic highs. This was the sixth week higher for the US market, but things are very close to completing what is probably a sub fifth wave. Its almost time.



For the bears, another week of nonsense, even the closing hour was the typical little ramp; we've seen over a hundred times in the past four years.

I am holding to the original outlook. A key cycle turn next week, probably in the sp'1715/25 zone.

*Personally, I won't likely consider shorting the indexes until late Tuesday morning, after a rather large QE-pomo of $4-5bn has occurred.

Have a good weekend everyone!

*next main post, late Saturday, probably on the World indexes

3pm update - quiet end to the week

The main indexes are generally flat/fractionally higher, with the VIX -6%, looking set to close in the 11s.The metals are mixed, with Gold now $2, although that is still a sharp reversal after the pre-market declines of $25. Oil is moderately weak, now -0.9%.



It is indeed very quiet out there, and we're to going to the end the week on a very quiet note.

Stock of the day? .AAPL, which is ending the week on a high

Set to test the 200 day MA next week, when I am similarly looking for a market top.

2pm update - moderate gains on the week

The market is ending the week on a very quiet note, with the main indexes largely flat, and the VIX merely melting lower, on the edge of breaking into the 11s. Across the week, the market the sp' has managed a sixth week higher.

sp'weekly8 - mid term outlook


The weekly chart say its all, the broadly bullish trend continues..into next week.

Best guess, the up wave does complete next week, and then its just a case of how long it takes to claw back <1600.

Baring at least some 'QE taper' in September, I'd just have to assume broad upside into spring 2014..with sp >2000.

Great huh?

1pm update - back to flat

Once again its abundantly clear the bears are powerless..even to hold moderate index declines. Sp' could claw to 1708/10 by the close. Meanwhile, the VIX is merely melting lower, and the 11s look imminent.




So, for the wave counters out there, how many days might this sub'5 last? I guess it depends on where you start, and I've seen some that don't even start from the 1676 low, but rather the FOMC low of 1685

Regardless, there is no point getting involved today...or probably Monday.

VIX update..but no Mr T, its Mr R.


12pm update - fearless market

Whilst the main indexes are a touch weak, the VIX is being melted lower. After all, the market has no fear in the immediate term..everything is 'fine'. Surprisingly, a VIX weekly close in the 11s now looks viable, even if the sp' still <1710. Incredible complacency.




Well, VIX 11s actually look viable now, not least with things pretty quiet out there.

We'll probably see a further VIX smack down in the closing few minutes of the day.

*I remain on the sidelines, and right now, I don't expect to get involved until after the rather huge QE-pomo of Tuesday morning.

11am update - today is not the day

Despite unquestionably lame jobs data, the market doesn't care, and the indexes are only a touch lower. The notable action remains in the VIX, -4% in the mid 12s. Considering the red indexes, the red VIX is highly indicative that the market ain't breaking for another few days.




Without question, today is not the day for the bears to start getting involved..not least ahead of a weekend.

For many, its just a case of 'turn off  ya screens..and come back next week'.

The only notable stock action is in LNKD.

Kinda appropriate, that in the 'new economy', the only real growth is in websites filled with peoples profiles. Thats the economic growth we need, right?

Financial historians in the 22nd century will no doubt fall out of their chairs laughing.

10am update - indexes red, vix red

Those bears hoping for some consistent weakness into the weekend should be noting that whilst the indexes are moderately is the VIX. It remains a fearless market, and there looks to be zero reason for taking any short positions across the weekend




*I won't be meddling today, and with a rather giant QE-pomo on Tuesday morning, I'm likely just going to sit back until the latter part of Tuesday.

I think the opening action in the VIX says everything the bears need to know.

Everyone - even the cheer leaders on clown finance TV, seem agreed, the jobs data is very disappointing..and yet...the market is not significantly lower.

The 'new normal' indeed.

Pre-Market Brief

Good morning, futures are a touch higher ahead of the jobless data. Notable movers though are the precious metals. Gold -$25, Silver -27 cents, with the miners ETF - GDX -2%. Oil is effectively flat.



