Volatility slips a little

With the main indexes breaking back to the upside, the VIX slipped lower, but only a little, settling -1.3%  @ 14.91. Near term trend for the VIX looks weak, with a brief return into the 13s. The big unknown is how high might the VIX spike if the sp' breaks back under 1600.


VIX'60min

VIX'daily3

Summary

The daily MACD (blue bar histogram) cycle for the VIX is VERY high, and a few days pull back would be very natural.

Best guess, VIX will slip back into the 13s, whilst sp' battles back into the gap zone of 1680/85. That seems likely to take at least a few days, perhaps even into early next week.

Regardless, VIX looks set for much higher levels as we move into September, with sp' back under 1600.
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more later..on those indexes

Closing Brief

The market faded into the close, with the 15/60min cycles rolling over. However, the market still closed above the downside channel. A bounce to the sp'1680s still looks very viable, before renewed downside next week. Oil closed especially weak, -1.7%


sp'60min

Summary

Not much to say,

Hard to guess how tomorrow will play out. There is a very small possibility that the mid 1630s will still be hit, but really, I doubt it.
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*I remain semi-paralysed on the sidelines. Losing money would feel less annoying.
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bits and pieces across the evening.

3pm update - tricky closing hour

The market has clearly broken out of the down channel, and the sp'1680s look likely. The only issue is whether a further down wave is viable. The cautious equity bulls will be exiting into close. VIX is lower, but only by 4%.


sp'60min

Summary

*were I long from early this m orning (which I was not)..I'd be exiting now.

How we close..is too tricky to call. 15/60min cycles could easily rollover again, and even the 1630s are viable.

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It remains a relatively quiet market, and the only thing moving things around are the bond yields.
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2pm update - battling higher

There is no doubt now, a move back to the sp'1680s is well underway. The two market leaders - Trans/R2K, are significantly higher by 1.1% and 1.5% respectively. The only issue now is how many want to buy >1685/95. VIX remain lower by 4%


sp'60min

sp'weekly7

Summary

There is moderate risk of a minor down wave, but the 1630s now look very unlikely.
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For the bears...its just a matter of waiting again.

Even a move back to the 1680s..and the weekly chart candle should remain blue..and the mid-term target of 1575/50.. remains on schedule.

1pm update - bulls need a close in the 1650s

The main indexes are holding moderate gains, with the sp' so far peaking at 1658. Bears look tired, and the 1680s look very viable for Wed/Thursday. VIX is cooling down, -4% in the mid 14s. The sp'1680s probably will equate to VIX in the mid 13s.


sp'60min

Summary

Not much to add right now.

Arguably, the downside momentum has been halted..at least for a day or two..and the big gap zone of 1680/85 - as everyone surely knows about...is waiting to be filled.
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VIX update from Mr T



stay tuned

12pm update - bounce underway

The bears are unable to push any lower, and it would seem we're now in the early phase of a move back into the sp'1680s. Bulls should be content with any close >1655. Precious metals are holding moderate gains, whilst Oil is back to flat.


sp'60min

Summary

Well, for those going long at the open, today and tomorrow look set for good gains.
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Frankly, I'm tired..of it all.

Worse case...1680s...but it just keeps pushing upward to new highs.. I see a lot of people out there now touting 1760/80s again..in the NEAR term. Urghh

I can only dismiss such an outlook..as based on the bigger weekly charts.

11am update - borderline break

The sp'500 is on the border of a key break above the down channel. R2K/Trans are much stronger, and highly suggestive that a bounce is now underway. VIX looks weak, and the 13s look viable  Metals are building strength, Gold +$8, whilst Oil is still weak.


sp'60min

R2k, 60min

Summary

It would appear the two market leaders - Trans/R2K, are suggesting near term floor is in, and we're going to battle higher across the day..and into tomorrow.

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*well, I'm not prepared to go long at these levels...I'll just wait for those 1680s.

Considering the weekly charts...should make for a good entry, with down side <1600 soon enough.

