Thursday 12 December 2013

Volatility maxed out in the low 16s?

With equities having likely put in a floor at sp'1772, it would seem the VIX has similarly maxed out in the low 16s, settling +0.8% @ 15.54. VIX looks set to decline back into the 14/12 zone, although there remains some moderate uncertainty with the FOMC next Wednesday.




So long as equities don't break today's low of sp'1772, VIX has surely maxed out in the 16s.

Once the FOMC is out of the way next week..with (I strongly believe) a no-taper decision, VIX should melt lower for the remainder of the year.

more later..on the indexes

Closing Brief

The main indexes saw a moderate latter day recovery, with the sp -6pts @ 1775. The two leaders - Trans/R2K, closed flat and +0.2% respectively. If the recent drop was a C wave of sub'4, then broad upside for some days now seems likely.



*a weak closing hour, but the morning low held.

A very interesting day to watch..and be part of.

My downside target zone of 1774/72...was hit...with 1772 probably be a C -wave floor.

The action in the VIX, with a brief break into the low 16s, arguably confirms the equity floor.

*to those bears who bailed at any point this morning, or even in the closing hour.....superb.

more later..on the VIX.

3pm update - battling upward into the close

It could easily be a bit of a choppy and mixed mess into the close. The bulls will be battling for the upper 1780s..whilst bears should be desperate to claw back under 1780. All things considered, it looks like we have a floor of sp'1772... a C- wave floor.




*clear break of trend on the VIX

I'm somewhat drained by the last two days..if I drop know why.

Suffice to say...things...look....on track.   Updates into the best I can

3.16pm..for those closely watching, looks like market is testing the A wave low of 1779 !

Equity bulls should gun for a close in the 1785/87 zone, that opens up the 1800s tomorrow.

3.24pm.. did we close yet? I'm tired.  

Notable strength: FB +5% in the 52s,  TSLA, TWTR,  all the momo stocks are starting to surge.

3.33pm.. look at those momo stocks fly, lol  TWTR +7% in the 55s. At this rate it'll be 60s by the FOMC !

3.43pm.. a touch of weakness, but we're a good 6pts above the earlier low, and the VIX looks set to close..RED.   Bears...beware!

3.50pm.. Bears getting a bonus chance to exit in the 1770s.

5min micro cycle close to flooring. There can be no excuse for any whining tomorrow!

2pm update - Bulls making a play to ramp

Equities are trying to confirm an initial floor of sp'1772. The VIX is forming a possible spiky-top, and we have a very interesting two hours ahead of us. Metals remain very weak, with the June lows set to be taken out within the next month or two.




Things look broadly on track.

Hourly cycles are arguably complete, with a C wave floor of sp'1772 - the lower end of my 3pt range.

I realise many of you out there are seeking much lower levels, but I can only suggest you go stare at any monthly index chart for the next hour.

2.13pm.. VIX set to flip red.  Equity bears in real trouble now!

2.30pm.. VIX marginally red.. and sp'1781... bulls need to clear the hourly 10MA..of 1781...looks likely

Regardless of the tick by tick noise...we have a floor at 1772.

1pm update - still battling away

Another minor wave lower to sp'1772, with VIX breaking into the low 16s. Mr Market is surely just continuing to build a floor, although as clear turn. Metals remain deeply weak, Gold -$23, Silver -3.8% - both look set for much lower levels into year end..along with the miners.



I still think many are losing perspective.

A move from 1772.. 40pts.. that is just over 2%. Does that merit even mild hysteria?

The original target zone was 1774/72...I'm certainly curious as to if that holds this afternoon!

Notable strength: FB, NFLX, TSLA.    Indeed, the momo stocks have done very well in the last few days.

1.27pm. Equity bulls need VIX <15.50 to confirm a viable C wave floor.

Indeed, bears should be mindful that of a VIX that is now probably maxed out. 

12pm update - battling it out for a floor

The main indexes are moderately lower - although tech is green. VIX has already turned briefly red this morning. On any basis, we are likely just building a floor, before the next main up wave begins. Metals remain very weak, Gold -$24, with the miners similarly weak.



Without getting lost in the minor noise, we have surely seen most..if not all of what might be deemed a C wave.

Market is still weak - not least with some touting much lower levels into the FOMC of Dec'18.

Best guess remains..a floor is in, and we're now headed broadly higher.

Notable strength: FB +4%, TSLA, +2%.

VIX update from Mr T.

time for lunch

12.28pm...another wave lower..and we're now right in the 1774/72 target zone. A break <1770..still seems unlikely.

I realise many will now be screaming for a hit on the 50 day MA..1759.

11am update - C wave complete

The indexes slip a little lower in early morning, but we have most probably seen the market complete a C wave lower, flooring at sp'1775. Metals remain exceptionally weak, Gold -$23, Silver -3.7%. The rest of today will be interesting to see what the bull maniacs can manage.




*VIX is offering a marginally higher high, but...considering everything else, a red VIX close looks very likely.

