Volatility battles higher

Most notable action of the trading day was the double top in the VIX of 18.99. With equities seeing a typical latter day recovery, the VIX cooled down, went briefly negative, but settled higher by 6.5% @ 18.41. If sp' can break <1767 next week, VIX will see a mini explosion into the 20s.


vix'60min

vix'daily3

VIX'weekly

Summary

Volatility is clearly coming back into the US markets. For the first time (it seems like years), we are seeing some pretty interesting intraday swings.

This past week, we've seen the resistance zone of 19/20s hold the VIX, but, if we can break <sp'1767 next week, market should see a mini freefall..all the way down to 1710/1690s, and that would likely equate to VIX is mid 20s.

The weekly chart clearly highlights the key resistance in the 19/20 zone. A daily close >22 would be extremely significant, not least because it would take out the 2013 high!
--

more later..on the indexes

Closing Brief

US equities opened sharply lower (sp -22pts), but saw a traditional latter day recovery. The sp' closed -11pts @ 1782. The two leaders - Trans/R2K, settled -0.2% and -0.7% respectively. The past 5 trading days are probably a large bear flag, suggestive of a key break <1767 next week.


sp'60min

Summary

*a pretty weak closing hour, with a clear rollover on the hourly MACD cycle. It bodes more to the bears..for the Monday open.
--

..and another week..and month comes to a close at the worlds wildest and rigged casino.

With trading pros like Oscar getting whipsawed day after day, it is no wonder how the less adept are feeling exhausted and confused. However, I can only suggest anyone go stare at any of the daily or weekly index cycles.

There looks to be further downside next week, and it could be all the way to the low 1700s.

Have a good weekend everyone!
-
*the weekend update - late Saturday, will probably be on the world monthly indexes

3pm update - strong resistance at 1800

Despite yet another latter day recovery, the bigger daily/weekly charts are warning of continued downside next week. For those taking the short-side into the weekend, worse case upside next Mon/Tuesday of 1810/15..whilst downside is a viable 1710/1690s.


sp'60min

Summary

Well, one hour to go....lets see if all of that $5bn of QE money gets used up into the close.

The new QE-pomo schedule is actually released at 3pm.
--

*despite higher indexes..the VIX has actually managed to hold moderately higher.

To anyone shorting into the weekend, it looks a reasonable risk/reward..with very clear short stops either at 1800..or somewhere in the 1815/25 zone.
--

updates into the close...


3.02pm.. hourly MACD cycle sure looks vulnerable to rolling lower here. We've seen another bounce get stuck in the low/mid 1790s...

who wants to hold long into the weekend?    

...thats right...I didn't think so.
--

3.07pm...we're rolling over on the hourly index cycle.  VIX is picking up..almost 5%

3.10pm...rolling...rolling....rolling.   Lets see how many of the bull rats make a run for it, ahead of the weekend!


3.16pm.. we have a spiky candle for the 2pm hour..and we're seeing the initial downside follow through. Bulls are going to struggle to get a daily close in the 1790s.

Keep in mind, last weeks weekly close was ...1790. Hmmm


3.23pm... AMZN -10.7%... do profits actually matter to the market now? 

VIX +6.7% @ 18.44.  A weekly close in the 19s (above the double top)...now that would be something..will need sp <1780 though.


*I was just reviewing the pomo schedule. There is nothing much on Monday, but there is sig' QE on Tue and Wednesday.. but then nothing Thur/Friday.

So..bears can rule Mon/early Tuesday, but then side step until late Wed...and short for the big jobs data? Friday'7 market massacre?


3.31pm I smell weakness out there.  VIX looks comfortable (from the equity bear perspective), whilst indexes are looking weak.

So...we're set to close net lower on the week...and the month.


3.38pm..the rats do NOT want to hold long across the weekend. Watch them jump ship into the close!
VIX is highly supportive of this view, +7.1%


3.47pm..rats.. want OUT.   A weekly close <1780 would be a bonus.

What would really be a major hint of trouble... VIX 19s


3.50pm... EYES on the VIX !!!  It'll trade AH until 4.15pm..so...19s are still viable.

