Volatility slips into the close

Despite equities slumping on morning war-talk from Boehner, the VIX never really showed any power, and with indexes recovering into the close, the VIX settled -2.3% @ 16.61. Near term trend looks bearish, and a return to the low 15s looks very viable by early Thursday.


VIX'60min

VIX'daily3

Summary

For the equity bears out there, the VIX is still not showing any real power. VIX 20s are not that far off, but in this QE supported market, the bulls are still relatively calm.

For me, the only issue is whether both of the big gap zones are filled in the coming days. Considering how twitchy the market was this morning, I find the notion of a straight-up ramp to the sp'1680s highly unlikely.

So..best guess...sp'1660s...with VIX in the low 15s..before the next wave.
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more later..on the indexes

Closing Brief

A pretty dynamic day to start the month, with the main indexes managing to close moderately higher, after earlier opening gains evaporated on Boehner war-talk. The metals and Oil both held gains, whilst the VIX reflect a market that is so far..not overly concerned.


sp'15min

sp'60min

Summary

A pretty choppy closing hour, bulls can't call that as positive for early Wednesday.

Certainly, in retrospect, shorting the open would have made for a good trade, but really, I'm glad to be sitting the current nonsense out.

I'm still concerned for another 1-2% higher across the next few days.
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The usual bits and pieces across the evening

3pm update - an important daily close

The bulls are battling, somewhat desperately into the close, trying to hold the mid sp'1630s. VIX is higher, but only 2% in the 17s..certainly nothing for the bears to tout as anything other than 'slight concern'. Smaller cycles look floored, with upside bias into the close.


sp'15min

sp'daily5

Summary

Well, despite what is a significant morning failure for the bulls, with the 1627 low holding, I will hold to the original outlook of moderate upside into the 1660s by Thursday morning.

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*meanwhile..in permabull land...



Oscar is understandably similarly confused about the near term.

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updates into the close...


*standing by for clown finance TV to proclaim... 'we're off the lows of the day'.


3.06pm... hmm..battling higher...

Bulls should consider themselves lucky on any close in the 1640s.


3.34pm.. bulls pushing for a daily close in the low 1640s..which keeps open 1660s by early Thursday.

2pm update - daily charts showing a bull failure

Whilst the bulls battle to hold the mid sp'1630s, the daily charts are looking lousy from the bullish perspective. Market remains in a broad down trend from the 1709 high, and today's candle so far looks like a complete fail. VIX is trying to build gains..of almost 2% in the mid 17s.


sp'daily5

vix'daily3

Summary

Still plenty of time for the bulls to battle back into the 1640s..but things sure are unstable.

As earlier showed, market can drop 1% on a mere comment.

How will it react if actual missiles start flying (and Israeli 'test' flights don't count!) ?
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I remain on the sidelines, and would much prefer to launch a re-short in the sp'1665/70 area..but that hope gets thrown out on ANY break <1627.


2.14pm.. ohoh, market trying to do one its usual stupid afternoon ramps. Bulls should be content with daily close in the 1640s..considering how twitchy things are today.


2.32pm...battling it out in the mid 1630s.

Considering the 15/60min MACD cycle..I have to guess the bulls manage to hold things together into the close. Yet, even if i wasn't such a permabear..I'd not be inclined to go long now.

1pm update - bulls struggling

The market is really starting to look weak, although sp'1627 remains the key level for bears to break..and close under. Metals holding gains, Gold +$14, with Oil +0.3% VIX is a touch higher in the low 17s, but no real sign of concern..yet.


sp'60min

vix'60min

Summary

Well, the current weakness is something of a surprise, although I realise a fair few were shorting the open.
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Any break <sp'1627..and things really get interesting

*Dow goes red. A fifth weekly decline, would be the first since May 2011.

*it again lends some credence that what we're seeing lately might be something analogous to the multi-month decline of summer/autumn 2011
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1.33pm.. market looks like it is forming a floor in the mid 1630s.

Baring another 'Syria' comment, market will be vulnerable to the often latter day ramp. A close in the 1650s though...looks out of range.

12pm update - Boehner flips over the cart

The bulls were comfortably holding gains...until one of the US political maniacs proclaims he is bullish Syria-war. The headlines indexes have lost half their gains. Metals are benefiting, with Gold +$13, and Oil now +0.25%.


sp'15min

sp'60min

Summary

Its turning out to be a bit of a mess.

Certainly though, I'm still not getting involved. Bears need good follow through, and I just don't see that viable today.

Oh well, we shall see.


VIX update from Mr P.



time to cook!
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12.23pm... Despite a little more weakness, I'm still guessing the hourly 10MA holds...1637. 

11am update - market teasing the bears

The main indexes see a minor slip from sp'1651 to 1645, but its very likely just a little tease. There is no power on the downside likely today..or tomorrow. Bulls look set for a close in the 1650s..and that should open up 1665/70 by early Thursday. Metals are holding gains.


sp'60min

sp'daily4b

Summary

Indeed, I think Mr Market has just teased the bears..with further upside/melt across the day.

Surely, no point in getting involved today.

VIX is -2.5% or so...a close in the 15s would certainly be suggestive of further equity gains for Wednesday.


11.24am..hmm, interesting..we're seeing the biggest 15min drop in some days...1642s.

A break <1636 would make things real interesting. Regardless, I ain't getting involved.

 *it would seem market is annoyed with Boehner pro-war comments 


11.31am.. sp'1639s...hmm..and cycle about to go negative. Well, those shorting the open...are enjoying this little drop..the biggest 15min intra-day drop in weeks.perhaps months.

10am update - breaking into the 1650s

The main indexes are higher by around 1%, although the Trans/R2K are +1.3/1.5%. VIX is naturally lower by 4%. Bulls look set for further gains across the next day or two. Precious metals are higher, especially Silver, +4%.


sp'60min

vix'60min

Summary

*special note...

There are some VERY interesting issues right now with the weekly/monthly charts, but more on those..across the day.
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Suffice to say, we're seeing a stupid lurch higher to start a short week. I've little doubt the QE will help prop up this nonsense across ALL of today..and into tomorrow.

I most certainly will not be re-shorting the opening gains. I've seen this picture before, and it rarely works out well for the bears.
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sp'weekly7

Despite the gains..a red candle....and the 10MA should be 'the wall' to contain this latest nonsense.

*note the lower weekly bol..jumps..into the upper 1570s.
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10.36am... a bit of minor chop...enticing a few bears..but I am not biting.

If we saw 5 waves down..across 3 weeks, then a corrective bounce is going to take at least 1..maybe even 2 weeks! The notion that this is going to fail today...I don't think so.

Pre-Market Brief

Good morning. Futures are significantly higher, sp +16pts, we're set to open around 1648. Precious metals are moderately higher, Gold +$6, whilst Oil is a touch lower, on reduced Syria war fears. Bulls look set for 2-3 days of gains..to the first gap of sp'1655/65


sp'60min

Summary

So..we're set to open as expected in the upper 1640s. and the 1650s look very likely by 10/11am.

VIX will probably be in the low 16s..perhaps 15.75 area.
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*there is $5bn of QE-pomo this morning and that should be more than enough to help sustain the gains, regardless of whether there is any buying volume or not.
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*I am content to remain on the sidelines until tomorrow..or mid morning Thursday. A re-short in the 1660s is the target, with VIX 15.0.