Thursday 5 December 2013

Volatility climbs a record eighth day

With the main indexes closing weak, the VIX closed higher for the eighth consecutive day, +2.6% @ 15.08. Near term outlook is for a moderately higher VIX, although it is going to be tough for the VIX to hold the 16/17s for very long. VIX 20s still seem unlikely until next Jan.




Today was the eighth consecutive daily gain in the VIX, which I believe is (as far as I know) a new record.
Clearly, the near term trend is for higher volatility, next upside target would be 16/17.

If the market likes the jobs data tomorrow (from a no-taper perspective), then VIX could quickly slip to the 14.00/13.50 zone.

More than anything right now, it would still seem the VIX will not be trading above the key 20 threshold until next January, when the debt ceiling/budgetary issues will once again arise.

more later..on the indexes

Closing Brief

The main indexes closed moderately weak, sp -7pts @ 1785. The two leaders - Trans/R2K, closed flat  and +0.1% respectively. Near term outlook remains moderately weak, but the larger trends remain very much to the upside.



A weak closing hour, and the bulls failed to break the declining trend.

The fifth consecutive daily decline for the sp'500, and this is the most bearish run since late September.

Arguably, most notable of all today, the VIX climbed for the eighth day..a new record (I believe).

more later..on the VIX

3pm update - critical closing hour

This closing hour will likely be the key to determining the next 3-5 trading days. Equity bulls just need to break above the declining channel..with a daily close >1791. Equity bears should merely be content with any close <1790. VIX remains higher...for a record eighth consecutive day.




*VIX chart slightly redrawn to cover the earlier marginal break lower.

The hourly index/VIX charts are really telling the story today.

We have a VIX which is pushing higher for what (I believe) is a record eighth consecutive day. The indexes are merely melting lower.

However, the underlying MACD (blue bar histogram) cycle is already very low, and I've seen this situation hundreds of times before..and it VERY rarely works out well for the bears.

On balance, we are likely to see a snap higher..clearly unlikely today..but more so...tomorrow.

With the big monthly jobs data tomorrow, anyone holding long or short overnight, is going to be susceptible to a rather significant opening gap higher...or lower.

I'm still guessing up

3.18pm... 42mins to go..bulls need 7pts to break the down trend. Its viable...and we're seen it happen a few hundred times over the past few years.

3.30pm.. sp'1786..bulls just need 5pts to break that trend!

3.33pm.. a classic nano double spike top..on the earlier Silver bounce...back to the opening gap.

SLV, 5min

Broad target remains 17.00

3.40pm.. 4pts to trying to make a break for it...

3.47pm.. micro snap lower...bulls fail again. A close at low of the day would understandably excite some out there..and open up the 1770/65 zone by the Friday close.

3.53pm... the bears are going to hold the ball..for day'5.

VIX will get the 8'th daily gain..probably a new record.   

2pm update - battling it out

The indexes remain stuck in minor chop, with the sp -6pts (0.35%). The ongoing declines are still not anything for the bears to get excited about, not least being a mere 25pts (1.4%) from the recent high. Metals remain weak, Gold -$10, whilst the VIX is holding gains of 3% in the low 15s.



Well, its turning out to be something of a tedious day.

Certainly, bears remain in control of the immediate trend, but the declines we're seeing are only moderate.

Things only get a little interesting with a break <1779, which opens up a test of the 1777/70 zone.

I still don't expect that to be broken.

Notable strength in TWTR

The big $50 before year end? Just who wants to buy that right now? Even the FB is infinitely more appealing.

2.07pm.. bulls just need to close > break the near term down trend. It really isn't asking still have real problems on any minor move higher.

2.29pm.. For those on the short side right now...a break <1779...opens up a Friday close in the 1770/65 zone.. That is best case.

Worse case...we close today above down channel.. >1791..and that opens up 1805/10 tomorrow.

Frankly..this is VERY marginal..and hard to call.

If I had to guess..I'm still saying...UP - as based on hourly charts, and recent price action.

1pm update - market primed to snap higher

All else being unchanged..the market is set to push higher this afternoon. Underlying pressure on the hourly cycle is set to go positive before the close. VIX looks set to turn red. Metals remain weak. Gold -$11. Oil is holding gains of 0.6%.




Equity bears should now be concerned, we already have a marginal break of the upward trend on the VIX hourly cycle.

If equities climb from here..VIX downside is to 14.00/13.50 by the Friday close.

*keep in mind, Fed official Fisher is on the loose this hour..his comments could be taken by the mainstream as no-taper/bullish..and be the kick the market needs to break back into the sp'1800s.