3.54pm.. we're going to conclude the week with a rollover on the hourly index charts...it bodes well for the bears at the Monday open.

..back at the close (a whole 5mins away)  :0

2pm update- hourly MACD cycle still positive

Most notable since the Tuesday open, hourly MACD cycle has remainder positive. Yet, after almost four full trading days, the bulls are unable to re-take the big sp'1800 level. Considering the daily/weekly cycles, a further wave lower - at least to test 1767, looks a given.


sp'60min

Summary

*I realise some have little concern for particular statistical indicators, but still...you can see on the above chart - MACD cycle (blue bar histogram) has remained positive since the Tuesday open. Even this morning, we did not go negative cycle.

..and the VIX failing to break 19..was my concern, for anyone not tightening stops at the open.
--

Anyway.. we have yet another re-short opportunity now available.

Risk/reward is perhaps 1.5% upside, vs a possible 7% downside next week.

Obviously the immediate trend is UP..but the 1810/15 zone is looking overly tough to hit.

Next week should offer a real chance at breaking 1765..and if that is achieved..we're looking at major downside to the 200 day MA/lower weekly bollinger.
-

Gold bugs ending the week on a downer. After opening gains of $10...metals are now rolling over.

The summer 2013 lows will surely be taken out..its just a matter of when.
-

2.25pm... hourly index/VIX cycles are possibly starting to turn. Nothing decisive yet..but for those wanting to short the market..the window is opening again.

Right now..short-stops would be at the big 1800 threshold. Worse case..1810/15 next week, but today's price action (opening drop..not the QE fuelled recovery) is suggestive we'll break lower again next Mon/Tuesday.

1pm update - battle continues

The bulls have managed another notable bounce from sp'1770, but the bigger daily charts still look ugly, with very clear bear flags. VIX turned briefly negative. Risk of further upside to the low 1800s, but with significant downside still viable...including a key break of 1767 - the taper'1 low.


sp'daily5

sp'weekly7

Summary

The daily bear flags are suggestive..'no higher than sp'1800' in the near term.

Weekly charts are still bearish, with the lower bollinger rising to 1795 next week.
-

Risk/reward for those re-shorting into the weekend..is rather good.

Notable weakness: AMZN -9.6%, UGAZ -5.6%
-

1.30pm.. VIX trying to creep higher, with sp'1784. The hourly 10MA is holding as resistance on the indexes @ sp'1789.

Hourly MACD cycle still moderately bullish, but vulnerable to rolling negative into the close.

Metals weak..after opening gains, Gold -$3, with the miners weak, GDX -1.1%

12pm update - bear flags on the two leaders

Whilst battle continues, the daily cycles are still warning of trouble. The two leaders - Trans/R2K, both have very clear bear flags, and they are still suggestive of a further attempt to break <sp'1765 next week. VIX has failed to clear the 19s, and is now set to turn red.


Trans, daily

R2K, daily

Summary

*VIX, we have a clear double top at 18.99, but underlying momentum remains strongly to the upside.

So...right now, its a very conflicted market, but..bears still have the edge - on a multi-week basis. Obviously today won't be the big break some were hoping for this morning.
-

VIX update from Mr T



--
time for lunch :)
-

12.12pm ...and there goes the VIX...red.   The failure at 18.99 was indeed a real problem this morning.

However...bigger daily charts are still holding bear flags. Ideally, anyone who exited short this morning, will have a good re-short opportunity later today/early Monday. 

Despite equity recovery...AMZN failing to recover...-9.2%. 

11am update - VIX is not breaking out

The market is still sitting pretty close to the edge of a major snap lower. However, most notable this morning, equity bears are still unable to break into the VIX 19s. Critical downside support is around 1767/65 - where the 100 day MA is lurking.


sp'60min

vix'60min

Summary

*we have a very clear double top in the VIX- a perfect one of 18.99.

Unless we break >19, bears should be making an exit this morning, since there is obvious major threat of upside.
--

In the bears favour...

