Tuesday 5 November 2013

Volatility a little higher

With the main indexes closing moderately lower, the VIX settled +2.6% @ 13.27. The VIX has a small opportunity of spiking into the 15/16s later this week - if sp'1730s.  VIX 20s look unlikely in the remainder of the year.




The US equity market is awash with a mountain of QE-pomo money...the 'benny bux'.

Volatility has effectively collapsed since the recent low of sp'1646, and I'd be surprised if we see VIX 20s before mid/late Jan' 2014.

There is a small chance of VIX 15/16s later this week (bad monthly jobs data?), but then...bad news is...good news...right?

more later..on the indexes

Closing Brief

The main indexes closed moderately mixed, with the sp -5pts @ 1762. The two leaders - Trans/R2K, closed -0.5% and -0.4% respectively. Near term trend is a touch weak, but market should comfortably hold the low 1730s..before the next wave higher.



*eyes on TSLA, earnings at the close.

For the bears..a typically frustrating day. Early declines of 0.4% barely held for an hour..and even the Dow swung from -110 to +10 or so.

I realise it annoys some of you out there - least of all, coming from me, but..really.. how can anyone tout any significant declines in the remainder of this year?

the usual bits and pieces across the evening :)

UPDATE 4.28pm

TSLA earnings were okay. EPS of 12 cents vs 10 expected.
Car sales were projected to be a touch lower than some were looking for.

TSLA is -10% in AH.

A break <153..will open up my target zone of 110/100..within a few weeks..perhaps days.

Certainly though, the Q3 earnings were 'not bad'.

3pm update - weakness into the close?

On each of the recent minor up waves, the market remains stuck around sp'1766/68. The micro 5/15min cycles are both suggestive of weakness into the close, and the hourly/daily cycles are also moderately in favour of the bears.



Certainly, I'm not calling for the 1740s, but the upper 1750s are viable for the Tuesday close.

Lets see how many of the rats want to sell.

TSLA earnings at the close...and it will surely be a major mover.

3.13pm.. micro cycles are saying we go down..from here... sp'1766.

3.25pm... and down we go. !750s will be..difficult, but all the cycles ARE lined up for the bears.

3.52pm... sp1764.. a  huge 2pt collapse.   ...tiresome. 

2pm update - another chance into the close

The main indexes are mixed, with the Nasdaq a touch higher, with the Dow -11pts - having earlier -112. Even a close in the 1755/50 zone looks..difficult. Metals remain weak..causing problems for the miners. Oil is relentlessly lower, -1.2%, and back to the lows of June.



I still have to guess Mr Market wants to at least trade a little lower, but really..any down move is arguably untradeable in such conditions.

Best guess. a close in the 1757/53 zone.

More interestingly...TSLA earnings at the close (and I realise I incorrectly said that yesterday, urghh).

I still think this nonsense is vulnerable to $110/100, not least with momo stocks like NFLX and FB both seeing huge downside reversals after initial gains.

1pm update - same old problems

Bears are struggling to keep the indexes even moderately lower, and the Nasdaq is already fractionally higher. VIX has lost the earlier gains, and is back in the 12s. Metals are weak, but most notable..Oil is getting whacked..now -1.2%.


USO, daily


Oil is back to the lows of June..when sp' was 1560.

What a thought!

Best guess..late day weakness, but as a few people have suggested lately, rather than price declines, the market could just trade sideways for a few days..before the next up wave.

For the bears out there..this is indeed relentlessly frustrating.

12pm update - moderate weakness

The indexes are holding minor declines of around 0.3%, certainly nothing for the equity bulls to get concerned about. Bears still lack general downside power, at best...near term downside to the low sp'1730s..before another wave higher..into the 1800s.



Well, we ain't up...I guess the bears can say that much today.

FB is trying to hold the 50 day MA..and battle higher..

VIX update from Mr T.

Indeed..low volatility for the rest of the year.

11am update - astoundingly lower

The main indexes remain lower..by a shocking 0.25%. No doubt some of the doomer bears are getting overly excited by this mornings red open. After all, sp'1775 was a key multi-month..even a multi-year top..yes?



The hourly charts are offering a close in the 1740s..although that sure won't be easy.

