Volatility falls into the close

With the main indexes swinging from sp'1760 to rallying to a new high of 1782, the VIX fell into the close, settling -2.5% @ 12.50. Near term outlook remains for the VIX to remain in the 14-11 zone, with the 20s unlikely until Jan/Feb 2014.


VIX'60min

VIX'daily3

Summary

There is little to add, whilst the VIX remains trundling around in a very tight range.

The opening black-fail candle was a clear warning to the equity bears that the opening declines were not likely to last...and indeed...that was the case.

*as the lunch time 'optionmonster' VIX video noted, there is no real buying interest in VIX, except for Feb'2014..when the debt ceiling issue will again appear.
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more later..on the indexes

Closing Brief

Equities saw a typical latter day recovery, with the sp' swinging from the early low of 1760, to close +14pts @ 1782. The two leaders - Trans/R2K, closed +0.6% and 1.0% respectively. Near term outlook is highly suggestive of a straight run into the low sp'1800s.


sp'60min

Summary

Farewell to the hope of 1730s..and the 1600s are fading far below.
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For the equity bears, this remains a market to LEAVE ALONE. There is simply no point in getting involved on the short side. This mornings minor moderate decline of 0.5%..lasted for less than an hour..and then we saw a typical latter day recovery.

The fact we closed at a new historic high..along with the Dow 15800s, is mere added spite to the bears.
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Frankly, the notion of a 'significant' wave lower sometime in the remainder of this year is stupid. We ain't going <1700 for some months.

*I remain largely content on the sidelines, and have zero intention to be shorting the indexes until the spring.
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Updated hourly chart...

*I wanted to be clearer on what micro-count I am currently considering. Certainly..we ain't headed down..and the recent action does indeed look like a simple ABC.

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more later...on the VIX

3pm update - a new daily closing high?

US equities have seen yet another instance (the 500th since 2009?) latter day recovery. The opening decline to sp'1760 is now almost 1% lower. Underlying pressure remains strongly to the upside, and it now looks like we'll have a straight run into the low 1800s by early December.


sp'daily5

Summary

Hope of the 1730s can be thrown out, and anyone still touting <1700s in the near term should just...quit it!

Tomorrow will likely be even more problematic for the bears, as there is sig' QE. So, lets see if the bulls can manage a new daily closing high of 1776 or more.
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Notable strength in: FB, TSLA, and even the TWTR nonsense.

FB needs to clear back into the 50s to really confirm this was a large bull flag. If yes..then target 57/62 by year end.
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3.33pm...well, we're holding 1775..not that it matters. Bears haven't a hope of 1730s now...nor even 1760.

tomorrow..will be all about the Yellen monster. Great huh?


3.45pm.. Dow 15800s.  A target I've been talking about for some months.

This opens up 16k..by year end (if not days)..and then 17k by late spring 2014..before an intermediate top. More on that later.

2pm update - new highs

The sp' breaks the recent 1775 high..and that should clarify that the 1730s are now out, and that 1760 is the new floor. A clear run to the low 1800s now looks viable. For the bears..this remains an arguably untradeable market...for another 4-6 months.


sp'60min

Summary

Well.. that as they say..is that.


sp'weekly8

Perhaps maxing out early Dec...then end year profit taking? Even then, seems little point in getting involved on the short-side
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Notable mover: UAL, having trouble, the higher Oil price today is not helping.

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1pm update - so much for the downside

The main indexes are now back to green...and the earlier low of sp'1760 is fading away far below. The bears face a market with huge underlying upside pressure. Even moderate declines of 0.5% are continually being bought.


sp'60min

Summary

Tomorrow will likely be a bigger problem for the bears, with sig' QE. If the daily momentum starts to tick higher...a weekly close in the 1780s is now viable.

Frankly..it remains an untradeable market for the bears, and is...Best. Left. Alone.
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Notable strength in DRYS, FB, RIG, TSLA.


sp'daily5

A real mess for the bears if we close >1775 today. Hell, even the 1790s would be viable by the Friday close.


1.35pm.. sp' making a play to break new highs >1775.

If so..that will surely rule out the 1730s (if only!)...and instead.. a straight run to the 1800s.

12pm update - market back to drift mode

The main indexes are mostly a touch lower, but broadly speaking, we're now in the fourth week of trading between sp'1730-1775. Metals are mixed, Gold +$5, whilst Silver -0.5%. Oil is building gains of 1.2%. Near term outlook for the market remains...a bit of a mess.


sp'60min

Summary

Again, it seems the bulls are entirely unwilling to buy >sp'1775, but neither do the bears have any power on the downside.

The longer we just churn sideways, the easier it will be for the bulls to ramp into early December.

So..small chance of minor down wave (untradeable in my view)...before a push into the sp'1800s.
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VIX update from Mr T.



time for lunch :)
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12.36pm.. no doubt some short-stops are getting hit..and market is spiking  higher to 1770.

For the bears, it is simply another day of frustration, and the opening low of 1760 now looks a fair way lower..and not likely to be broken back under. 

