Thursday 24 October 2013

Volatility melting lower

With the main indexes holding onto moderate gains, the VIX slipped a little lower, settling -1.9% @ 13.19. The VIX looks set to remain in the mid/low teens for the rest of the year. It remains a fearless market, with the mainstream realisation that QE-taper is unlikely until late spring 2014.




There is little to add. VIX remains low, and at best..a brief spike to the 15s looks possible, before falling again into early November.

Right now, VIX breaking back above the key 20 threshold looks almost impossible for the remainder of this year.

more later..on the indexes

Closing Brief

The main indexes closed moderately higher, with the sp +5pts @ 1752. The two leaders - Trans/R2K, saw daily gains of +0.9% and 0.7% respectively. The broader mid-term trend remains to the upside, and the sp'1800s look viable in November.



*eyes on AMZN and ZNGA, earnings at the close.

The immediate trend remains to the upside, but I remain highly suspicious of a minor down wave tomorrow, not least with end-week profit taking, and no sig' QE-pomo.

more later..on the VIX

UPDATE on earnings.

AMZN EPS  -9 cents for Q3,...naturally the stock is +6% in the mid 340s. The stock remains wrapped in hysteria. Same old...nonsense!

ZNGA -2 cents, but is +15%, in the $4.10s

3pm update - equity bulls still pushing

The main indexes are holding the sp'1750s, although there remains risk of downside to the 1735/30 zone. With the broader weekly/monthly index cycles pushing higher, short-index trades remain overly risky, and generally pointless.



It remains a tricky situation to call, in terms of the smaller index cycles.

There is relentless underlying upside pressure, but with risk of a downside wave to the low sp'1730s. As ever, for those with trading stops, such uncertainty is not particularly relevant.

Earnings due for AMZN and ZNGA, both will be pretty interesting to see..

AMZN, daily

AMZN is arguably the most over-valued and hysteria surrounded stock of the entire market. Certainly, many bearish traders have looked for it to collapse at each earnings cycle. The mainstream still love the company..despite the lack of any significant profit in some years.

My guess for AMZN? Based on previous cycles - and the current main market, I'd have to think it will jump higher.

As ever though, I simply don't trade any of the 'hysteria' stocks. Too crazy/unstable for me...but certainly...quite entertaining to watch.

3.30pm..the smaller 15/60min cycles look VERY prone to downside in the closing 30mins..and early tomorrow.

We're due to go negative MACD cycle within minutes.   stay tuned!

3.41pm...price momentum now negative on the 15min cycle..should in theory see weakness into the close.  Equity bears should consider any daily close <1750 a real bonus.

2pm update - market sure feels tired

Despite underlying upside pressure - as clearly displayed with the Transports in the 7000s today, this market sure feels tired. Another minor wave lower to the sp'1735/30 zone looks increasingly likely into tomorrow, when there is no QE for the equity bears to be concerned about.



The price action really does look primed for a little wave lower into early Friday.

An obvious gap fill in the low sp'1730s would make for a good early morning low, before some sort of a minor recovery into the Friday close.

For now..that remains my best guess.

VIX remains very low, but is offering a turn higher, and suggestive of equity weakness.

VIX could briefly spike into the 15s, which would equate to sp -15/20pts.

2.36pm.. sp'1752, at the high of the day. Still though, price action is suggestive of a tired market.

*AMZN, ZNGA earnings at the close...certainly worth watching!

1pm update - underlying upward pressure

The market is clearly struggling a little after a 113pt ramp from sp'1646 to 1759. Yet, the underlying pressure is still very much to the upside, with the Transports now in the 7000s. Metals are holding gains, with Gold +$16, Oil has recovered back to flat, after earlier declines of 0.9%



A tricky day in terms of projecting the smaller index cycles.

There remains risk of a very minor down wave to the sp'1635/30 zone, but for anyone going short, the risk is overly high...and the Transports is a fine reminder of that.

Notable weakness in DRYS, which having failed to hold $3, is now in danger of a full retrace to the original breakout level, around $2.25 - where the 200 day MA is lurking.

DRYS, daily

For those who believe in 'general' equity upside into spring 2014, DRYS is a tempting target in the low $2s.

12pm update - Transports breaks into the 7000s

Without question, the most notable aspect of today is the Transports index breaking into the 7000s. The weekly charts are offering 7200/7300 in November, which might equate to sp' in the low 1800s. Metals are building gains, gold +$16, Oil remains weak, -0.5%

Trans, daily

Trans, weekly2, rainbow


*I want to note that Mr Permabull - Oscar Carboni, was the first to suggest Transports in the 7000s. I forget the precise time, but I believe it was in the very early spring, Feb/March.

I myself ended up resigned to Trans'7000s this year a month or so after Oscar first touted it, once it became clear that the QE fuel just won't be ending any time soon.

time for lunch

11am update - morning chop

The main indexes are moderately higher, but there is a touch of weakness in the air. Equity bears have a moderate chance of a break into the sp'1735/30 zone, which should hold as good support into the Friday close. Metals are building gains, Gold +$10, whilst Oil just keeps on sliding, -0.9%.



Best guess..a minor skirmish this morning, with the bears managing a further minor wave lower. It is difficult to guess whether yesterdays low of 1740 will be broken late today..or not until early tomorrow.

