Volatility knocked lower into the close

With equities holding onto moderate gains, the VIX saw a micro cliff fall into the close, settling -2.2% @ 13.49  Near term outlook is for the VIX to remain in the 15-11 zone until year end. VIX remains unlikely to break into the 20s until at least late January.


VIX'60min

VIX'daily3

Summary

*a 5min chart to illustrate what more often happens on a Friday late afternoon!

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There is little to add. VIX looks set to remain low for the rest of this year. There is a reasonable chance of a brief spike higher in late Jan/early Feb. Even then, I don't particularly see much point in going long volatility.

For me, the only issue is whether the next intermediate equity top..eventually results in the VIX spiking to the 30s....or 40s. That is a good 6-9 months away though.

more later...on the indexes

Closing Brief

The main indexes closed moderately higher, with the sp +3pts @ 1808. The two leaders - Trans/R2K, settled +0.3% and -0.2% respectively. Near term trend remains bullish, with the bigger weekly/monthly cycles offering the sp'1840s before year end.


sp'60min

Summary

*price action on the hourly is offering a small bull flag (not labelled).

Any break >1814..and the ABC scenario will get trashed, and I'd have to guess, that will be the case.
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A relatively quiet start to the week, and there really isn't much reason why the rest of the week will be any different.

The broad underlying upside pressure continues.
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more later...on the VIX.

3pm update - gains into the close

The smaller 5/15 min' index cycles look somewhat primed for further gains into the close, although a break >sp'1814 will be somewhat tough. Yet..there seems no power on the downside, so..equity bulls should be fine across this week. Weekly/monthly charts both offer the sp'1840s in the immediate term.


sp'60min

Summary

Baring a random news story spooking the market, we're surely going to melt higher into the close..and broadly..across the rest of the week.
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TWTR just keeps on gaining...

Momo stock nonsense!

2pm update - the rage in all the bears

The main indexes are poised to break new highs, helped along with another truck load ($3-4bn) of benny bux. Metals are holding slight gains, Gold $6, but remain within very bearish broader down trends. Tech remains strong, with AAPL +$9 @ 569, year end target remains 580/600.


sp'60min

Summary

No doubt many of the bears are getting real annoyed as the afternoon proceeds. Some will still be clinging to hopes of a C wave, but really, it sure doesn't look likely.


Meanwhile...one of my current longs..RIG

RIG has had a tough time putting in a floor, but we have a possible spike-low being formed..much like Nov'1. The next 3-7 trading days will be important for RIG, I want to see at least 52/53 before considering an initial exit, and even then, I'm still seeking much higher levels by end spring.

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Another version of something I like..with a rather apt title.



stay tuned...
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2.28pm... micro down wave..1807. Baring a move <1800..this is all minor noise though. Meanwhile, the hourly MACD cycle is at least 40% reset..in prep. for the next up wave.

I just can't see how we are going to fall across the next few days..where is no real econ-news due until early Thursday..at which point where is another large QE.

TWTR still gaining.. +9.7%  ..the lunacy.

1pm update - time for some more QE

The main indexes are holding together ahead of what will be some heavy QE-pomo this afternoon. Equity bulls should be making another push to break a new high in the sp'1814s. Metals are holding moderate gains.


sp'60min

Summary

*hourly/daily charts both offering 1816/18 by end of today.
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There are a number of Fed officials speaking across the afternoon, so...Mr Market could get pushed around a bit..but with underlying upside via QE.
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Well, lets see how we proceed across the afternoon. All things considered, I think we break new highs. Underlying upside momentum remains strong.

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Clown finance TV..highlighted...

SYY, daily

Sysco (SYY) agree to buy US Foods, and as one of the Najerians noted last week, there was heavy call buying recently...someone knew about the deal last week. There were $47s in pre-market, and the giant black candle is a classic example of a opening failed jump higher.