*monthly jobless:162k gains, 7.4%. pretty lame figures, but only a touch under what the market was expecting.

I have to say, with the daily charts as they are, I'm inclined to wait another few days before I get involved on the short side.

Certainly, I won't feel comfortably shorting anywhere <1720, and a few out there are suggesting 1740/60s..although I find >1730 unlikely..even given another 2-3 weeks.

8.33am...Metals are seeing the strongest reaction, Gold claws back $18 in seconds, and Silver swings 45 cents, to go +15 cents net.

Indexes are a touch cooler, sp-3pts, but thats noise....we'll probably close slightly higher.

Finally, someone whacks the permabull....

Welcome to the 'new economy' a pretty weak 162k job gains...and the rate drops to 7.4%


UPDATE 8.53am.. sp -5pts.. but the real action remains in the precious metals.

Gold is now +$7, with Silver +60 cents - a swing of 90 cents from just 24mins ago!

If those gains hold...that'll make for some rather impressive gains on the jobs news.

Starting the month on a high

After two weeks of chop, the sp'500 finally broke the elusive 1700 psy' level. The big monthly charts are still outright bullish, but we're now in overbought territory. Another multi-week down cycle would be very natural, and yet do little damage to the primary bullish trend.

sp'monthly3, rainbow

sp'weekly8 - mid term bullish outlook


That is certainly one way to start a new month, with new historic highs for many US indexes!

The bulls, not least the cheer leading maniacs on clown finance TV, are filled with optimism for the rest of the year, and indeed into 2014. After all, QE continues, and even the thought of a 10-25bn 'taper' at the FOMC of Sept'18, doesn't seem to be a concern for the mainstream right now.

There are of course a great many other issues looming, not least the US debt ceiling, the German elections (where I'm still guessing Merkel gets the boot), and the underlying weak growth.

For the moment though, the daily, weekly, and monthly equity charts are all 100% bullish. There is simply nothing for the bears to tout as particularly bearish.

Tired of the upside

With todays index gains, I am indeed growing tired of this market again. When was the last decent down wave? Well, it was a mere six weeks ago, but it feels like more like months.

There remain some 'interesting parallels' to the situation we saw in summer 2011, and indeed, I'm keeping such a scenario in mind. I certainly think the RSI's -relative to the price action/waves, are worth noting...

sp'weekly9c - the 'bearish outlook'.

As I will keep saying in the weeks ahead, the only point where we'll know if the above scenario has a chance, is when the sub wave'1 low is taken out..after a wave'2 bounce. Even if that scenario were to play out, we're looking at late Sept/ the earliest.

Looking ahead

Friday will be all about the monthly jobs data. The market is seeking a slightly lower 7.5% headline rate, and 175k net gains. Those are not bold targets, and I'd guess they will be exceeded, with the market rallying on 'good news is good news'.

There is also personal income/outlays and factory orders.

*there is ZERO QE-pomo tomorrow.

For those bears out there already holding short positions, today was indeed a rough one. Dare I say...hang in there, just a few more days.

*I am indeed on the sidelines, and seeking to short the main indexes, in the sp'1715/25 zone, which I might do as early as Friday morning. Even then, it will depend on the style of price action, and if I feel comfortable to take a short position across the weekend (not something I generally like to do).

Goodnight from London

Daily Index Cycle update

The main indexes soared, with the sp'500 finally breaking into the 1700s, closing +21pts @ 1706. The two market leaders - Trans/R2K, closed up 3.3% and 1.4% respectively. Near term trend is clearly outright bullish, primary target zone is sp'1715/25 within 1-4 trading days.





Today certainly confirmed that the recent chop was probably just a sub wave'4, and we're now in a final fifth. The only issue - at least from a wave-count perspective, is just how many days will this fifth last?

Best more than another 1-4 days...and if we spike higher on 'good monthly jobs data' early Friday - into the sp'1720s, that could quite easily be an exhaustion top.

As ever, top calling is rarely a good..or wise game to play..but its certainly somewhat fun.

I think we're getting real close, within 1%.

a little more later...