Bear flags on the daily charts
Weekly trend is currently...down.
Monthly charts offering an initial rollover (but VERY early stage)

--
Long day ahead....keep those eyes on the VIX


11.06am.. bears are losing it..window is likely closing at the typical 11am turn time.

VIX 17s imminent..with sp'1782...

I will note though, the weekly close still looks to be bearish, but the longer the bears take to test 1760s, the harder it gets to break it.


11.10am bears failed....VIX 17s..and market looks set to make another play for the low 1800s. Anyone short should have been short-stopped in the last hour.

$5bn of QE money out there today...and 'end month' issues.


11.30am.. battle continues. VIX 17s does not bode well for the bears..and with sp'1785..its not looking good for anyone still holding on the short side.

Daily charts still look good though..bear flags all over the place.

AMZN -9%....first time in a long while that opening post earnings declines not been reversed.

10am update - critical morning

The US indexes are sharply lower, and all those bear flags on the daily cycles..are close to being confirmed. A break under sp'1765 will open a fast and nasty drop to the 200 day MA..in the low 1700s. Metals are bouncing, Gold +$10. VIX has got stuck at the Monday spike high of 18.99


sp'daily5

vix'daily3

Summary

Opening black candle on the VIX, double top on the daily?

VIX has so far failed to break the Monday high of 18.99. Until that is achieved..equity bears need to be highly cautious...and tighten those trading stops!
--

So..we're lower, and typically, we'll see a secondary minor wave into 11am.

If market has not broken <1765 by late morning....the bears should be looking to make a run for it.
--

VERY busy day ahead...and with $5bn of QE... the market is to be treated...carefully.


10.05am..such a marginal situation. Problem remains..VIX not in the 19s...bears face major threat until that threshold is broken.

..and as is always the case..bears are battling against the clock.  QE money will be kicking in soon.


10.17am.. tick tock...tick tock....bears running out of time.   VIX still not >19.

Notable mover: CMG +14%..on very good earnings. Net margins of 10% or..which puts AMZN <1% to absolute shame!


10.29am..This is prime time for the bears...to break <1770..with VIX 19s... arguably, window of opportunity closes in the next 30/60mins.


10.36am..renewed VIX gains...almost there.........

10.43am Bears just still unable to break 19s.. anyone still short...surely should be tightening stops further here. $5bn of QE money out there today....bears got to keep that in mind.

Notable weakness: AMZN -8.2%.. so far..unable to see the usual post earnings recovery bounce.

Pre-Market Brief

Good morning. Futures are sharply lower, sp -24pts, we're set to open at 1770 - at the recent low. It would seem highly probable that we'll break the key zone of 1767/65 this morning, which has huge implications for the months ahead.


sp'daily5

Summary

If we break <1765..it will be decisive enough to....

1. open a fast and nasty mini crash wave straight to the 200 day MA (1705), and lower weekly bol (1680s)

2. If the lower weekly bol' is hit..I'll call 1850 as an intermediate top for the giant wave from Oct'2011.

3. The subsequent bounce - from the low 1700s is likely a larger sub'1..with a bounce into March/April, and a significant collapse wave in April.
--

Major day ahead

Ohh, and yes...the 'bounce'..is surely already over - at the 0.38% fib (see hourly chart). Those hoping to re-short in the 1810/15 zone can likely kiss that idea goodbye. Instead, it is an issue of 'chase it lower, if break <1765).

Today is probably the most important day for the bears in over two years. Equity bears should seek a daily close in the 1750s..which will open up a Monday drop of a further significant amount.
--

Have a good day everyone!
-

Notable early movers: AMZN -8%, GOOG +4%...both justifiable earnings reactions
-

Video update from Oscar



..indeed, he recognises he is indeed the worse analyst this week on the planet. lol
-

9.00am sp' holding -24pts....at 1770.

Eyes to the VIX...bears need to see a new high in the 19s..if yes..then door is open to much higher levels.
-

Let me be clear..if we do break <1765 this morning, the door is open to a real nasty drop. Hourly MACD cycle offers 10-15 trading hours of downside..and frankly...that could be all the way to 1700.