Arguably, anyone long - not least via option calls, should have bailed at the open.
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1.31pm.. sp'1810..breaking a new high..very viable into the close.

TWTR still gaining, now +8.3%  

12pm update - tech is leading the way

Whilst the main market remains somewhat choppy, there is notable strength in the tech sector, with the Nasdaq breaking a new high, no doubt helped by a rising AAPL. Metals remain moderately strong, with Gold +$5. Notable strength in TWTR, +7.2%


Nasdaq daily

AAPL, daily

Summary

An interesting..if quiet start to the week. Certainly, bears just don't look like they have any downside power..but then..that has been the case for the entire year.

*there is a secondary heavy QE due this afternoon, $3-4bn, bears..beware.

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VIX update from Mr T.



Indeed, it remains the case..no one is buying near term VIX..no point, ahead of Christmas. Big players are looking for protection across the next debt ceiling/budget zone of late Jan/Feb.

time for tea :)

11am update - morning chop

The opening equity gains are a little shaky, and no doubt some will be shorting, with stops in the 1813/15 zone. Metals are building gains, with a clear breakout to the upside, Gold +$9. With heavy QE later today, bears face major threat of latter day ramp to new highs.


sp'60min

SLV' daily'2

Summary

Very tricky day to call, and there remains threat of a C wave lower...although I just can't think of any real reason why we'll sell 2% or so lower.

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Longer the bulls can hold the sp'1800s..the harder it will be for the bears. 

Notable strength in TWTR, AAPL, and UAL
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11.29am.. Its not looking good for the bears...if I see 1812s.. a mere 1.5pts from the high, then I think its already towel throwing time.

For many out there, I realise that is not what you want to hear.

TWTR gaining...+7.3%...actually looking to make a break into the $50s... crazy.

10am update - new highs... probably

The main indexes open higher, but with a little uncertain chop. Metals are trying to build gains, Gold +$8, with Silver +1.5%. Equity bears face a multitude of problems, not least of which is a secondary heavy QE this afternoon.


sp'60min

Summary

*I will remove the ABC count on any break >1814.
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It is difficult to call, but on balance, I think we generally proceed higher.
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The bigger weekly charts...

Best guess..we are in micro'5 of BLUE 3..of bigger Black 3 (if that makes sense!)

sp'weekly8

Upper bol' now in the 1840s. Bulls have a clear 30pts viable upside this week..and keep in mind the monthly charts also offer the 1840s.
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To those seeking a C wave lower this week...its not looking good..is it?
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Metals update...

SLV, daily2

We have a clear break - at least in the near term on Silver...bulls need to break into the 20s..and hold there..otherwise, its just a minor bounce.. Downside target remains 17.
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Notable mover: TWTR, +5% in the $47s. What maniac is chasing that higher this morning?


10.08am.. sp'1811...just 2pts to go. Underlying momentum is very strongly to the upside. Its going to be next to impossible for a C wave.

Just where is the downside going to come from? I don't see anything in the immediate term to push this market even moderately lower.


10.35am.. a small reversal, but bears should be desperate for sub 1800..fast.

With major QE later today...a daily close <1800 is going to be damn difficult.

Pre-Market Brief

Good morning. Futures are slightly higher, sp +3pts, we're set to open at 1808 - a mere 5pts from breaking a new high. Metals are still battling to bounce, Gold +$3, Silver +0.75%. Equity bears face heavy QE today, and will likely struggle to hold the market flat.


sp'60min

Summary

Certainly, the ramp on Friday could just be a wave B' bounce..as part of a bigger ABC.

However, the QE continues. The mainstream remain wrapped in the delusion that 'everything is going to be fine', and besides..the primary trend is to the upside anyway.

On balance, we'll probably battle higher this week..to new highs. With little news due this week, and two heavy days of QE..bears face a real tough challenge.

I just don't think the bears can do it. End week target is somewhere in the 1825/35 zone.
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Video update from Mr C.


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Good luck everyone..for the week ahead.