Thursday 22 August 2013

Volatility back on the slide

With the main indexes closing higher, the VIX fell lower into the close, settling -7.4% @ 14.76. Near term trend looks weak, with VIX 13s likely within the next few days - equating to a bounce into the sp'1680s. VIX 20s still look unlikely until September.




Yesterdays VIX candle sure does make for a spiky least for the immediate term.

Today's decline of 7% was pretty significant, and I have to guess we'll soon be back in the VIX 13s - along with sp'1680s.

Weekly equity charts continue to warn of more significant market weakness into mid September, and if we're trading under sp'1600, then VIX should at least have a 'brief' opportunity to test the big 20 threshold.

more later..on the indexes

Closing Brief

Despite the Nasdaq being offline for most of the afternoon, the bulls still managed to solidify opening gains, with most indexes closing higher. The two market leaders - Trans/R2K, saw significant gains of 2.0% and 1.4% respectively. A bounce into the sp'1680s remains the target.



Well, that was kinda exciting to watch.

Bulls look strong enough to push the market higher into the 1680s across the next few days. I'd be somewhat surprised if we break yesterdays sp'1639 low.

*I remain on the sidelines, seeking an index re-short from the 1680s..with a mid-Sept' downside target of 1575/50.
bits and pieces across the evening.

3pm update - turn the machines back on!

The Nasdaq has now been offline for over two hours, and the tech-maniacs are battling to re-open before the official 4pm close. For those day-traders out there, who want..or need to close out positions each day..this is going to be one hell of a closing hour.

Nasdaq 1min - the dead index-patient.



Everyone loves a bit of drama, yes? ;)

So..lets see if they can get it running.

The main indexes still look somewhat biased to the upside. Bulls should consider any close >1656 -  as a 'miracle'.

3.11pm..amusing to see the cheer leaders rattled on clown finance TV. Not that they'll remember tomorrow..and nothing will change.

Could it all be just a test? ;)

3.27pm..and we're back up !

Market wants to break the sp'1656 high...a close in the 1660s would really smite the bears.

..and there goes 1656..and the bulls will be laughing into the close.

3.40pm..well, a close in the 1660s looking very likely, and that opens the door to 1680s within a day or two. Certainly by next Tue/Wed.

back at the close.

2pm update - bulls starting to take control

The main indexes are holding together, and with the two market leaders - Trans/R2K, higher by 1.7% and 1.2% respectively, the market looks set to push higher into the close. A gap fill in the sp'1680/85 zone remains the target..before much lower levels.




Its been a tricky few days, but with the two leaders pushing higher, I have to assume the floor is in.

VIX looks set for the 13s..which should equate to sp'1680s.

*unless you think we're going to break new index highs..across the next few weeks, the current bounce will be one to short.

2.04pm... NASDAQ trading

All hail the algo-bot overlords.

so...nasdaq...has died...

Definitely inspires my confidence in launching new trades in the coming days.

2.28pm... watching the confused cheer leading maniacs on clown finance TV....amusing as ever...but kinda useful to catch the updates.

Can the nasdaq open this afternoon, without any wacky flash-crashes?

Regardless, in the bigger picture..the HFTs are probably over-loading the market with quotes..and literally killed it. That'd be my guess. Look for some data from 'NANEX' on zerohedge later today.

1pm update - market stuck

The main indexes are largely stuck, with the sp' still unable to break the 1656 level, which has been resistance since Tuesday afternoon. Bulls should be seeking at least a close in the 1650s, anything <1645, will open up a weak Friday open.



It remains a marginal situation.

Underlying MACD (blue bar histogram) hourly cycle on the indexes is looking pretty high, and I'm still concerned of a further wave lower into early Friday.

12pm update - market remains weak

Despite the current index gains, the market remains relatively weak, with the sp' unable to clear 1656. Precious metals and Oil both holding moderate gains, whilst the USD is +0.3% @ 81.46 - sub 80s look unlikely. VIX -5%



A somewhat quiet morning - relative to yesterday afternoon!

I don't see why anyone would want to be getting involved right now. Serious risk of a small sell off into early Friday - the 1635/25 zone remains a pretty viable target.

What I am keeping in mind, is that Friday will see some sig' QE, and Yellen..will be speaking at Jackson Hole. That's two excuses for the market to ramp..but not before another low.

Anyway, I'm not getting involved. 

VIX update from Mr T.

time for lunch!

11am update - not buying this

The main indexes are all holding gains, but this market still looks very vulnerable. Bulls need a daily close in the sp'1660s, but even then, that will do nothing to negate the strong downward pressure seen on the weekly charts. VIX -7%, whilst HPQ -13%. Gold/Oil, both slightly higher.