VIX is higher, and the 14s are viable by the close, if market can battle lower across the day.

Notable mover remains TSLA, after hitting 181, its now in the red, 173.

TSLA earnings (I think) were shifted to the Tuesday close...so...that will be something to watch.

10am update - bears have an opportunity

The main indexes are moderately lower. The hourly index charts are rolling over, and the daily index/VIX charts are similarly due to snap. This is probably the only decent chance this week the bears are going to get. There looks to be viable downside to the low sp'1730s.




This is probably the best opportunity for a down wave in over a month.

The only issue is..how much? Considering everything..I'm sticking with the sp'1735/30 zone.

Ironically, worse case for the bears...sp'1730s..and then a major whipsaw back higher..with a lot of bears not exiting.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -5pts, we're set to open around 1762. Metals are a touch higher, whilst Oil is flat. Equity bears have their best chance until early Wednesday of a move down to the sp'1735/30 zone.



So..we're set to actually open a little lower!

Equity bears really do have a reasonable chance of a down wave into tomorrow. Arguably, bears need to break into the 1750s by late morning to have any chance of a Tuesday close in 1740s..which would make the 1730s viable for tomorrow.

With no sig' QE today...lets see what the bears can muster.

Video updafe from Mr Permabull...

Looks like Oscar is seeking Trans 7300s, which I am too. Maybe we'll see a multi-week rollover from there...certainly no later than mid December.

Notable early movers: TSLA, +$4 @ 179. , earnings at the close (really, I think so...today)


9.03am.. sp -8pts...so we're set to open in the 1750s...!

This at least makes for some interesting action..after yesterdays boredom.

Remember Remember the fifth of November

The market started the week in a quietly bullish mood, with the underlying upside pressure still clearly there for all to see. The bigger weekly/monthly charts are offering a further 2-3% upside this month, with the sp' likely to break into the low 1800s.

sp'monthly3, rainbow



A quiet start to the week...it can only get more lively from here..yes?

There is the Twitter IPO on Thursday (gods help us all), and we have the monthly jobs data on Friday. Surely the market will see at least somewhat increased volatility as the week progresses?

Best guess remains...sp'1730s..before another wave higher into the 1800s later this month. I should add, I don't believe any wave lower is worth attempting to trade on the short side. Overly risky..with only moderate downside available, verses the relentless algo-bot melt.

Deflation is still an issue

I've not highlighted the CRB index for some months, but commodity prices are still very weak. The current reading of 273 takes out the summer low. Next level is the June 2012 low of 266.

CRB, weekly

There is downside to the 230/220s in early 2014, which is remarkable when you consider the general macro-economic picture, and the QE from various central banks. So much for underlying price inflation!

Indeed,the discrepency between stocks and commodity prices has never been bigger.

You can see how 'something' changed in spring 2011..and after 2.5yrs, the market just keeps on pushing higher, whilst commodities are slipping back to the 2009 collapse wave lows.

Looking ahead

The only noteworthy econ-data for tomorrow is ISM non-manu', but I don't think Mr Market will much care about that.

*next sig' QE is Wednesday

Bearish fireworks for November fifth?

Certainly, the hourly index charts are all primed for a decline tomorrow. At best, maybe we can close somewhere in the 1750s, with follow through downside in early Wednesday.

I continue to see a great many out there tout much lower levels, but really, anything <sp'1700 in the near term seems extremely unlikely. It would seem the only fireworks being launched this week, will be for the Twitter IPO.  As I noted at the weekend, equity bears may as well come back in 4-6 months.

Goodnight from London

Daily Index Cycle update

The main indexes closed moderately higher, with the sp +6pts @ 1767. The two leaders - Trans/R2K, both gained around 1.1%. There remains huge underlying upside pressure, and equity bears must not get lost in mild hysteria, if the market falls into the 1730s later this week.





This was always going to be a tough week for the bears, not least with three significant doses of the QE-pomo fuel. We're continuing to broadly rise from sp'1646, with the 1800s now increasingly viewed as viable by the mainstream.

The most notable issue remains the disturbing strength seen in the Trans and R2K, both of which powered significantly higher today.

For the equity bears out there, even if there is any minor wave lower later this week, it will likely be brief..and arguably untradeable.

a little more later...