Thursday 7 November 2013

Volatility starting to increase

With the main indexes seeing a rather strong reversal at the sp'1775 high, the VIX battled higher across the day, settling +9.8% @ 13.91 - with an intraday peak of 14.14. Further upside in the VIX appears likely, to somewhere in the 14.75/15.50 zone.  




With the break under the recent sp'1753 low, the VIX managed to finally break into the 14s...although just failed to close in them.

Near term..if sp'1730s..that probably equates to VIX upper 14s/low 15s. The 16s..look out of range.

more later..on those somewhat bearish indexes

Closing Brief

The main indexes closed significantly lower, after opening moderately higher. The sp -23pts @ 1747, with the two leaders - Trans/R2K, sliding a very significant -1.4% and -1.8% respectively. Immediate outlook is for further weakness, down to the gap zone of sp'1735/30.



The first decent down day in over a month. Congrats to those short...who had a stop @ 1775..or higher.

Certainly, a day for the bears - not least after the opening gains, but really,  nothing has changed.

QE continues..the bigger weekly/monthly charts are still powerfully bullish. World index charts all suggest a further 10/15% upside for the US indexes by late spring 2014.

Baring a break under the 50 day MA - sp'1707..and then 1700..I can't take the declines as anything other than a minor retracement.

Don't get lost in the bearish hysteria this evening!

more later...on the VIX

3pm update - bears briefly in control

Equity bears have managed to take out the key sp'1753 low..and that opens up another 1 to 1.5% lower. A break under sp'1700 still seems extremely unlikely in the remainder of the year. More than anything..bears need to be mindful not to get the hysteria (much like the Twitter buyers).


R2K, daily


Well, it is good to see some significant red in these QE filled indexes.

It would appear highly likely the market will see follow through early tomorrow, but there is VERY high risk we'll floor in the 1735/30 zone..before the next multi-week surge in end Nov/early Dec.

..should be an interesting closing  hour....

3.15pm... market is a bit choppy..but there is underlying weakness (at least in the very immediate term)..and I'd guess we close in the 1747/43 zone. That will easily open up 1730s at the Friday open.

VIX wants to close in the 14s..with 15/16s ..max tomorrow.

3.32pm... sp' doubt now.   we close weak..and surely open tomorrow...weak.

The only where does it floor?

No doubt some bears will be posting collapse wave targets tonight..I think they are simply again getting lost in the hysteria.

Primary trend remains UP.  More on that later.

3.36pm...and there are the VIX 14s.    

3.48pm.. well, we're in my target zone.. it should set up tomorrow very well.

2pm update - headed for the 1730s

The main indexes are increasingly weak - despite the twitter hysteria that continues this afternoon. The sp' looks set to take out the recent 1753 low, and that will open the door to the sp' 1735/30 zone...which is viable tomorrow. Metals and Oil are both weak, with the VIX now +7%.




Certainly, things will be interesting if we can drop to the 1730s early tomorrow..before the buyers likely flood right back in. Keep in mind, tomorrow is HEAVY any initial gap lower will likely be full reversed by the close.

*the weekly charts are provisionally warning of trouble..but nothing major yet


A blue candle...but even 1730s will probably not turn it red. I can't take any declines seriously..unless <1700.

2.04pm..and there goes the recent 1753 ..lets see the bears whack the market into the close..and gap lower tomorrow.

I suppose a challenge of the 50 day MA is viable..but that will be 1710 early next week.

2.37pm ..this is getting a little fast and dirty... sp'1749...and headed for the 1730s early tomorrow. I'd have to guess the market will now sell lower, regardless of the monthly jobs number.

2.46pm.. Trans/R2K continue to lead the way lower... R2K should hold around 1065/60 tomorrow, that'd equate to sp'1730s.

1pm update - afternoon weakness

The main indexes look weak, and with no sig' QE today, the bears actually have a window of opportunity into early Friday. Equity bears need to take out the recent low of sp'1753, that is certainly possible in the remaining 3 hrs. Metals and Oil are weak, with added downside pressure via a strong USD.



Well, 3hrs to go, lets see if the bears can actually muster a strong daily reversal candle from 1774 to the low 1750s.

meanwhile..TSLA holders...remain on track for 110/100.

The issue will be.. can it hold the 200 day MA. Considering the main market..into spring 2014..I'd say yes.

12pm update - hysteria amongst general weakness

Whilst Twitter battles to hold the mid $40s, the main equity market is weak, with the Trans/R2k, lower by a rather significant 1%. Metals and Oil are both weak, with the stronger USD no doubt being an added pressure.



An interesting morning. Sp' hourly chart tells the story. An attempt to break new highs...failed..and we're taken out soft rising support.

There remains 'reasonable' opportunity of a move down to the gap zone in the sp'1735/30 zone.

TWTR, daily

The $50 psy level will be damn tough to break. Similarly, there seems significant support at the opening level in the 44/46 zone.

If we trade <40 this afternoon, the closing hour could be VERY entertaining.