*huge QE of $5bn today, but if <1765..it won't matter. Nothing will.


9.22am... market set to open , sp -21pts @ 1773.

As noted..look to the VIX, bears need to see 19s to have confidence of a possible break <1765.


9.36am.. VIX fails to break 19s....and sp' still holding 1770s...  Bears have until the typical turn time of 11am.  As ever, anyone currently short..should be tightening short-stops here, in case this nonsense does not break.


9.43am... market on the edge....bears got to break lower soon..or this could all reverse. Still no VIX 19s......but real close...18.98 !

End month QE fuelled bounce

Equity bulls look set to end the month with further gains. With $5bn of QE fuel, there remains high likelihood of the bounce reaching the sp'1810/15 zone - where there is multiple resistance. Regardless of the bounce, January is set to close lower by around -2%.


sp'monthly

Summary

A simple reminder of the broader up trend, you can clearly see first key support is the rising 10MA..which is around 1705. If sp'1850 was an intermediate top, then we'll slip into the lower 1700s within the next few weeks.


Bullish upside?

For those who think 'this rally ain't dead yet'... here is one scenario that I am still keeping in mind...

sp'daily3b - fib levels

If we can clear the 50 day MA in the 1810s, and put in a daily close in the 1820s, bears should clearly have been short-stopped. There would then be viable March/April upside into the 1880/1920 zone.

Considering the style of price action from last Friday though, I'm highly inclined against the above scenario.
--

Looking ahead

We have an interesting little array of econ data tomorrow, with personal income/outlays, consumer sentiment, and most important..the Chicago PMI. Market is expecting 59, and anything in the low 60s would no doubt give the market an excuse to rally into the 1810s.

*there is very heavy QE-pomo of around $5bn...bears beware!
--

It has been a busy week so far..and I'll leave it at that.

Goodnight from London

Daily Index Cycle update

US indexes saw their first significant gains in over two weeks, sp +19pts @ 1794. The two leaders - Trans/R2K, both settled higher by around 1.5%. There is near term bounce upside to 1810/15, where there are multiple aspects of resistance.


sp'daily5

R2K

Trans

Summary

We have what are pretty clear bear flags developing on the daily index charts.

Baring a continued surge into the sp'1820s, the market looks set for another wave lower. The big question is whether we'll be able to put in any daily closes <1765. If that is achieved, the door is open to a fast move down to the 200 day MA, which will be around 1707/10 next week.

a little more later...

Volatility slips a little

With the equity indexes seeing the first significant gains in over two weeks, the VIX is continuing to broadly cool down - since the Monday high of 18.99. The VIX settled -0.35% @ 17.29, with an intraday low of 15.96.


VIX'60min

VIX'daily3

Summary

*the closing hour mini surge, and the daily reversal candle, are offering a potential warning, but with $5bn of QE tomorrow, I find it hard to believe the VIX won't continue falling into the weekend.
---

Near term target downside remains 15/14.50..before a renewed surge.

The ultimate issue is whether sp' can put in a daily close <sp'1765, which would likely kick the VIX into the low 20s - for the first time since early October.
-

more later...on the indexes

Closing Brief

The main indexes saw their first significant gains in over two weeks, sp +19pts @ 1794. The two leaders - Trans/R2K, both closed higher by around 1.5%. There is near term upside to the 1810/15 zone, before a likely rollover..to at least test the 1767/65 zone.


sp'60min

Summary

*awaiting AMZN earnings
---

I'm kinda tired..so....I'll leave it at that.

--
the usual bits and pieces to wrap up the day..across the evening.
-

EARNINGS update...

AMZN missed on profits..and the stock has fallen 9/10%..with a recovery to -4/5%
GOOG were roughly in line, and stock is holding +2.5%

3pm update - minor upside into the close

Considering the smaller 15/60min index cycles, the market is set for minor upside, with a daily close of 1795/1800. Metals remain weak, Gold -$24. Oil has lost some of the gains, now +0.7%. Equity bulls look on track to make an attempt to clear the 50 day MA -1812, tomorrow/Monday.


sp'daily5

Summary

The above chart is probably more than enough right now.