Certainly, there is a pack of econ-data tomorrow, and that would be a good excuse for the market to sell lower..if only briefly.

*have you noticed how many (not least the cheer leaders on clown finance TV) are now starting to tout the declining Oil/gasoline prices as a 'green shoot' for the economy into next spring?

The mainstream is absolutely desperate for these equity markets to close the year on a very positive note, although they are right to note US gas prices in the low $3s would certainly help the Christmas retail trade.

TSLA is bouncing

..but ANY break <160..and door opens to 110/100

11.35am... sp'1651...hmm, bears getting frustrated, as underlying strength continues.

Tricky day though, still risk of a little washout into early Friday, but with the weekly charts pushing higher into November, no point in taking any short trades.

*metals still building gains, Gold +$15. GLD in the 140s would be the natural target, and that is a good 10pts higher!

10am update - wash out the weak bulls

The market has tried to rally into the sp'1750s again..and failed. Before making new highs, it would seem Mr Market wants to wash out the weaker bull hands, with a brief break <1740, perhaps filling the gap in the low 1730s. Such a decline still won't do anything to the broader up trend.




There is good multiple support in the 1735/30 zone, and that's assuming the bears can manage even that.

As I've said a few times lately, I'm really starting to believe the market won't see sub 1700s for the remainder of the year.

Yes, the daily MACD index cycles are rolling over, but underlying pressure is so strong to the upside, I don't think the bears can do it.

Anyone think there is a hope in hell of taking out the Aug' low of 1627?

*watching clown TV, the Cramer has reminded me of a stock I've not look at in over a few years.

AEM, one of the gold miners, having a major jump today...

Still, its a long way down from the high $50s last year. Last weeks doji turn candle has been arguably confirmed with a huge weekly far 18% this week.

If metals can rally (even if for just 3-5 weeks) AEM should at least break into the 35/40 zone.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +5pts, we're set to open around 1751. Metals are slightly higher, Gold +$5, Oil is again weak, -0.4%. Equity bulls have an opportunity to push the market to the 1760s today.



*weekly jobless; 350k , vs 335 expected.

So, moderate gains to start the day.

There is a small risk of downside, best bear case is 1730, although that seems very unlikely considering the bigger weekly price momentum.

If the market likes the FOMC next week, we could even close the month pretty close to the 1800s, which would frankly surprise just about everyone..except yours truly.

notable early movers: AKAM, -9% @ $47, on bad earnings, FFIV +5% to $90, on good earnings !

Mr permabull looking for a pause day


I'm not here to be popular

With the main indexes holding within a very powerful up trend, it remains ever more bizarre to see continuing sporadic posts about an 'imminent market collapse'. There is simply nothing bearish right now, and yet strangely...some continue to see things otherwise.


sp'weekly4 - hyper-bullish outlook


If I wanted to, I could probably double my web traffic (literally overnight), all I would have to do is issue a post with the title 'sp'1000 within 6 months'. Yet, I'm not interested in going that route of touting doom merely to attract attention, not least when I no longer believe in it myself.

Permabear... not so Permabearish

No doubt some of you are getting increasingly annoyed by my lack of 'doom' posts. Despite my chosen name, I will endeavour to post things as I see them.

As a number of traders/posters have noted across the last few months, there is often a backlash - sometimes pretty fierce, whenever someone perceived as a 'doomer' touts anything even remotely bullish.

I'll sure as hell tout further upside until I see either QE end (in full, not the taper nonsense), or a huge deterioration in the economic fundamentals.Neither of those two issues look likely in the mid-term (3-6 months), and thus..I continue to see further 'broad' upside into spring 2014.

A video from 'Thanos', which brings up part of what I was raising yesterday...

The 'Greg' character that Thanos is referring to, continues to tout 'imminent crash', day after day on youtube.  It has become more than just boring, or just a 'bad trading call'. It is becoming somewhat contemptible. That is probably overly harsh on my part, but still, its not like we're in the sp'1500s..or even the 1600s anymore. We're in the mid 1700s, and the 1800s look very likely next month.

Anyway..enough of that. I would hope you get the point by now.

Looking ahead

Thursday doesn't have much, other than the usual weekly jobs data, but Mr Market certainly doesn't seem to care much about that lately.

*the next Sig' QE-pomo is not until next Monday.

Where will we close this week? The sp'1740/30 zone looks a very tough zone for the equity bears to break and hold below. Indeed, considering the QE, and mainstream confidence that QE-taper can't occur until at least next March, a weekly close in the 1750/60s looks viable, which will keep the broader upward trend very much on track.

Goodnight from London

Video bonus from Walker - Chart Pattern Trader

Always worth seeing, for those that have the time!

Daily Index Cycle update

The main indexes generally closed moderately lower, with the sp -8pts @ 1746. The two leaders - Trans/R2K, closed +0.7% and -0.4% respectively. Near term trend remains to the upside,  and baring a break back under 1730, equity bulls have little to be concerned about.





So, a day where the market actually closed red! Well, except for the 'old leader' which is making a play to break into the 7000s.

Equity bears have no right to get even remotely confident about the market. One down day does nothing to the short term, never mind the longer term trends.

Underlying MACD (blue bar histogram) cycle is obviously very high, but there remains huge upside pressure, and even if the market were to just churn sideways in price, it will take some weeks for price momentum to turn even moderately to the downside.

a little more later...