VIX update from Mr T.

time for tea :)

11am update - #over-valued hysteria stock

Twitter opens in the $45s, when a few weeks ago..the mainstream considered $20 a bold target. It remains a market of delusion..of insane valuations. Meanwhile, the main indexes are a touch weak, lead lower by the Trans/R2K, lower by around 1%.



Hourly index charts might have floored...difficult to tell.

The trans/R2K are still suggesting sp'1730s are viable within 'a few days'..but underlying pressure remains so bullish, I simply think the short side is effectively pointlessly untradeable.

TWTR...making a run for the big $50

It is indeed utter hysteria though. No profits...mere 'hope'.

*I kinda like the charts with only one candle. Makes technical analysis easier.

11.08am... heavy selling comes in to TWTR at the  big $50 psy level.

44million traded, on a float of just 17 million (I think). crazy

11.23am... black-fail candle on TWTR just earlier...$44s. If we see sub 40s by 2pm...the closing hour could be hilarious.

10am update - Dow making a break for the 15800s

The Dow is making a break for the 15800s, which is enough (in my view) to confirm 16k 'soon'..and 17k by late spring 2014. Metals are seemingly weaker after good US GDP data, with Gold -$12. Oil is weak, -0.6%.



*Twitter looks set to open in the 40s...

Lets see if it ends up with a giant black candle by the close.

TSLA holders still under massive pressure.

Target remains a very clear 110/100.

10.18am..well, we're seeing a touch of weakness, but really, its nothing significant. Underlying pressure remains to the upside.

Weekly charts are especially powerful.

Awaiting TWTR to the 40s.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open at a new historic high of 1777 (lucky sevens huh?). The ECB has cut interest rates from 0.5 to 0.25%..surprising many. Metals are around 0.5% higher.



*GDP, Q3: 2.8%, much better than expected

Well, today is Twitter get that nonsense out of the way, then its a clear run until Christmas and new year ;)

early mover: TSLA, -$5 @ $ expected. A fair way to go..until the 110/100 zone.

WFM, -$6 @ $58.  Over-rated whole foods nonsense...getting the smackdown on earnings.

Video update from Mr C.

Not surprisingly... he remains firmly on the bull train.

Dow 15800s

Some weeks ago (maybe it was a few months)..I noted how 15800 was a clear threshold which for me would clarify the hyper-bullish scenario into spring 2014.

Well, right now..futures are suggesting Dow will open in the have to think indeed it.

16k...this year...and 17k by end of next spring.

8.36pm... no idea why, but metals are getting smashed lower... Gold swinging from +$5 to -$20 in a matter of minutes. 

Dow is just playing catchup

For around six months the Dow has lagged all other indexes..not least the two leaders - Trans/R2K. It would seem the Dow is now on a charge catchup with the rest of the market. Dow 16k looks likely within a few weeks, with 17000s in spring 2014.

Dow, monthly2, rainbow

Dow, daily


So..the Dow was the big leader today, and a fair few - not least those on clown finance TV, were bemused at the discrepancies between the various indexes. Yet..really, it is arguably just a case of one index playing catchup to the others. It certainly happens from time to time.

Bullish into late 2015/16

Earlier this spring, Trans'7000s looked an insanely bullish call (lead by Carboni). we are, already hitting the 7100s, with 7200/7300s likely within this month..or next. The following is just one of many counts that could be applied..if you assume 'broad upside for another two years or so'.

Trans, monthly'3, rainbow

Regardless of how you want to count it, current trend is clearly higher, but of some point we're going to see a multi-month down wave. I'm guessing that will begin late spring 2014. The only issue is where do we floor. 5500/5000 seems viable...if briefly.

The really big question high will this nonsense peak on a multi-year basis? 9k looks very reasonable, but perhaps the grand top will be around 10k?

Looking ahead

For the mainstream cheer leaders on clown finance TV, it will be the biggest day of the year...the Twitter IPO. No doubt that will be get blanket coverage tomorrow morning, and probably much of the day. The only issue is does the stock open sharply higher...and collapse...or..will there be enough bull maniacs to push the stock higher across the day. Considering the main market...I'll guess the latter.

Besides Twitter, there are the usual weekly jobs, another reading for Q3 GDP - market is seeking a revision down to 2.0%. No doubt, any reading of 2.1% or better, and Mr Market will find an excuse to rally on 'economic recovery'. There is also consumer credit data in the late afternoon.

As ever..beware of a few Fed people on the loose, whose comments might cause some market swings. In particular..Dudley...tomorrow afternoon.

*next sig' QE is on Friday.

A pretty tiresome day...and I shall bid you a...

Goodnight from London

Daily Index Cycle update

The main indexes closed very mixed, with the Dow +128pts @ 15746, whilst the two leaders - Trans/R2k, both closed weak, -0.7% and -0.45% respectively. Near term outlook is for more minor price chop/consolidation, before the next move higher, into the sp'1800s.





It was a bit of a mess today in market land. Many - not least the cheer leaders on clown finance TV, were bemused to see the Dow +100pts, whilst the Nasdaq was red.

However, the Dow has been lagging for many months, and this is arguably just a case of 'playing catchup', which could itself last for some weeks..even a few months.

There is simply nothing significantly bearish due in the near term.

A little more later...