Thursday 19 December 2013

Volatility breaks into the 12s

Despite a little rally into the close - where the VIX settled +2.5% @ 14.15, more importantly, the VIX broke a new low of 12.89. The VIX looks set to decline into year end, remaining in the 15/11 zone. VIX 20s appear highly unlikely until at least late January.




I can't take the latter day rally in the VIX seriously. Yesterday was a key turn/break, and the little afternoon bounce into the 14s, is arguably just that...a bounce.

Equities look set for further upside into the Friday close, and if that is the case, the VIX will surely close the week in the low 13s..even the 12s.

more later..on the indexes

Closing Brief

The market saw some minor chop..a day of consolidation, with sp -1pt @ 1809. The two leaders - Trans/R2K, settled unchanged and -0.7% respectively. The near term outlook remains very bullish, with a year end target zone of sp'1830/50.



A pretty understandable day of chop, after what were powerful Wednesday gains.

There really isn't much to add. With heavy QE tomorrow, bears face the usual problems.


bits and pieces across the evening

3pm update - closing hour gains

The smaller 15/60min index cycles look very bullish into Friday, with a weekly close in the sp'1820s. Metals remain very weak, Gold -$23. VIX is flat. There remains simply no reason for equity bears to have any interest in this market for some weeks..if not 4-5 months.



Suffice to looks fine.

Huge underlying upward pressure...and the QE is no doubt helping to negate what little sell side there is.

Notable weakness: TSLA, -5%,

Strength: BTU +3%.

2pm update - bull flag on the hourly charts

Equities are continuing to consolidate the recent gains, but further upside into the Friday close seems likely. Metals are in danger of taking out the June lows before the end of today. VIX has picked up a little, after the earlier slide into the 12s.



We have - to use an oscarism (Oscar Carboni, you know?), an F flag, on most of the hourly index charts. F flags are exceptionally bullish, and are offering a Friday close in the sp'1820s.

With heavy QE this afternoon..and looks set for inevitable upside.

Notable weakness

TLSA, daily

A break <$115 will open up a spring slide to the 70/60 zone, regardless of continued upside in the main market.

1pm update - Dow breaks new historic high

Whilst the broader market is largely consolidating the Wednesday gains, the Dow has already broken a new historic high. Monthly charts are offering the 16300/500 zone by year end. Metals remain weak, Gold -$24, Silver -3.1%..the June lows are not going to hold.

Dow, daily

GLD, weekly


Regardless of the how the afternoon goes, with further QE tomorrow - helping to negate any profit taking, the market looks set for a weekly close in the Dow 16200s, with sp'1820s.

stay tuned!

12pm update - much higher levels coming

The big sp'1800 level now looks to be first support, and a weekly close in the 1820s looks probable. VIX earlier broke into the 12s, and 11s are now viable to end the year. It remains a fearless market..still fuelled by heavy QE, with broad upside into the late spring.



A morning of slight weakness..some chop...a daily marginally positive close looks likely.

VIX is indicative of a market that has seen a clear turn.

Notable weakness in Ford...the low 14s are expected

VIX update from Mr T.

time for tea. :)

11am update - equity market building a bull flag

The market is just churning out a bull flag on the 15/60min index cycles, and with heavy QE today and tomorrow, a weekly close in the sp'1820s looks likely. VIX has already broken into the 12s. Metals remain exceptionally weak, with spot gold prices in the $1100s.


GLD, daily


All the broader trends remain on track..including for the precious metals.

As expected, we're seeing end year weakness in the metals..along with the miners.

notable weakness in Ford, which looks headed for the low 14s - regardless of strength in the main market.

10am update - the morning after

The market opens a touch lower, but really, it is nothing of any significance, and with huge QE-pomo across today, the market will likely close somewhat higher. Metals are set to take out the June lows, with Gold -$18, and Silver -3.0%. Despite the equity declines, VIX opens red.




*most notable so far..the lower open..but the VIX still opens red. That sure doesn't bode well for the bears.