We have one clear bounce day, and more than likely, we'll see some follow through tomorrow.
-

I realise some out there are now touting new yearly highs..in the upper 1800s. Hell, even I'm open to the low 1900s.

As ever..its all about key support/resistance, the MAs, and QE..of which we have $5bn to endure tomorrow. Bears beware!
--

*AMZN earnings at the close. Did they make any $ this past Christmas?
-

3.14pm... we have a clear baby bull flag on the hourly index charts...bodes for upside into tomorrow.

*AMZN and GOOG earnings at the close..so..stay tuned!

2pm update - key resistance in the 1810s

The market is holding onto significant gains of around 1.2%, with the sp' in the 1790s. A further day or two to the upside seems likely, before the trembling resumes. Metals remain weak, Gold -$26. VIX is quietly melting lower, -6% in the 16.20s


sp'daily5

Summary

The 10 and 50 day MAs are both indicative of where the wall is.

Any daily closes >1820..and the near term bearish scenario gets dropped, otherwise...its a simple re-short.

For the big money out there..the risk/reward will be good, 1% upside..whilst downside of 7% or so.
--

Patience....bears.....patience.

*CNBC continues to provide comedy gold today, with their relief at the market rising.
-

AMZN have earnings at the close. Did they actually turn a profit in the Christmas season?

Weekly/daily charts offer upside to 425/430, to those who don't care about valuations.

1pm update - making a play for the 1800s

The bull maniacs are pushing hard to re-take the sp'1800s. However, as a fair few recognise, there are multiple aspects of resistance in the low 1800s. We'll surely get stuck..no higher than the 1810/15 zone. Metals remain weak, Gold -$26, whilst Oil is holding gains of 1.1%


sp'60min

Summary

Not much to add.

It really is just a case of sitting back, and letting the bulls push this higher..probably at least into the Friday close.

--
Notable movers...

FB +15%, TWTR +8%
GDX -2.4%, UGAZ, -17% 

12pm update - bullish break through

With the break to sp'1795, the bulls look set to battle to the 1810/15 zone within the next few days..which will likely equate to VIX 15/14.50. From there, we should roll over again - at least that is what the bigger daily/weekly charts would support.


sp'60min

vix'60min

Summary

*you can see VIX is on the slide..and the low 15s look an easy target
--

Well, anyone on the short side had plenty of opportunity to exit yesterday, if not also the Monday open.

Now..its just a matter of waiting for this bounce to complete.


VIX update from Mr T.


--
time for tea :)

*just turn on CNBC for a few minutes (if you can stomach it) some of the bullish talk is hilarious. I only imagine how hyper confident they will be on another up day to 1810/15. 

11am update - its all fine now, yes?

With the market holding borderline significant gains, the cheer leaders on clown finance TV are happy and oh so pleased with the world. After all, everything is fine now, the correction is over, right? Arguably, bears should be cheering on a bounce to the 1810/15 zone...it'll make for an easy re-short level.


sp'daily5

sp'weekly7

Summary

Whilst things are kinda quiet, I want to highlight the 10MAs...on both the daily and weekly cycles.

We have a very natural upside bounce zone of sp'1810/15.

*with heavy QE tomorrow, is it arguable that bears should simply sit back and wait until early next week.

Even better of course..another $5bn less QE-pomo a month..starting next week. The underlying bid on this market is at least being somewhat reduced.
--

Notable strength: FB +15%, TWTR +7%

weakness: BTU, -4.7%, worse coal miner of the day so far..the other miners are only a touch lower

10am update - morning gains

The indexes are battling to build significant gains, with the sp' fast approaching the first key resistance of 1794. Metals are seeing some post taper reaction, with Gold -$26, Silver -2.9%. VIX is on the slide, and looks set for 15/14.50.


sp'60min

vix'daily3

Summary

*reversal candle on the daily VIX, but I think it is to be dismissed.
--

No doubt, those holding overnight short are getting real annoyed, but worse..there could be a few days to complete this latest bounce attempt

Underlying momentum on the daily/weekly charts will remain VERY bearish for at least another week or two - even if we get to 1810/15. It remains the case..bounces are to be shorted..or to exit existing longs.
-

So...key upside re-short zone remains 1810/15. If market can somehow claw to there..it'll be a relatively easy re-short zone.

