Friday, 8 November 2013

Volatility melts into the weekend

With the main indexes building gains across the entire day, market volatility is back on the slide, with the VIX settling -7.3% @ 12.90. Across the week, the VIX declined by -2.9%. The VIX looks set to remain under the key 20 threshold for the remainder of this year.





Even yesterday when the market was sp'-23pts, the VIX could not even manage a daily close in the 14s. With today's full reversal net gain of sp+23pts, the VIX closed the week in the 12s

Even the closing hour saw the usual 'whack the VIX lower into the weekend' behaviour.

On almost any outlook, VIX looks set to remain under the key 20 threshold for the remainder of this year. The first real opportunity of some significant equity downside looks to be late Jan/early Feb'2014 - when we have the debt ceiling issue again.

more later...on the indexes

Closing Brief

The main indexes closed significantly higher - no doubt fuelled by QE, with the sp +23pts @ 1770. The two leaders - Trans/R2K, closed +1.1% and 1.9% respectively. Near term trend remains somewhat messy, but the mid/long term trend remains outright buliish.



Nastiest. Market. Imaginable.
For those who have been holding short from yesterday, this is indeed a terrible way to end the week.

Even the sp'1730s - a level I thought viable, now looks out of range. Indeed, Monday could easily gap straight >1775..and then we're probably looking at 1780/90s..certainly by end Nov.

Dare I say...have a good weekend.

*the weekend post will be on the US monthly indexes

3pm update - QE fuelled closing hour

The pre-market futures of sp -8pts in the upper 1730s now seem a hazy memory. It would seem the bull maniacs are going to close today with the weekly charts remaining outright bullish. Metals have recovered a little, with Gold -$18. VIX looks set to close the week in the 12s.




Even the Dow - lagging for months, is currently showing net weekly gains.

The hysteria that is TWTR...continues to look weak into the close, -5% in the $42s.

updates..into the close....

3.23pm... TWTR in trouble..even of losing the $40s today.

Main market..generally flat lining in the low 1760s...

3.32pm... look for Mr Market to whack the VIX lower in the closing minutes..along with a possible micro-ramp in equities.

TWTR..40.90...certainly within range of losing the 40s by the close. doubt some bears will be throwing bricks at their screens. I can't blame them. We're just 3pts shy of negating ALL of the Thursday drop.

Whilst the headline indexes build gains, the R2K looks stuck..with gains of 1.9%

Only another 4-6 months (I guess) until the current multi-month wave concludes..  Back at the close.

2pm update - white flag waving time

With the indexes continuing to build gains, it would seem the equity bears had one significant down day..and that is it. Truly frustrating, but remains a hyper-ramp of almost 70% across the last two years. Metals remain weak, Gold -$21. VIX..slipping 4.5% in the 13.20s.



Baring a late day would appear the C/3 wave (or whatever you want to call it) indeed done.

Hell, even the 1730s - a level that I thought viable, now seems out of range. I can only imagine the horror those who were touting sub 1700s are now feeling.

Despite the index gains, the hysteria that is TWTR is not looking so great...

Sub'40s would bode for sig' declines across the rest of the month. After all, is anyone going to be placing buy orders >$50 any time soon?


It has been a real mess across the last 3 trading weeks..we really been stuck in a tight range of 2-3% for most indexes 

I still see the whole situation as largely untradeable on the short side. Even if you caught the two recent tops at 1775/74, downside is only 1.5% or so...and that is best case entry/exit.

1pm update - bears on the edge

The main indexes are continuing to build rather significant gains, lead higher by the Trans/R2K, higher by 0.8% and 1.8% respectively. Metals remain weak, Gold -$21, with a VIX that is looking in danger of losing the teens.


R2K, daily


*the ramp in the R2K is particularly disturbing. One down day..and we're almost back to where we started. Equity bulls need to clear the 10MA around 1100 though.

Arguably, sp'1665 is the last line for the equity bears to start waving the white flag.

Same old problem....QE. Urghhhhhh

*I am hearing renewed talk about Fed taper in mid-December, but that makes zero sense. A policy change ahead of the Bernanke leaving..very unlikely. If the Yellen monster is in command, then first taper op'.. next March/April...if ever.

1.30pm.. sp'1764/65...well, we're about white flag waving time for the bears.  Still over two hours left of the day, but really..the move in the R2K is now 2.0%, an incredible rebound.

12pm update - messy Friday

For the equity bears - not least those holding overnight Thursday, this is proving to be a really messy end to the week. The recent 1746 low is 14pts lower down..on the flip side though, this is very likely just a dumb bounce. Metals remain weak, Gold -$22.


GLD, daily


So..14pts off the low..and now stuck.

Baring further upside into the afternoon - which even I find difficult to envision, this is surely just a re-short opportunity..with a tight stop in the low 1760s.

*interesting action in TSLA and TWTR, both look set to close the week on a bad note.

VIX update from Mr T.

*VXX has seen a 1 for 4 REVERSE split...  not '4 for 1' ...although he kinda said it right..sorta. ;0

time for..tea :)

12.23pm.. with today's gains..the weekly charts are back to outright bullish.


*to be clear, I still think 1730s are week..but the broader trend into spring 2014..looks on track - baring any daily closes <1700.

Anyway...I don't intend to short the indexes...too annoying (at least for me)..until next spring.

11am update - QE fuelled bounce

The main indexes have managed to snap higher, but this is very likely just a 'stupid bounce'. Equity bears should be seeking renewed weakness in the latter part of the day. Metals are significantly lower, with Gold -$21, the higher USD, +0.7% is not going to help!




