Wednesday 4 September 2013

Volatility still on the slide

With the US equity indexes building gains across the day, the VIX naturally slipped, settling -4.4% @ 15.88. VIX looks set for the 15.50/00s, before the next surge, which might lead to the first hit of the 20s since late June.




Today's decline in the VIX was very much expected.

I have to expect the VIX to fall at least a little lower on Thursday, whether at the open, or later in the day.

The low 15s - along with sp'1660s would seem a very valid level to launch a new market-short.

more later..on the indexes

Closing Brief

The main indexes built gains across the day, with the sp +13pts  @ 1653. Near term trend looks moderately bullish, with further upside into the low 1660s. Broader picture remains bearish, with a primary downside target of the 1580/70s..with VIX in the low 20s.



*price action on the hourly chart looks like a micro bull flag, with good support above the hourly 10MA of 1647.

Well, I'm glad I've been giving the bull maniacs some time to bounce. Today's move was the sort of thing we've seen a few hundred times across the last few years.

No reason why tomorrow won't open higher, then we'll see whether the bulls can hold the 1660s for more than an hour or two.

*I am seeking to short the main market early the sp'1660s, with VIX in the low 15s. Even if the sp'1660s are hit tomorrow, I think market should close the week in the 1640s..if not lower.

bits and pieces across the evening.

3pm update - bulls holding gains into the close

With the algo-bots tolerating the latest Fed book, the market is able to hold the gains, and looks set to climb into early Thursday..when there is QE of $3bn. Metals remain weak, with Gold -$21. Oil continues to weaken.. -1.25%.



Frankly, I have been cheering this nonsense higher since yesterday morning.

For those bears still on the sidelines...higher prices early tomorrow..will be sorely tempting to short.

I for one..will most definitely be looking to short the Thursday open...if in the 1660s, with VIX 15.50/00.

updates..into the close...

3.15pm.. an actually fun/interesting debate on clown finance TV, with Pento highlighting the issue of 'real inflation, fed balance sheet, and int. rates'

It has to be will the market cope with 10yr yield of 3% ?

3.30pm.. a touch of chop..but we should close in the 1650s..and that will easily allow for a test of the 1660 - where the 20 day MA is lurking..along with a few other resistance levels.

VIX -3.5%..a close in the 15s...I'd guess.


No point any bear getting overly excited at the 3pt drop... strong support around 1650.

3.48pm.. watching bloomberg aka...clown finance TV'2...

They just did an item on the $1200 haircut. that has to be a bullish sign of economic recovery, yes?

2pm update - time for another Fed book

The market is continuing to build gains, with the main indexes now around 1% higher. The issue now is how the algo-bots interpret the latest Fed 'beige book'. A rally into the low sp'1660s now looks viable by the close. The 1670s look viable as early as tomorrow.



Well, lets see what the bots make of the Fed 

Frankly, the higher this goes..the better..and more safer the next short trade will be.

With QE tomorrow morning, I'm inclined to give the bulls another 4 trading hours at least.

2.02pm..looks like the initial reaction is moderately positive..and bulls should be okay now into early Thursday.

2.12pm... hourly 10MA should offer support around 1648/50 by the close. I can't imagine anything <1644.

Its quiet out Mr Santelli on clown finance TV further confirms.

1pm update - bull maniacs face huge resistance

The market is holding index gains of around 0.8%, with the sp' comfortably above the Tuesday brief spike-high. Bulls look set for further gains, but there are multiple layers of resistance. The notion of new highs . >1709 in the near term remains nonsense.




Consensus is for 5 waves lower, and we're now in day'5 of a larger bounce/wave'2.'6..and that should be just about enough time, before the next wave lower.

*the rising 200 day MA is now in the mid 1560s..and again, I'm inclined to think the June 1560 low is now out of range.

I remain on the sidelines, seeking to short the market early the 1658/62 zone..with VIX 15.50/00

1.20pm... Bears should keep in mind the Fed beige book is due at 2pm..and I am slightly concerned market might jump into the low 1660s.

if that is the case..the 1670s will be viable at the Thursday open...and then..maybe a DOUBLE gap fill....all the way into the 1680/85 zone.

Certainly..for those already is lousy.

12pm update - market trying to break over the gap

The market is looking good for gains into late afternoon, and probably also early Thursday. The 1660s - where the 20 day MA is lurking, look set to be tested. Metals remain very weak, whilst Oil is also lower by around 0.9%




Things remain on schedule.

Bears...should be in no hurry to short least until Thursday 10/11am.

Target remains ..1660s..with VIX low 15s.