Anyway..yesterday was decisive enough of a new turn... today is day'2 of a new wave...and we'll surely broadly climb for another 3-5 weeks.

Notable weakness: F, RIG, TSLA

10.25am.. market is just churning out a bull flag on the 15/60min cycles.

Anyone shorting this is a maniac. Metals sure are weak, the broader trends all remain on track.

Pre-Market Brief

Good morning. Futures are a touch lower, sp -3pts, we're set to open at 1807. Precious metals are significantly lower, Gold -$16, Silver -2.8%..and the June lows look set to be taken out 'soon'. Equity bulls have a clear road now..until mid/late January.



After yesterdays huge gains, a little morning chop would be understandable.

With heavy QE today and tomorrow. equity bears face severe problems.

I would expect a weekly close in the sp'1820s.

Notable early mover: FB -2.4%, TSLA -1.8%

Video update from Oscar

Good wishes for today!

9.00am update - Futures drop... sp'-9pts..we're now set to open at 1800.

This is still just a minor retracement..and understandable.

Without question...any opening decline will likely recover into the afternoon...and I'd still be looking for the sp'1820s by the Friday close.

9.35am.. for those watching...indexes lower..but the VIX opens lower...

Bears haven't a hope.

Zero point in meddling on the short side.

The ironic result of QE-taper

To the dismay of most equity bears, the Fed cut QE, but the market soared. The market looks set for an easy ride to the upside, into mid/late January 2014. Broader upside into late spring is also expected, with an upside target zone of 1950/2050.

sp'weekly'8 -  mid-term outlook


For those short today..and who were expecting downside on news of a QE-taper...for what little it might be have my sympathies.

Yet..really...what was the setup?

A market that is still broadly trending higher - as seen on US/World monthly index charts
The Dow, which confirmed a giant SIX month bull flag last month
The hourly index/VIX cycles which looked respectively floored/maxed on the MACD cycle

..and the recent overnight futures, a drop to the 50 day MA...which was briefly hit today.

For those bears who were profitable at 2.01pm, only to see their positions turn into huge losses in the following 119 minutes, what about trading stops? I realise many don't like them..but hell.. you gotta be nuts to let a winning trade turn red..not least on an FOMC day.

Looking ahead

We have the weekly jobs data, home sales data, phil fed', and leading indicators. However, Mr Market will likely still be focused..and reacting to the Fed QE-taper.

Fed official Fisher will be making comments.

*there is VERY heavy QE-pomo of $5-7bn... bears face SEVERE problems tomorrow..and Friday.

Bears...can't win

I realise for those who called the taper right, and who were short, today was a really bad day. Yet, we have seen the market do this so many times over the years. How are some people still surprised at this kind of market response?

If there is one thing that the market doesn't like..its uncertainty. That has now been removed, and the equity bulls have a clear road into mid/late January - when renewed concerns about the debt ceiling will no doubt again rise up.

I hold to my original outlook from the early summer, seeking an intermediate wave'3 top in the sp'1950/2050 zone..before a sig' wave lower to the 1625/1575 be followed by sp'2500..if not much...much higher.

I'll close with the following...

sp'monthly3e, rainbow - hyper wave into late 2015/early 2016

I realise to many out there, the above scenario is sheer lunacy, but hey..just two years ago, the sp'1800s were considered 'crazy talk'...and yet here we are.

Goodnight from London

Daily Index Cycle update

The main indexes closed significantly higher, as the uncertainty of a possible QE-taper was removed. The sp'500 soared, +29pts @ 1810. The two leaders - Trans/R2K, settled higher by 1.2% and 1.3% respectively. Near term upside to 1830/50 into year end is expected.





A choppy first half of the day...followed by a very brief snap to the 50 day MA on the announcement of QE-taper... only to result in a market that was deeply relieved at the removal of this pretty annoying uncertainty.

I sure didn't expect QE-taper today, but I was not at all surprised to see the market snap higher.

The setup was always pretty lousy for the bears, and the daily close is absolutely decisive enough to clarify the direction for the next few weeks.

a little more later...