Who wants to go long at these levels? There is very high risk of latter day weakness

*I remain content to watch, there seems little reason to chase things higher. The simpler thing is merely to wait for the 1680s, and then short.

Stock of the day... HPQ

A hit of the 200 day MA the low $20s looks a given. Not today, but certainly 'soon enough'. Watching Cramer interview the CEO earlier...what a comedy duo.

11.41am...clear resistance at the recent high of 1656. So far..bulls refusing to buy over that.

10am update - opening gains are vulnerable

The main indexes are higher, but so far..not yet clearing yesterdays high of sp'1656. Bulls really need to break into the 1660s today, or new lows still look viable late today/early Friday. VIX is -6%, back in the 14s. Gold +$7, Oil is a touch higher, but still generally struggling.




The opening index gains are VERY vulnerable to failing this morning.

Certainly, it remains a tricky market, not least with the 10yr yield opening at 2.91%

For those going long, the obvious stop level is 1640/38.

*I am not chasing the higher open, and I certainly won't be shorting the indexes until 1680s. I'd much prefer just going long 1635/25

Pre-Market Brief

Good morning. Futures are moderately higher, sp +2pts, we're set to open at 1644. Market looks vulnerable to a further move lower, into the 1635/25 zone. Metals are a touch higher, whilst Oil is a little lower.



*US weekly job claims: 336k. Not that the market should be able to make much of that number.

Well, many are looking for a floor 'any time now', and I'm one of them.

Despite yesterday afternoons somewhat wild swings, market is still due a multi-day ramp..back to the sp'1680s. Of course, those levels are now no longer viable until next week.

*I remain on the sidelines, but seeking to take a long position, but only from the 1635/25 zone.

Notable movers: HPQ, -7.4%..after earnings.

An interesting..and laughable segment from clown TV, at yesterdays close.
Skip to 5mins for 'taper talk'. and the 'phony economy'.

As ever, Queen Cheerleader is rattled at the notion of QE being reduced, and is playing the 'I don't understand' card.

US equities really struggling

The continued equity weakness appears to even be surprising some of the bears out there, never mind the bull maniacs who think the 'new world economy' continues on the 'road of recovery'. The next few weeks and months, could get rather interesting indeed.

sp'weekly7 - near term bearish outlook

sp'weekly'9d - H/S 'most bearish' outlook

Summary was another little victory for the bears, and the bull maniacs are no doubt even more surprised that we again closed lower.

What is becoming laughably apparent. Mr Market can not cope with the notion of QE being reduced. Despite some recent mainstream assertions that a minor taper of 15/25bn would not damage the broad multi-month equity ramp, it would seem the reality is very embarrassing for the bulls.

Most, if not all of the rally from the Oct'2011 low of sp'1074 is based on QE. Now that we're perhaps mere weeks from a small reduction, the US and World markets are increasingly unsettled - especially in the bond market.

I have no doubt the 10yr yield will be in the 3.25/40 zone within the next month or two. The only unknown is how will the equity market cope with such an increase? Right now, I'll hold to the original outlook. sp'1575/50 by mid-September, followed by a significant bounce, that may..or may not stall <1709.

Looking ahead

There is the usual weekly job claims, the house price index, and leading indicators. None of those will likely be 'major' market movers.

*there is no sig' QE-pomo until Friday.


I will consider a (brief) long position, from sp'1635/25...or a short position from no lower than 1680/85. The latter of which no longer seems viable this week. Indeed, a few people are now suggesting that gap will not be filled for a 'very long time'.

Considering the relatively low VIX, and continuing mainstream delusion that 'everything is fine', I'm still guessing we'll see a bounce back into those 1680s. That will make for a superb downside trade to the 1575/50 zone in September.

Goodnight from London

**Overnight video for Thursday trading..from Mr Carboni

For the macro-economists out there...

'Is the US in recession?' - Gordon T Long


Daily Index Cycle update

The main indexes closed lower, with the sp -9pts @ 1642, after a post FOMC-minutes ramp to 1656. The two market leaders - Trans/R2K, both slipped around 0.6%. Near term trend remains weak, with the market set to slip under sp'1600 within the next few weeks.





Today was indeed a bit of a messy one in market land. As expected, the Fed press release really caused some price action. Initial downside...then a near hyper-ramp to slightly positive..only for a final whipsaw to close near the lows of the day.

For me, I try not to trade on any FOMC days, and am glad to have sat it out.

Tomorrow..and the days ahead should be at least somewhat 'easier' to trade, if there is such a thing in this twisted market.

I am still seeking a near term bounce, back to the sp'1680/85 gap zone..before renewed downside into mid-September.

The next support zone - as many seem agreed on, is sp'1635/25. I would certainly consider taking a long position, but it really depends on the price action.

a little more later