11am update - no downside power, urghh

The main indexes are battling back, with the bears only able to manage brief declines of 0.5%. The two leaders - Trans/R2K, are already slightly green, and even without the QE, the bears are really looking weak again. Truly.. frustrating for those meddling in this.


sp'60min

Trans

Summary

Not much to say

This morning is exactly the reason why I will simply not get involved in trying to short this nonsense. Complete..waste of time, never mind the $.
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The Yellen monster will be the focus of attention tomorrow. Effectively, her job interview on live TV.

10am update - opening weakness

The main indexes are moderately lower, with the sp' set to break into the 1750s this morning. Bears will no doubt struggle, but there seems 'reasonable' chance with not much QE this week. Metals are seeing a dead count bounce, with Gold +$6. Oil is similarly higher, +0.6%


sp'60min

sp'daily5

Summary

I think the hourly/daily charts are both pretty much offering the 1730s in the near term. Certainly, it will likely take another few days to get there, but all things considered..'probably'.
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Notable early movers..

RIG, a touch higher, despite the weak market.
TWTR, -1%...a break <40 seems likely.

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10.29am.. opening black candle on the VIX hourly..tells the tale...of a fearless market.

Bears really struggling just to keep the market red.  I still think we'll trend 'somewhat lower', but as ever...it really is tough just to see declines of 0.5% for more than an hour, urghh.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -7pts, we're set to open around 1760. Metals are a touch higher, Gold +$7. Equity bears have another chance in the remainder of this week to knock the market to the sp'1735/30 zone, where there are multiple aspects of support.


sp'60min

Summary

So..we're set to open somewhat lower..nothing significant (yet), but there is distinct weakness out there.

Bears should seek a close in the 1755/50 zone, with significant follow through Thur/Friday. There is only one sig QE this week...so the bears do have a window of opportunity.
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Lets see what they can manage by the traditional turn point of 11am.

Reflecting upon moon madness

The US and World equity indexes are still on track to climb higher into spring 2014. What will be particularly interesting is how the market copes in its fifth year of the 'economic recovery' that the mainstream continue to believe is genuine.

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*the following two charts are something I posted 3 weeks ago in a 'moon madness' post. They are to be treated with some serious bearish contempt..but, I hope, will again provoke a few thoughts.


sp'monthly - hyper-bullish'A

sp'monthly - hyper-bullish'B

Summary

Some weeks ago I threw the above two crazy charts onto the web. To my surprise, I actually received a few comments that were similarly open to such extreme upside.

I'm similarly remain open to the notion that maybe we'll put in a key multi-year high early next year, but really, how can that happen whilst the Fed - along with other central banks, look set to keep printing for at least another few years?

I simply find it hard to believe that we won't just keep on battling 'broadly higher'. Certainly, we're due a major down wave of 20%..and I'm guessing we will get one next year. Yet, if we're 1900/2100 next spring...knock off 20%..and that gives us a floor of 1600/1500s.

From there..why not another 50% higher across the following 12-18mths?

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re: scenario'A - sp'2500 looks pretty reasonable by late 2015/early 2016. Such a move wouldn't require an acceleration of the recent multi-year gains.

re: scenario'B - sp'3500/4000. That of course would be the stuff of nightmares...arguably for the bulls too. Trying to find a 'fair' exit if the US markets were to go nuts.

Not possible? Well...how about...

Japan, monthly

Many will have already forgotten the ramp in the Nikkei.. 70% over 7 months. There is little reason - if QE continues in the US into 2015 (which seems VERY likely), that we might not see a similar blow-off top.

There are also the grand issues of world capital money flows, money velocity, and general economic growth (or lack of)..but I won't be going into those right now.

*ohh, and in terms of the Nikkei, I should note equity bulls should continue to seek a monthly close in the 16000s within the next few months. That will open the way to 18k..if not also 20k.
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Looking ahead

There really isn't anything tomorrow of significance. The Bernanke speaks in the evening, but I don't think that will be of any importance.

*next sig' QE-pomo is not until Thursday.
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I remain largely on the sidelines, with no intention to short the indexes (or long VIX) until late spring 2014. There remain some 'interesting' opportunities in the precious metals (short side only). I will certainly consider going long the indexes (or a few select stocks), if we hit the sp'1730s.

Goodnight from London

Daily Index Cycle update

The main indexes closed somewhat weak, with the sp -4pts @ 1767. Near term outlook over the next few days is for minor downside. At best, the bears might be able to manage the sp'1730s, before the next major wave higher into the 1800s.


sp'daily5

R2K

Trans

Summary

*notably, the two market leaders - Trans/R2K, closed +0.7% and unchanged, respectively.
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Generally, it would seem there is an unwillingness - at least in the immediate term, for anyone to buy >sp'1775.

A further little down wave seems likely, and I will again be looking for the sp'1730s as a likely floor. There are a fair few support 'issues' in the 1730s, not least of which will be the important weekly 10MA.
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a little more later...