10am update - still within the down channel

The main indexes are a touch higher, but we're still clearly within what is now day'4 of a down channel. Bulls need a break >1655, but even then..it could merely be a sub wave..with one further fall to 1635/25 late today/Wednesday.


sp'15min

sp'60min

Summary

Its a very quiet open, and there just doesn't look like much to motivate the market.

With the recent trend being to the downside, I have to think there is very significant risk of further melt lower into the late afternoon.
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For now, I'm simply not getting involved.

I'll consider long 1635/25...or short 1680/90.

Until either of those...I remain a mere watcher.


10.42am.. and sp'500 BREAKs above channel.

Door is now open to an easy 1665/70....and then 1680/85
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I am not chasing it though.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open around 1653. Precious metals are a touch weak, with Oil lower by almost 1%. Bulls need to battle back >1654 - the hourly 10MA, to break the 3 day down channel.


sp'60min

Summary

So..we're set to open higher, but will the gains stick for very long?

There is considerable possiblity of an early morning fail, and then a further move lower to the 1635/25 zone late today/early Wednesday.

I do not see any significant risk of sub sp'1600s in the immediate term, baring 10yr yields soaring into the low 3s.
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For the moment, the only trades I will consider, are long in the 1635/25 zone..or short in the 1680/85 zone. The latter of which will be especially difficult this week.
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*no major news due today...and no significant QE-pomo for the bears to be concerned about.


9.35am...well, gains are weaker than pre-market..and indexes could flip red for a bit this morning.

Right now, bulls need 1655 to decisively clear the down channel.

Headed back under sp'1600

It was the fourth consecutive decline for the sp'500, settling at 1646, and looking set for a move <1600, if not this week...then soon after. The real issue is what happens later this year, a lower high (<1709)..or continued ramp into Christmas/spring 2014?


sp'weekly7 - near term bearish outlook

sp'weekly8 - mid-term hyper-bullish outlook

Summary

So...another day lower, and its somewhat amusing to see the mainstream mood change. The sp'1700s are now around 65pts higher..a good 4%. Even a 35pt bounce - back to sp'1680, will not do any real damage to what I believe is a new multi-week down cycle.


Autumnal problems?

The following remains something I will be keeping in mind for Oct/Nov


sp'weekly9d

The only decent short-trade would be after that RS is confirmed. Were that scenario to occur, we'd see VIX back in the 30s, if not 40s. Yet for now, that is simply 'crazy talk'. First, we need a hit of that lower weekly bollinger, currently @ 1558, and rising each week.


Looking ahead

There is no sig' news/econ-data due tomorrow. Neither is there any sig' QE-pomo until this Friday.
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I remain somewhat frustratingly on the sidelines, but hey, at least I've not been ground down on the long side. I continue to see a small bounce coming, back into the obvious gap zone of sp'1680/85.


sp'daily'3 - fib levels

sp'60min'4

With the weak closing hour, it looks like we'll break lower into the mid sp'1630s tomorrow/early Wednesday - where the 50% fib retrace is, along with the 100 day MA. With the FOMC minutes due Wednesday afternoon, I'm inclined to still believe the bulls will use that as an excuse to jump aboard, for a 3-5 day rally.

Goodnight from London

Daily Index Cycle update

The main indexes closed moderately lower, with the sp -9pts @ 1646. The two market leaders - Trans/R2K, saw declines of 0.7% and 1.1% respectively. Near term trend is clearly to the downside, but the bulls are going to jump in at some point this week.


sp'daily5

R2K

Trans

Summary

The fourth consecutive decline for many indexes, including the sp'500, and this is certainly confirming what the weekly charts have been warning about across the past few weeks.

The only issue now is what level will the mainstream bull maniacs decide is an acceptable buying level?

The next level is the 100 day MA in the mid 1630s, and that is also where the next fib retracement level resides.

So, with the sp' closing at 1646, a further 10pts look very viable for Tuesday.

a little more later...