Friday 11 October 2013

Volatility melts into the weekend

With further equity gains, the VIX naturally melted lower into the weekend, settling -4.5% @ 15.74. Across the week, the VIX declined 6%, having earlier peaked at 21.34. Once again the equity bears have failed to get a VIX weekly close in the 20s. Next attempt seems viable in mid November.





The weekly closing candle says it all. Another failed attempt to break the 200 weekly MA. For the equity bears out there, this is just a series of deep disappointments since the broad rally started in Oct'2011.

No some point we're going to see the VIX soar into the 30s, 40s..even higher. Yet, until we get that close in the 20s...equity bears simply can't be confident of anything significant in the near term.

Again, keep in mind that the 2012 VIX high was 27s, and it is again doubtful that we'll be able to match that in the remainder of this year.

more later..on those bullish indexes

Closing Brief

The main indexes built on the Thursday hyper-ramp, with the sp +10pts @ 1703. The two leaders - Trans/R2K, closed with +0.6% and +1.4% respectively. The precious metals closed weak, with Gold -$17. Oil recovered half of the opening drop, but still -0.9%. VIX closed -3% in the upper 15s.



..and another wacky week in market land comes to a close.

Regardless of how we open next Monday morning, the bigger weekly charts are offering at least a few more weeks to the bears, its arguably time to sit back..and take a break.

Good to hear from some of you today..and across the week. It does help to know you're out there!

Have a restful weekend everyone!

*next main post, late Saturday, probably on the World monthly indexes

3pm update - rough week for many

Despite net weekly gains of just 0.6%, it sure feels like we're ending the week with massive gains. Regardless of where we close this week, its been a rough one for bears and bulls alike. Metals remain very weak, Oil continues to show signs of a recovery. VIX looks set to melt lower into the close.



Certainly..not a boring week!

My satellite dish is unable to pick up CNBC today. As you might understand, I'm...devastated. Can someone let me know if Bartiromo says 'we're off the lows of the day' ?

*I hold Oil (long) across the weekend, via USO.

A good reversal candle to close the week

updates into the close..if I don't fall asleep.

3.39pm..the micro 5/15min cycles look prone to a rally into the close.

further.. all the cycles are now almost fully reset for a major jump higher at the Monday open into the sp'1710/15 zone.

*With major QE on Tuesday...the first half of next week looks to be a really bad time for the bears.

3.49pm..looks like the algo-bots are gunning for an sp'1700 weekly close.

2pm update - afternoon chop

Whether the sp' closes in the 1700s really shouldn't be important to the equity bulls, who have already seen a very clear turn upward. A weekly close >1692 looks very likely, and is more than enough to offer clarity for next week. The VIX will similarly likely melt lower into the weekend.


R2K, daily


Most notable index of the day, the R2K, which is seeing very strong gains, and is already close to breaking new historic highs.

Ohhh the humanity of it.

1pm update - weekly charts with a clear spike floor

The main indexes continue to see follow through from yesterdays hyper-ramp. On the bigger weekly cycles, we have a pretty decisive spike-floor. A minimum of two weeks further upside seems likely. The remaining question is...then what?



I could over-complicate it, but really. what is there to say?

We have a very clear spike on the weekly candle...on channel/trend support. Based on previous cycles..we should get at least a few more weeks to the upside.

*The 'Deflationland' target of sp'1750 looks right on track for late Oct/early Nov.

On any basis, that would make for a far better level to launch a re-short..if conditions look toppy.

Video update from Biderman

*Indeed, the shutdown was always a minor issue, and the interest payments can easily be paid.

The politicians have just been playing mind/fear games with the ignorant masses again. 

You can see a daily reversal candle on Oil.

*I am long from 36.50..looking for an exit in the mid 37s next Mon/Tuesday.

12pm update - nasty market

It remains a nasty market, with the sp' set for the 1700s. The only issue is whether new index highs are coming in the weeks ahead...the weekly charts would suggest yes. Metals remain weak, with Gold -$19. Oil is recovering from the opening low, now -1.1%. VIX is almost 5% lower, in the 15s.




Suffice to say...a lousy end to the week for those still resolutely holding on the short side.


VIX update from Mr T.

time for lunch

11am update - micro down cycle

The main indexes have peaked at sp'1696, and we're seeing a very minor down cycle. Whether we level out at 1690, 85..or even a bit lower, really doesn't seem important. The market will likely see renewed strength in the late afternoon, with the VIX melting lower into the weekend.




We have seen a very strong swing from a Wed' low of this mornings 1696. A truly stupid 50pt ramp across just 14 trading hours.

Even if the next wave higher is only half as powerful..that should get the sp'1720s next week, at which point, you just know how bullish the cheerleaders will be on clown finance TV.