Best guess...remains unchanged..a move to the sp'1735/30 zone.

Arguably..a simple short-index trade..with a stop in the 1760/65 zone...with 25/30pts of downside..into early next week.

if the VIX can turn positive later today...that should clarify of lower levels to come..into next Mon/Tuesday.

Metals are weak.

If GLD fails to hold 122 in the next day or two...big problemo!

11.30am.. market looks seriously stuck at 1760. As noted earlier..for those interested in would be the time..with a stop somewhere in the 1760/65 zone.

Downside target remains 1735/30.

*TSLA and TWTR both look increasingly weak, the latter in danger of losing the 40s.

10am update - downside target remains the 1730s

Early market has already seen some swings, the equity bears should be able to push the market least to the sp'1735/30 zone. Metals are significantly lower..with Silver breaking rising support. USD is strong, +0.6% in the 81.30s.


SLV, daily


A very busy day ahead.... lets see what the bears can manage by late morning.

If the USD can hold the gains, along with rising bond yields, market should remain weak into the Friday close.
- hysteria land...

TWTR, daily

A break <40 would be a real problem for the IPO chasing maniacs.

10.14am..just another lousy day for the TSLA holders...

Target remains 110/100... and I'm starting to see a few people also looking for 100/90.

10.20am.. a typical 'stupid bounce' will fail around 11am..... sp'1756/58

10.35am...sp'1760s..this is no doubt really starting to annoy many out there.

..and ZERO doubt..most of this is due to that bloody QE-pomo nonsense.

*the good thing..there is only 1 sig' QE next who are broadly bearish..have 'fair' chance..early next week.

Metals continuing to slide...Gold -$24..   Silver has clearly broken support.


We're at the level where we had better reverse..or new highs...

I'd still guess this bounce fails into the afternoon.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +3pts, we're set to open around 1750. Metals are a touch higher, Gold +$2. Regardless of the open (post jobs data) equity bears should have a reasonable opportunity of pushing the market lower into the low sp'1730s.



*monthly jobs data:   204k net gains, headline rate: 7.3

Lol, this number is massively higher than just about every every estimate, who have been lowering their estimates relentlessly for the past month.

We probably have a very busy end to the week. Should see some rather dynamic price action today. As ever, with heavy QE, bears face the usual will need to be some serious sell side today, to out weigh the new money.

Notable early movers...
TWTR -1.4% in the low 44s. A break <40 would be pretty interesting.
TSLA -3% @ $135...the down trend...continues.

Have a good day everyone!

8.32am... after the jobs data, metals get the hammer, gold swings from +2 to -13

sp' swings -5....   pretty fun start to the day

8.34am...sp' breaks into the 1730s.

Clown finance TV....

Santelli to Liesman 'you can't survey people who are in a straight jacket'. 

Ahh yes..  a great start to the day.

8.59am.. sp' holding moderate declines , -2pts. 

Certainly though, there is no sign of any ramp to start the day.

I hold to original outlook...a floor in the 1735/30 zone...late today/early Monday.

9.14am...well, to the annoyance of bears..indexes are right back where they started... sp +3pts.

Notable strength in the USD, +0.4% in the 81.20s

Just a minor retracement

Equity bears saw their first decent down day in what seems like forever, yet...a retracement had been expected for well over a week. Baring a few daily closes <sp'1700, the primary trend remains unquestionably to the upside.




So...a down day....and yes..the daily declines were pretty significant, especially for the Nasdaq, Trans, and R2K.

The problem remains though, nothing has changed in the bigger picture. We're still headed broadly upward, the QE continues at $85bn a month, and the sp'1800s look a comfortable target before the year comes to a close.

In terms of the current wave lower...

sp'daily3 - fib levels

My best guess remains a floor in the 1735/30 zone. However, there is a small chance of 1710 - which would be supported on the fib' chart. 1710 is also where the 50 day MA will be lurking next week.

Looking ahead

There is actually quite a bit to conclude the week. First..the monthly jobs data, market is seeking net gains of 120k, with a headline rate of 7.3%. There is also personal income/outlays, and consumer sentiment.

There are also a few fed officials on the loose, not least the Bernanke, who will make an appearance late Friday.

*there is HEAVY QE of around $5bn...bears...beware!

Twitter starts with a black candle

One final chart to conclude today..and I guess it should be the Twitter (TWTR). Whatever you want to call today's daily candle (inverse shooting star?), it is a black candle (closes lower than the open, but still with a net gain), and those usually don't bode well for the near term. Facebook (FB) also began with a black candle, although FB closed flat, rather than TWTRs net gain of 71%

One thing is for sure..a one candle chart makes for much easier technical analysis.

Goodnight from London

Video update from Walker

I think I can say Walker is usually overly that in mind!

Daily Index Cycle update

After opening moderately higher, the main indexes saw increasing weakness across the day, with the sp -23pts @ 1747. The two leaders - Trans/R2K, continue to lead...settling -1.4% and -1.8% respectively. Near term looks weak, with a likely move down to the low sp'1730s.






The first significant down day in around a month.

Certainly, yesterdays declines seen in the Trans/R2K were indeed a clear warning of trouble in the other headline indexes today.

Despite today's declines, the broader trend REMAINS bullish  Unless we put in a few daily closes <sp'1700, I can't take any of this seriously. It is just a retracement - as expected, and the market is just having a minor shake out. Nothing more.

Closing video from Mr R.

a little more later...