VIX update..from Mr S


11am update - bulls battling higher

The main market is holding moderate gains, and unlike far..the gains look rather secure. A close in the sp'1652/56 zone looks very viable, so long as the algo-bots like what the Fed beige book says at 2pm. Precious metals remain very weak, with Gold -$20



Suffice to say, things look on track.

A continued bounce..into early Thursday - where we have a mid size QE of $3bn.

I will be seeking to launch a heavy market short...perhaps, in VIX 15.25/00 level.

10am update - choppy open

The main indexes open with some mild chop, yet the bulls are comfortably holding above yesterdays low. On balance, market looks set to close in the sp'1650s, with VIX in the 15s. Precious metals are weak...having tested old resistance.




Well, as a self proclaimed permabear, I have to note, I sure don't smell any trouble out there today.

Bulls should (in theory) be able to battle the market higher today.

So long as the algo-bots like the Fed beige book this afternoon..the market should be able to close in the 1650s...and that opens up a test of 1660 -where the 20 day MA is lurking.

10.16am....amusing to see the cheerleaders on clown finance TV get mildly hysterical bullish again.

As it is, a break >1652...will open up a test of 1660/62...I do NOT expect 1670 to be broken in the near term.

Pre-Market Brief

Good morning. Futures are flat, sp is set to open at 1639/40. Precious metals are weak, with Gold -$13. Oil is a touch lower. Bulls should be aiming for another break into the 1650s by late afternoon, when the Fed beige book is issued.



Well, it has to be said, it remains an unsteady market...within a broader down trend.

Bears can comfortably tolerate another move into the 1650s..even 1660s without doing too much damage to the bearish outlook. So long as no breaks (and daily closes) in the 1670s...things are looking good.

*I remain on the sidelines. I don't intend to get involved until after the next QE of early Thursday, although as ever...I will try to keep an open mind.

Certainty though, I won't be going long, whilst the bigger weekly charts are still pushing downward.

Notable mover: AAPL, +$10 (2%) to $499.

9.44am.. sure is a choppy start, but bias is to the upside.

Bears have real problems today..and early tomorrow...baring another war-talk comment from Kerry..or someone.

I remain seeking a re-short..from the sp'1660s..with VIX 15s.

US Market remains twitchy

The new month has started with moderate equity gains, but across the coming few weeks, general downside is still expected, to around the sp'1580/70s. The June low of 1560 now looks out of range, even if the market is spooked by a US attack upon Syria.




Most notable - from a bigger perspective, we have the second red candle on the weekly 'rainbow' charts..and that was despite net gains on the day.

In the previous Sept-Nov multi-week down cycle, the weekly 10MA proved to be key resistance, and that is currently 1668. Thus, I am seeking a 'price wall' in the upper 1668/72 zone this week.

Monthly charts (slowly) rolling over

We're only one day into September, but still, the monthly indicators are somewhat interesting to consider...

sp'monthly3, rainbow

Note, we have a second blue candle. The MACD (green bar histogram) cycle is ticking lower for the second consecutive month. The big level to break is the rising 10MA...currently 1580. All things considered, it looks to be overly difficult for the bears to achieve a monthly break AND close below the least until October.

Looking ahead

The main aspect for Wednesday will be the latest Fed 'beige book' (due 2pm). I have to guess the market will somehow manage to spin that as a positive, and will rally into late Wed..and early Thursday.

*the next significant QE is not until Thursday

Well, today was certainly a lot more dynamic than I had expected, and despite being overly cautious - and not 'bravely shorting the open', I am content with things.

I will be seeking a major index re-short, early Thursday, preferably in the sp'1660s, with VIX in the low 15s. I have to guess the market will see at least 'some' further weakness into the weekend.

late night extras...

Surprisingly (I thought his free updates had ended) another video update from Walker...

Keep in mind, one of his uber-doom scenarios is similar to my 'best bear case', with the low sp'1400s for Oct/Nov


I should add, I no longer think 1560s are viable in the current multi-week down wave, and I am guessing sp'1580/70s at best, hence the now slanted neckline. That will still offer a very good H/S formation by early October long as the 1709 high is not broken.

Goodnight from London

Daily Index Cycle update

The main indexes closed moderately higher, with the sp +6.8pts to 1639.7, having earlier jumped to 1651. The near term trend looks moderately bullish, although within what is a broader down trend. Primary downside for September is currently in the 1570/80s.



The daily candle is certainly something of a bullish failure. Yet, the 1627 low is holding, and the close on the border of the 1640s keeps the door open for a brief foray into the 1660s this Thursday.

Underlying MACD (blue bar histogram) cycle ticked higher for a third day, and we're set to go positive cycle by the end of this week.

*I remain on the sidelines, seeking an index re-short in the sp'1660s, probably this Thursday morning.
a little more later...