Best guess... we have floored, and will now see broad upside into next week.

Yes, there is the uncertainty of the FOMC, but with no taper, market should ramp into year end, with a primary target zone of 1830/50.

11.25am. VIX turns red. A break <15.00, and that should confirm the overall outlook.

10am update - close to flooring

Near term momentum remains pretty strong to the downside, and we have just broken into the 1770s. Equity bears face a market with sig' QE-pomo today. Metals are sharply lower, Gold -$26, Silver -4% - below failed old support. Notable strength in FB, +4%


GLD, daily


*more than anything, the metals - and miners, look weak into year end. With a classic 'stuck below old broken support' scenario, it is no surprise to see them lower again this morning.

As for the main market...a bit of a messy start,

For those short...I can only hope most are using good trading case the market rips higher.


Target zone remains 1774/72.. by 11am.

Only a maniac bear would not have a trading stop at 1780 right now. Major threat of a jump into the 1790s later today.

There is NO Excuse..bears have had their C wave with a marginally lower low <1779.

Sure, we might drop a little more by 11am, but its marginal..the bulk of the likely done.

but hey..that is what trading stops are for..yes?

10.10am.. the bearish hysteria out there is laughable.

A break into the 1770s..and now many are screaming for the 1750/40s..if not much lower by January. Most have no perspective...if not just a case of denial. QE money should be kicking across the late morning...and the sp'1790s will be viable later today.

10.17am.. almost there...1776.. 2pts to hit the target zone.

10.22am.. all micro cycles..close to flooring...and we're approaching the typical turn near 11am.

Bears are having their chance to exit this morning.

I can only guess at how many might be whining into the weekend, holding out for much lower levels.

10.27am  Arguably safe to call a floor at 1775.. 0.5pts shy of my target 74/72 zone.

Lets see what the bull maniacs can manage into the early afternoon.

10.36am.. we have a spike-floor on the 15min cycle...bears look...done..  C wave complete.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1784. Equity bulls still look set to break into the 1770s later this morning, before forming a C -wave floor at some point today. Metals are sharply lower, Gold -$16, with Silver -2.9%.



So..we're set to open a little higher, but really, it'd be surprising if we don't see the market fall at least a little more this morning.

Near term pressure is most certainly to the downside.

*notable early strength in FB, +4% at $51.35, on news it will join the sp'500.

Econ-data...from Santelli.

stay tuned :)

9.23am.. sp-2pts... 1780.....the 1770s are very viable in the opening 90mins.  A typical intraday floor is see where we are around 10.45/11.15am.

9.39am.. minor chop...I'd be real surprised if we don't break into those 1770s today.

Metals VERY weak, Gold -$21, and could drop another $80 in coming days.

9.49am.. a snap lower...this could be the VERY final part of this C wave

We have a lower low - from 1779....

Bears...should be tightening those short-stops !

Keeping today in perspective

A rare significant down day for the US equity market, but it remains vital to keep everything in perspective. The broader weekly/monthly trends remain to the upside. Seasonal factors are also likely to come into play in the remainder of this month, and into early 2014.


Dow'monthly'2, rainbow


So...the main indexes actually managed a daily decline of more than 1% ! Even yours truly had given up on a C- wave yesterday. does look like we have a sub'4 ..ABC wave. - much like late Oct/early November....

sp'60min'5 - broader overview

In the previous ABC wave, the C wave was 6pts lower than the A wave floor. It is arguably fair to just take off 6pts from the recent 1779 low..and that gives a target zone of 1774/72 for Thursday morning. As ever...we shall see!

Looking ahead

There is the usual weekly jobs data, along with retail sales.

*There is sig' QE-pomo of $3-4bn.

Perspective is everything

For much of this year, one of the bigger issues that I've come to truly appreciate is not to get lost in the smaller waves. Today was itself a good example. Once the bull flag - along with support, had clearly failed <1800, the bulls were done for. There were a few hours of chop in the early afternoon, but the closing hour indeed turned out to be especially weak.

Despite today's rather interesting action, the bigger trends remain strongly bullish. I realise many are now looking for the FOMC to cut QE next week, but even regardless of that, the hugely important monthly trends are strongly bullish.

Just look at the Dow monthly. Bulls could sustain downside to the 10MA - 15200s, 600pts lower, and that would do absolutely nothing to damage the primary up trend.

For those holding short overnight...dwell on that Dow chart, and consider an exit on any opening Thursday gap lower into the low sp'1770s.

Goodnight from London

Daily Index Cycle update

The main indexes closed lower, with the sp -20pts @ 1782. The two leaders - Trans/R2K, both closed -1.6%. There looks to be very likely follow through to the downside early Thursday, before the market puts in a C wave floor. End year upside remains the sp'1830/50 zone.





Today saw the first decent downside in some weeks..if not months - if you look at the hour to hour price action.

Best guess..downside early Thursday to sp'1774/72, by 11am, forming a C wave floor.

*there is sig' QE-pomo tomorrow, so equity bears will need to be...careful.

a little more later...