Friday 6 September 2013

Volatility fractionally higher

With the main indexes seeing significant weakness in the closing hour, the VIX managed to close a touch higher, +0.5% @ 15.85. The hourly cycle is offering very strong upside potential for Monday into the 18/19s. Across the week, the VIX declined by 6.8%.





The VIX has been melting lower since the spike high last Friday afternoon in the mid 17s.

It would appear the VIX has formed a floor in the low 15s..and if today was a key reversal day, then the VIX should see very strong gains next Mon/Tuesday.

First target is around 18/19, and VIX 20s look viable in the latter part of next week.

*I am heavy long VIX, from the 15.50s (having exited last Friday afternoon in the 17.40s).

more later..on the indexes

Closing Brief

The main indexes closed largely flat, however that was after a steep early morning swoon, followed by a powerful ramp into the early afternoon. A significant sell down into the close left indexes flat, but volatility is indeed returning to the market.



Well, that ended about as best as I could have hoped.

Despite the bulls pushing to sp'1664..the close of 1655 was a reasonable sign the bears have a real opportunity for a major red Monday.


*I am heavy short, via VIX-long, holding across the weekend. Seeking near term VIX 17/18s on Monday, but 19/21 later next week.

Have a good weekend everyone!

**the usual bits and pieces across the evening.

Weekend post, late Saturday, probably on the US weekly indexes.

3pm update - selling into the weekend?

Again, the question is..who wants to be long into the weekend? Considering the bulls have had almost a full day bouncing off the morning 1640 floor, in theory..we should slip lower into the close. The sp'1640s sure won't be easy though.




*have re-drawn the channel on the index chart. Two key levels to keep in mind now... 1640..and then 1627. Once the latter goes..then its very straight forward, should at least fall to the 1580s.

Well, a very dynamic morning, and for the day-traders out there, today certainly offered both sides opportunities to re-position.

All things considered, things look pretty much primed for the bears, especially on the hourly charts.

*I am heavy short the market from sp'1659, will hold across the weekend.

 3.03pm... Ms. Bart' 'we're off the lows of the day'. Yeah...I guess we are.   sigh.

*hourly MACD cycles looking good for the bears...good opportunity here for the indexes to close..RED.

3.10pm.. Santelli with the pig lipstick...and the market is ROLLING OVER.

An interesting 50mins to go.

3.16pm.. the price action is very different from last Friday afternoon. There is even small chance of a major closing 10/15mins...falling into the 1640s..which would set those weekly charts back to bearish.

VIX looks set to close...slightly higher.

3.27pm.. still looking okay for the bears...a close <1657 would be...useful.

3.33pm..the question I am now will Monday open? Now..I'm not expecting any US attack on the sovereign nation of Syria this weekend..but we sure could see some 'developments'..whether more Putin comments, or military build up.

The rats are bailing ahead of the weekend...

Eyes on the VIX. I'd like a close in the 16s.

3.48pm.. SP' struggling to hold the hourly 10MA of 1657....any close under that, and it will set up a fiercely red Monday. 

3.50pm..looking exceptionally good for the close..and Monday.

back at the close.

2pm update - market breaking upward

The market is breaking a little higher, sp'1664s, with VIX in the low 15s (having earlier spiked to 16.81). Bears should continue to seek some degree of weakness into the Friday close, although the sp'1640s now look somewhat difficult to achieve.




Well, the bulls have had a good few hours now...the clock is surely running out for them.

Two hours to go....I remain seeking afternoon weakness...back into those 1640s, which would get those weekly charts back to outright bearish.

Regardless of the latest move, I'll hold short across the weekend. This mornings price action again was a reminder of just how twitchy/unstable this market is starting to become. offering another potencial top. Will only the close.

Frankly, I think things have are looking pretty okay for the bears next week. We have a market that is getting real twitchy on sporadic Syria-related comments..

1pm update - afternoon weakness

The market has put in an intra-day double top at sp'1661. An afternoon break back into the 1640s should be enough to confirm today as a key reversal. VIX looks floored in the low 15s, equity bears should seek a Friday close at least in the low 16s.



*the sp'1668/70 zone now looks out of range.

A long afternoon ahead....lets see if Mr Market will see some weakness into the weekend.

All things considered, I'm very content with my market re-short at sp'1659...and will hold across the weekend.


12pm update - shorting the dumb bounce

The market has seen a very strong 21pt bounce from the early morning 'minor' collapse wave. The daily charts are suggestive today is a key reversal day..and the bounce is merely an opportunity for the bears to re-short. Bears should seek a Friday close in the 1640s.




*I am heavy short the market, via VIX-long, VIX 15.50s/sp'1659.

I am seeking the sp'1580/70s before the FOMC of Sept'18.

I have to say, this morning has certainly been a tough battle to stay focused..yet, the bounce was to be expected...and it looks like it may have maxed out - back at the opening high of sp'1661.

Bears REALLY should be seeking a weekly close in the 1640s..which puts the 'rainbow' weekly candle back to red.

That will set up next week for much lower levels.

For you regulars out there...


Four see this weeks candle turn back to red

VIX update from Mr P.

time for lunch

11am update - utter market mayhem

The indexes have ramped back, and the sp' is now actually net higher. Incredible. VIX is similarly indicating a market that has no fear of the Mediterranean tinderbox of naval firepower. With war-fears, Gold +$17, Oil +1.5%.