*Oil is starting to recover from the sig' opening gap lower of almost 2%. A positive close would be a real bonus to yours truly. Regardless, I'll hold USO long into next week.

11.36am..well, we're already back to 1696, and the 1700s look likely today.

For the bears..a terrible..and cruel end to the week, after what had seemed the first sign of an initial break. But hey...we know who to blame..and hey...its not like Boehner not done this before.

*Oil is choppy, but its holding the opening low..and it looks prone to good upside on the hourly/daily charts for next week.

10am update - pushing upward

A touch of weakness at the open, but the indexes are already making a play for the sp'1700s. Indeed, a weekly close in the 1700s seems likely, with the VIX melting lower. Metals and Oil are trying to recover from their opening declines.



I wish I could be bearish about the immediate term, not least for some kind of pull back. It would seem though, we're broadly headed up for a few weeks.

Yes, there is uncertainty until an actual bill is passed, but it would seem we will get the can kicked out to next month.

*I have exited a small SLV position (short)..that worked out okay.

Am now long Oil..via USO, and will hold that into next week. If equities are going to rally from here, then Oil will likely be part of it.

USO, daily2

stay tuned!

Special update, on the weekly rainbow charts...flipping to outright bullish.


As I feared, it looks like we might close the week with very bullish charts..and next week target will be 1720/30s. 

Pre-Market Brief

Good morning. Futures are a touch lower, sp -2pts, we're set to open at 1690. Equity bulls should be content with any close in the 1680s, considering the earlier action this week. Metals are significantly lower, with Gold -$18. Oil is also especially weak, -2%.



Well, its been a rough week for many out there.

Considering the power of yesterday's daily candle, I'm going to guess we close in the low sp'1700s today, which should be enough to turn the weekly charts back to outright bullish.

*I will look to exit a small SLV (short) position early this morning..and that will suffice for me this week.

Thank the gods..its almost the weekend

Naturally, Mr Permabull thinks Boehner is Santa claws...


9.44am... exited SLV short.... am long USO (oil)...will hold over the weekend.
If equities are going to have another ramp..Oil will likely be part of the party. I can't stomach meddling in the indexes, but I can manage Oil.

Same Boehner, different day

For equity bears, the US political maniacs are always a serious wild card. With Boehner once again caving in, it would seem the debt ceiling can will be kicked into November. The only issue now is whether new index highs will be seen in the coming weeks..and then what...another debt ceiling kick?


Dow, weekly


If we close flat or see more upside tomorrow, it would clarify that the recent weakness was indeed just another cruel tease to the bears.

The Dow weekly chart is still particularly weak, and I wouldn't be overly confident on the bullish side until we see a few daily closes in the 15700s.

Despite the gains today, the weekly indicators all remain very bearish, whether its the RSI, the MACD, or stochastic. I suppose we could reverse lower on Friday, but really, the hourly/daily charts argue against that bearish outlook.

Looking ahead

The only econ-data tomorrow is consumer sentiment, but I don't think Mr market will much care about that. The only thing that seems to matter is whether the can will get kicked forward another six weeks.

*there is no sig' QE-pomo until next Tuesday.

Avoiding the carnage

Having been whipsawed a few times in the past few weeks, yours truly at least managed to be well clear of today's nonsense. I am likely going to continue to largely leave the market alone for some weeks. I've an SLV (short) trade right now, that is working out okay, but I'll look to exit even that, ahead of the weekend.

I think most out there are burnt out on this nonsense. This market is up 20% on the year, and the QE just keeps on flowing. No doubt the politicians on capitol hill will continue to play their games in the weeks and months ahead. It is probably fair to say...their behaviour will never advance beyond 'petty'.

Goodnight from London

Daily Index Cycle update

With Boehner and Obama apparently likely to agree to kick the debt ceiling can forward six weeks, US equities saw huge gains, with the sp +36pts @ 1692. The closing daily candle was a powerful one, and highly suggestive of further gains into the weekend.





The Dow breaking the 200 day MA yesterday was an especially bearish sign, and with the first lower low - since Oct'2011, things were actually starting to turn to the bears. we are again, with the market soaring over 2%, and the bears smashed to pieces. Those not already short-stopped out should be pretty concerned that we could close the week in the sp'1700s, and then you know the mainstream will be screaming for new all time historic highs next week.

It remains the nastiest market imaginable. For the has been a market that periodically teases with minor declines...but then whipsaws right back upward.

*underlying daily MACD (blue bar histogram) is set to go positive cycle next Monday, and I have to assume we'll just keep on rallying, at least for a few weeks. The sheer...horror of i :(

a little more later...