12pm update - bears in trouble

The hourly cycle continues to warn of upside into the late afternoon. Any break under VIX 14.70 should confirm an equity upside least to sp'1805/10 by late Friday. Metals remain weak, but are recovering, Gold -$10, Silver back to flat.




Rest of the day should be interesting.

All things considered, this smells of cooked bear to me.

*Fed official Fisher is on the loose this afternoon, no doubt the market might use his comments (anti-taper?), to ramp the market into the close.

VIX update from Mr T.

time for tea :)

11am update - still... set to rally

The market remains moderately weak..for the fifth consecutive day. Metals are still sliding, with Gold -$23, Silver -2%. Underlying hourly cycles still highly suggestive of broad upside into the Friday close, and with heavy QE on Friday, bears should be pretty cautious.




*VIX is higher...8'th day in a row..which might be a historic record.

So...I'm still guessing we'll see broader equity strength in the remainder of the week.

What is notable. bears are so far still unable to show any consistent significant downside power, which has been the entire problem for much of the last two years.

11.28am.. watch the VIX. If VIX goes'll break the upward trend of the past 8 days..and market will snap higher.

10am update - set to rally

The main indexes open a touch lower, but the market looks set to rally across the day, with a close in the sp'1800s. Precious metals are reversing much of the Wednesday gains, with Gold -$20. Equity bears face continued problems into year end.


GLD, daily


Well, I think we're headed up..despite the opening weakness.

Hourly MACD cycle looks prone to climbing higher as the day progresses, and that will really put pressure on the bears to cover.

A long day ahead....lets see if the bulls can manage that daily close in the sp'1800s.

10.30am.. market remains a little weak, but the hourly charts continue to warn of potencial upside as the day progresses.

Notable strength in DRYS, +5% in the $3.50s.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1794. Precious metals are sharply lower, Gold -$13, Silver -1.5%. Equity bulls have the hourly cycles on their side, and a daily close in the sp'1800s looks very viable.



*lots of econ-data this morning...should give mr market an excuse to pick a direction..and keep going all day.

So..we're set to open a bit higher, giant gap.

Just look at the MACD (blue bar histogram) on the hourly chart. We could easily battle upward for the entire day, and that will be easily enough to get us into the sp'1800s again.

Equity bears should be VERY concerned that new highs are possible tomorrow, if the market decides it likes the jobs data.

There are a lot of interesting movers in pre-market..

AAPL +$8 @ 573. - now brushing the upper channel on the daily..and a mere $7 from my end  year target zone of 580/600.

FB -1.7% - will be interesting to see if the buyers come in again, and turn it positive.
GDX -1.6% - no doubt pressured by falling metal prices again.
TSLA +1.5%, but really, that could reverse to the downside at any point, regardless of main market

Video update from Mr C.

updates across the day!

8.35am... we're back to the good news is bad news situation.

GDP Q3 ... 3.6%...highest since spring 2012.
Weekly jobless 298k...

Market selling a little lower...along with metals. 

Just another minor down wave

The recent few days of weakness is almost certainly just another little tease to the equity bears. The market has offered sporadic little multi-day drops across this year..and they never last long. There remains opportunity for further upside of 3-4% into end year.

sp'weekly'8 - mid-term outlook


The rising weekly 10MA - currently 1763, is first key support. As we saw some months ago, even if that breaks...the market should be able to quickly whipsaw the market back higher.

Frankly, I see no reason to change the original outlook from early summer. Broad upside into late spring 2014...somewhere into the sp'1950/2050 zone.

Looking ahead

There is the weekly jobless, factor orders, corp' profits, and the third reading for Q3 GDP.  There are also two Fed officials on the loose, notably Fisher in the afternoon, and he might be enough to inspire the bulls if he doesn't mention the T word.

*next sig' QE is on Friday.

I remain content in my latest RIG position, but am keeping a close eye on the precious metals. SLV is already a tempting re-short, but I'm going to give it some more time to get stuck in the 19s. Regardless, in the meantime, I will watch the main equity indexes, but I sure won't trade them!

Goodnight from London

Daily Index Cycle update

The main indexes closed moderately lower, with the sp -2pts @ 1792. The two leaders - Trans/R2K, closed -0.4% and -0.2% respectively. Near term outlook is a little messy, but with broader upside into late Dec/early 2014.





The fourth consecutive daily decline for the sp'500, but really, the recent series of declines are VERY minor. We are a mere 20pts - barely 1.2% from last Friday's historic high.

Rather than see any significant downside, as usual, all the bears can manage are minor declines.

The market looks set for another rally into year end. Monthly charts continue to offer dow 16500 and sp'1840.
a little more later...