What an absolute gods damn mess of an opening 90minutes.

Opening gains..smashed lower.....then a hyper-ramp back.

Just who the hell is buying this mornings drop ?

I mean, seriously, Putin  states he will 'help' Syria..and the market is still able to bounce back within an hour?
- is probably STILL a reversal day...and I am looking to launch a short-entry on the current intra-day bounce.

*I'm guessing the current ramp gets stuck within 45 minutes or so...I'll look to hit buttons then.

Bears should be seeking ANY weekly close in the 1640s...that will open up 1580/ week. looks close to an intra-day top.

standing by to launch a re-short.

11.20am.. HEAVY short the market.. via VIX-long...from VIX 15.50s... and sp'1659.

Frankly, considering the open, I am very pleased with that level.

So...I am now heavy short the US market..seeking a Friday close in the sp'1640s..which will ensure the weekly charts remain outright bearish.

Target for next week is sp'1580/70s

11.37am...well, we're right back at the opening level of 1661...who wants to buy here?

Worse case...1668/70....but that looks real difficult.

Regardless, I'll hold short..across the weekend.

10am update - opening major fail

The opening gains have rapidly swung (1661 to 1643), to rather interesting losses. A major reversal appears underway. If the bulls can break back into the 1660s later today, we probably have a key turn for the next wave. VIX is higher, but only 3%.



Well..its starting to get pretty decisive.

Weekly charts are back to outright bearish...and 1580/70s..are back on the table.

For the swing traders out its either a case of chase it lower..or trying to catch/short the next intra-day bounce.

Hourly charts are showing one hell of a crazy failure...

MACD Cycle might be leveling out though by 11am..if the bulls can battle back into the mid 1650s.

10.06am.. what a damn annoying situation this is.

Market swings 20pts..and now what?

Chase it lower, knowing that very likely going to get head ripped off on any bounce..or sit back and watch it collapse into the weekend?

10.12am.. floor spike on the 15min ?

Regardless, I think we close <1650..and if thats the case, the weekly charts remain on SELL.

I remain on the sidelines, but seeking a major re-short...later today..on the first intra-day bounce

10.48am... fiercely nasty ramp....awful !

What a gods damn mess this morning is.

Clearly, market ramping on 'WW3 going to end better than expected'

Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open at 1662. Precious metals are jumping higher, Gold +18, with Oil 1%. Bulls should be aiming for a break >1669..which will open up the gap zone of 1680/85.



Jobs data: 169k, with a slight tick lower in the headline rate to 7.3%

Broadly speaking, market has taken out another key level..and looks set to test the 1669 zone.

Lots to consider, I will strongly consider shorting the market around 1668/70..if we are there around 10/11am.

Update from Mr Permabull

Stay tuned!

9.28am...well, i'm VERY inclined to launch a reshort on 1668/70 in the next hour.

Lets see how the opening hour trades!

Black candle on the sp' hourly charts....hmm.

Opening FAIL..for the bulls, can't hold the 1660s.

Its very likely just a bounce

The equity indexes continue to battle higher, but the current wave from sp'1627 is probably just a wave 2/B. Those bears still on the sidelines, have a prime opportunity to re-short the main market, ahead of what should be a very strong down wave, back under sp'1600, with VIX in the low 20s.




Well, it was a bit of a dull day. There really isn't that much to add.

*To get the current weekly candle back to red, bears need a Friday close <sp'1650, that will be real difficult if we gap higher into the 1660s.

Bond yields

10yr, monthly'2

A break above 3% looks a given, and then a swift move to 3.25 or so. In the bigger picture though, rates even in the 4s or 5s are historically still very low.

If the economy of the 21st century can't cope with moderately higher bond yields - and general interest rates of 5%, then what does that tell you?

Looking ahead

Friday will obviously be all about the monthly jobs data. Market is expecting net job gains of 175k, with a static rate of 7.4%. Those aren't exactly bold targets, and they will probably be exceeded.

*there is no QE-pomo this Friday. Next sig' QE is not until next Thursday.

Market looks set to make a play for the sp'1670 level, where there are some key aspects of resistance.

*If market gaps straight to the 1668/70 zone at the open, and offers an initial fail (look for black candles on the hourly index charts, and hollow red on the VIX hourly), I will seriously consider a short...otherwise..I'll wait until early next week.

As is generally the case for the bears, there really isn't any reason to be in a hurry to short, in what remains a nasty and twisted market of delusion.

Goodnight from London

Video update from Walker


Daily Index Cycle update

The main indexes closed moderately higher for a third day, with the sp +2pts @ 1655. The two leaders - Trans/R2K, closed +0.6% and 0.3% respectively. Near term outlook remains bullish, with the upper gap zone of 1680/85 a prime target for the bears to re-short the main market.





A somewhat dull and tiresome day to be sitting on the sidelines. Bulls failed to show any significant follow through from yesterday, yet..neither did the bears show any real power on the downside.

Indeed, bears look utterly powerless again, with the VIX simply melting lower, seemingly headed for the low 15s.

re: black count on sp' daily5

If the market starts putting in any daily closes in the 1690s, the count is dropped, otherwise, I'm still going to be clinging to renewed downside in mid/late September

a little more later..