Friday 23 August 2013

VIX melts lower into the weekend

With equities quietly melting higher into the Friday close, the VIX naturally slipped lower, closing -5.3% @ 13.98. Across the week, the VIX fell 2.7%. but importantly, did manage a higher high (16.56), and a higher low.





As is often the case, with the equity bears exhausted, the market managed to end the week with minor gains. Laughably, once again the VIX was especially whacked an extra bit lower in the closing minutes.

My target for next Mon/Tuesday is the sp'1675/85 zone. If that is the case, the VIX will probably decline a little further, where there is a very obvious gap zone, that stretches into the low 13s.

I suppose 12s are briefly viable, but I strongly believe the market will again rollover, and then its just a matter of when...not if, the VIX will be spiking into the high teens.

VIX 20s don't look viable next week, but certainly, 'sometime' before the next FOMC of Sept'18.

more later..on the indexes

Closing Brief

The main indexes melted quietly higher into the weekend, with the sp +6pts @ 1663. Further gains look likely into next week, but the market should get stuck in the 1675/85 zone, before a strong push sp'1600/1575, no later than mid September.



For many, a quiet end to the week is always welcome.

The market sure has struggled this week, but we're surely seeing a small bounce from the sp'1639 low...up to 1675/85.

As ever, one day at a time, but the mid-term downside target of the lower weekly bol (sp'1558..and rising)..looks on track.

Have a good weekend everyone!

The usual bits and pieces across the weekend
*next main post, late Saturday, on the US weekly indexes

3pm update - melting into the weekend

The main indexes are quietly melting into the weekend, and there remains a small bias to the upside. Market still looks set to move into the sp'1675/85 zone next week. Whether that is done in one big leap on Monday...or drags out across Tue/Wednesday...we'll soon see.




*note the VIX, doing its typical 'melt lower' into the weekend.

No point bears taking new short positions into the weekend, not least the options traders.

I continue...the patient bear..seeking a major re-short on the week.

A trade from the 1675/85 zone...down to the 1600/1575 level..will make all the waiting...worthwhile.

*metals looking strong..5-7% higher to go...

GLD, daily

142s look viable 

2pm update - sleepy afternoon

The market is drifting, with the sp +4pts @ 1661. The two leaders - Trans/R2K, are both a touch weak, after what were very significant Thursday gains. General upside into the sp'1675/85 zone looks viable early next week. VIX continues to melt lower, -3% in the 14.30s



Not much to add, on what is turning out to be a very quiet end to the week.

*the sp' looks set for net-gains on the week, however, that usually happens in many multi-week down cycles..and the current candle remains a reasonably bearish blue


stay tuned...

1pm update - bulls trying to battle higher

The main indexes are holding moderate gains, and with slight upside bias - seen on the bigger daily charts, bulls look set for a Friday close in the 1665/70 zone. That will easily open up the 1680s next Mon/Tuesday. VIX is simply melting lower into the weekend, -3%




Things are looking on schedule.

*a number of people out there are seeking a RS, of an inverse H/ the 1650/45 zone, but that is looking less likely by the hour.

Bears had their chance this morning....and failed.

The simple my view..just wait for the 1680s..then start hitting buttons.

Good downside viable...not least if the 10yr yield can break to 3.25%

12pm update - patiently waiting

The main indexes remain in chop mode, ahead of the weekend. There is very little reason for the bears to be getting involved right now. The bulls look set for further moderate gains next week, into a key target zone of 1675/85 or so. Precious metals are continuing their multi-week 'bounce'.



A quiet end to the week...probably a good thing.

With $3bn of QE this morning, I'm still inclined to believe the bulls will manage to push the market higher into the Friday close.

Regardless, I ain't getting involved.

VIX update from Mr T.

time for lunch !

11am update - choppy end to the week

The opening gains failed...but with underlying upside bias...we look set to close in the sp'1660s. VIX will likely melt lower into the weekend, although 13s look unlikely today. Metals are strong, with Gold +$17, Oil is building gains.. +0.7%.



