Monday, 19 August 2013

Volatility rises into the 15s

With the main equity indexes weak across the day, the VIX managed to hold onto moderate gains, closing +5.1% @ 15.10. Near term trend is clearly to the upside, but a brief pull back to the rising 10 MA is similarly very viable. VIX 20s still look very unlikely until September.




Dare I start by noting, VIX 15s are still nothing for the equity bears to get overly excited about. We're a very long way from the first important threshold - VIX 20s, and I still don't see that as viable until next month.

Yet, volatility is trending to the upside..and the indexes look set for further falls on Tue/Wednesday.

Underlying MACD (blue bar histogram) is now at very high levels, and there is very significant probability of a pull back - which usually would be to the 10MA.

Best guess...sp'1680s..with VIX 13s...later this week. That will be the level where I will feel comfortable to get involved on the short-side.

more later..on those weak indexes

Closing Brief

The main indexes closed moderately lower, with the sp -9pts @ 1646. R2K was especially weak, lower by almost 1%. Near term trend remains bearish, with next fib' support in the mid sp'1630s. Precious metals and Oil both closed moderately lower.



Not the most exciting of days, but still, at least I refrained from going long this morning.

The market is stuck in a moderately strong down channel - since the Thursday gap lower. Bulls are so far showing no inclination to buy.

*interesting price action today in: AAPL, MRO, and BTU

*I remain on the sidelines. I'd only feel comfortable with either going long in the 1630s, or short from the 1680s. The big issue for this week is the FOMC minutes, Wed 2pm.

the usual bits and pieces across the evening.

3pm update - bulls refusing to buy

The main indexes are hovering close to the lows of the day. The Rus'2000 is especially weak, having now also broken the 50 day MA. VIX is moderately higher, +4%, at the 15 threshold. Metals and Oil are weak, but still nothing of significance.

R2K, daily



Despite the current declines, I'm not changing my outlook.

First a bounce to the 1680s...then a more substantial wave lower.

I am still not intending to play this bounce, I remain very cautious, in what remains a very quiet August.

3.14pm...still no buyers..and the indexes are in melt mode...(rarely) to the downside!

Next fib support...the mid 1630s.

 3.29pm.. is down.

This IS good news though, the longer they remain offline, the less money they lose on every sale they're not making!

3.36pm.. AMZN is back online....(ironically)....losing more money on every sale they make. !

Amusing to also hear the clown maniacs seemingly a bit twitchy of looming Dow sub 15k.

3.40pm..there should be pretty good support at current levels...

Stay tuned

2pm update - no buyers out there

Equity indexes remain moderately weak, and the sp' has taken out the earlier low. Weekly charts remain highly suggestive that 1709 was at least a mid-term high, with downside to the 1575/50 zone in September. Metals and Oil remain weak, but nothing of significance.



We remain within a very clear descending seen on the 15/60min cycle charts.

The safe long trade is obviously AFTER a break above..and out of the channel, which by the close of today is around sp'1655

*not sure why, but MRO is especially weak today...


1pm update - bulls just need the sp'1657s

Mr Market remains a touch weak, but there remains significant threat of upside. Bulls just need to break into the sp'1657s, and that should open up the 1680/85 zone for Wed/Thursday. Metals and Oil remain moderately weak.



So...3 hours of the trading day to go, and the bulls just need >1657.

Bigger picture remains bearish though.

Stock of the day...

AAPL should start to get stuck in the 520s.

UPDATE 1.30pm.. you can see the weakness in the weekly charts...

A red candle is not to be taken lightly !

Despite the weakness, I'm still guessing we bounce..first.

1.38pm.. R2K testing the 50day MA @ 1019. ..and sp' losing 1650s.

Kinda interesting, but still..small moves..on a quiet day.

12pm update - sleepy market

The main market remains in minor chop. Bulls are weak, and with no news due until Wednesday..or sig' QE until Friday, who wants to buy? Bears seem similarly weak though, but a daily close <sp'1650 looks unlikely. Metals remain weak, Gold -$9




*I am keeping in mind the FOMC minutes - due Wed' 2pm. Will that be the excuse the market wants to get back into the 1680s?

For the moment, I remain content to just watch.

VIX update from Mr T.

time for lunch!

11am update - bulls very close to a break

The main indexes remain very quiet, with minor chop. The bears look exhausted after a decline from 1709 to 1651. Bulls just need to push a little higher into the afternoon, and that will open up the 1680s later this week. Metals remain weak, with Gold -$5



*I remain on the sidelines. I am bullish in the near term.. but I can't stomach going long, not least with the weekly charts on outright sell.

I will merely wait..and hope I can get a short-entry in the sp'1680/85 zone, that seems unlikely until at least Wed/Thursday.

Notable movers...: AAPL, +$11 @ $512.  There will be sig' resistance in the 520s.

10am update - quiet start to the week

The main indexes open a touch weak, and the bears look tired. Hourly index charts offer upside for a few days, back into the rather obvious gap zone of sp'1680/85. Metals and Oil are moderately weak, whilst the former is likely to bounce back later today.



I'm not expecting much from today.

Best guess, bulls manage to at least hold things flat by the close, and that sets up Tue/Wed for an attempt to get back into the 1680s.

*for the moment, I am just sitting back. It sure is increasingly tempting to go long though.

Special note..


For those watching...the weekly charts were just earlier showing a red candle on the rainbow chart....and that most certainly hints at much lower levels in the weeks ahead.

*looks like the threshold for 'red' is about sp'1652 this week.
Also, note the lower weekly bol' target is now up to 1558 - its climbing at around 13pts a week.

Pre-Market Brief

Good morning. Futures are a touch lower, sp -3pts, we're set to open at 1652. Precious metals and Oil are similarly lower, with the USD unchanged. Moderate upside is expected - back into the sp'1680s, before renewed weakness.



So, a relatively quiet open is due, with the indexes a little weak..but nothing significant.

No major econ-data today..and no sig' QE. I guess you could call it a 'fair fight' for bears v bulls today.

I certainly want to see a bounce before launching a re-short, and I'm even considering going long, although I'd like to give the market a hour or two this morning to settle down, after the weakness of last Thur/Friday.

Video update from the Permabull...

A red arrow. I'm almost tempted to say 'don't fall in love with the downside Oscar'.

9.44am... quiet open, and we're seeing signs of a the upside.