A messy opening 90 minutes, and now we're battling higher again.

Yes, I'm still touting the bounce..and yes...I ain't getting involved today either.

I'm tired of trying to play the smaller cycles, and will merely look for a trade from 1680, down to 1600/1575 across the next 2-3 weeks.

stock of the day... MSFT

MSFT, daily

*see post by Armstrong

I certainly agree with Mr A's point that we need a real competitor to MSFT, if only for 'personal security' reasons.

The current black candle is not the most inspiring of sights, but it should hold up..whilst the main market battles to the sp'1680s.

10am update - opening gains failing

The main indexes all open moderately higher, but we're seeing some initial signs of a failure. Black candles all over the place on the smaller 15/60min cycle charts. VIX is -1% lower




*in addition to the opening black candles on the indexes, we have a corresponding hollow-red 'reversal' candle on the VIX.

It remains choppy out there, but bias should be to the upside for the market into early next week.

Regardless, I am not getting involved in this minor mess.

Yellen due to speak soon..along with some homes data.

ohh..and the $3bn of QE is about to be distributed...

Pre-Market Brief

Good morning. Futures are fractionally higher, sp +1pt, we're set to open around 1657. With a $3bn dose of QE today, along with Yellen speaking at Jackson Hole. today is a prime opportunity for the bulls to close the week in the sp'1660/70s.



So..a likely quiet open.

Given a few more days, bulls look set to hit the target zone of sp'1680/85, with VIX back in the 13s.

Weekly charts remain very weak, this is surely just going to be a small bounce. With the 10yr yield set to break into the 3s (3.25% is an easy target), within the next few weeks, everything looks okay for the bears, at least down to sp'1600/1575.

*with the weekend ahead, I have no interest in taking any positions, and besides, I am waiting for the sp'1680s anyway.

Awaiting the sp'1680s

The main indexes all closed higher, and momentum is starting to swing back to the bulls. Yet, the weekly charts would suggest this will be a mere bounce to the sp'1680s, before renewed downside into September.

sp'60min4 - H/S formation..with a bounce



With a lot of choppy price action in recent days, time is running out for the bears.

It has always been the case that the 'faster we fall..the lower we can go'. That is based on my general target of the lower weekly bollinger, which is rising around 13pts each week.

As things currently are, the lower bol' will be around sp'1600 by mid-September, and I sure don't think the bears can manage to be trading under the lower bol' in the current multi-week down cycle.

Its going to be next to impossible for the market to be trading <1600 at the time of the next FOMC of Sept'18. If that is the case, then VIX 20s don't look viable..not even 'briefly'. It is not the best of thoughts, wondering if the market will soon be starting another massive ramp...across Christmas..and into spring 2014.

Looking ahead

There is new Home Sales data at 10am, but far more important..Yellen is speaking at Jackson Hole in the morning.

*there is significant QE-pomo of around $3bn...bears..beware!

I remain on the sidelines, and continue to wait for a bounce into the sp'1680s, which seem very viable early next week.

Goodnight from London

Video from Mr Permabull, for Friday trading.

I can agree that its a bit of a messy time.

Update from Mr Biderman...

...and that really is goodnight

Daily Index Cycle update

The main indexes all closed higher, with the sp +14pts @ 1656, although resistance was broken, with a peak of 1659. The two leaders - Trans/R2K, closed with very significant gains of 2.0% and 1.4% respectively. Market looks set for a bounce into the sp'1680s early next week.





So, despite the Nasdaq being closed for over 3hrs, the main market was not particularly spooked, and managed rather impressive gains.

It now looks unlikely that sp'1635/25 will be hit in the current wave, and instead, I'm seeking a bounce to the 1680s. I do NOT expect new index highs any time soon, and even the 1690s will be tough for the bulls to get any daily closes within.

*I remain on the sidelines, and seeking an index-short in the 1680/85 zone...with an exit in the 1600/1575 zone by mid-September.

a little more later...