*notable weakness: UGAZ -13%..as nat gas prices drop -4% or so.. EIA gas report @ 10.30am. Is it summer yet?

Pre-Market Brief

Good morning. Futures are higher, sp +8pts, we're set to open at 1782. Metals are sharply lower, Gold -$25 (delayed reaction to taper?), with Silver -3.0%. Equity bulls have a very tough task, just to break back into the low 1800s.


sp'60min

Summary

*Q4 GDP came in 3.2%. slightly above expectations, whilst jobs data was not so good @ 347k.  As ever.. all such data is to be treated 'carefully'
---

So...here we go again....

Near term threat of a move to the 1810/15 zone - although that will doubtless take at least a few days, but we should still see a broader down trend..at least to test the 1767/65 zone.

Considering the price action of last Friday, I'm still highly inclined to think the market has put in a key multi-month high already.
-

Notable strength: FB, +18% @ $63..on what were good earnings.

TWTR +7%..no doubt a 'sympathy gain'...to FB.
--

9.05am.. sp +14pts...we're set to open 1788.  However, there is strong resistance around 1795..and it'll be tough to break that today.

However, bulls have $5bn of QE tomorrow..so..if market can close in the low 1790s..the 1800s ARE viable tomorrow...with a test of 1810/15 early next week.

Metals sure are weak. Gold was -$31 just earlier, with Silver -3.5%.  Certainly, it seems a delayed taper reaction.


9.38am ...here come the 1790s...but we've been stuck <1795 for days.

FB +14%..cooling down a little.  VIX set for the 15s.

A second QE taper

With QE taper part'2 announced, it was a choppy day for US equities, with the sp -18pts @ 1774. The two leaders - Trans/R2K, settled lower by -1.2% and -1.4% respectively. Bear flags are developing on the daily cycles. The equity bull maniacs are in real trouble if market slips <sp'1765.


sp'weekly7 - bearish outlook

sp'weekly8 - bullish outlook

Summary

Things are very marginal right now. We're a mere 0.5% from breaking the key sp'1767/65 zone. Any daily close under that will open up a very fast and nasty move to the 1705/1680 zone - where the 200 day MA, and the lower weekly bollinger are lurking.

Baring a break <1767/65, my best guess...another push higher..to sp'1810/15 across the next few days. From there, I'd most certainly be seeking another rollover.

I have to note..weekly'8 was the original outlook - all the way back from last summer. If correct, it'd offer a further wave lower..but to be followed by one final lurch higher, into the 1880/1920 zone by late March/early April.

A hit of the lower weekly bollinger, and sp'1850 will be confirmed as a key intermediate wave'3 top. From that point, it gets 'relatively' easy for the doomer bears.


The 'top is in' scenario.

The following is especially posted for the remaining doomer bears out there. I think it merits at least a few minutes 'staring time'.

sp'weekly4c

Essentially, I'd like to see a hit of the lower weekly bollinger - currently 1681 (rising 10/15pts each week), then a multi week bounce, concluded by a collapse wave - much like late July/August 2011. We can at least dream a little on this, yes?


Looking ahead

We have the usual jobless claims, and pending home sales. However,  most important, the first reading for US Q4 GDP. Market is expecting 3.0%, which seems a pretty bold target.

*next sig QE, is not until Friday, but that is a very heavy $5bn or so.
--

The second cut in QE

I had expected a reduction of $10bn today..so..it was kinda pleasing to get that right. Obviously..the next thought was..'Will they cut another 10bn at the FOMC of March 19?'

One view that many had last year - myself included, was that the Fed would eventually reduce QE to 60/50bn..only to then see the market drop 20%..and then spool up the printer to new highs >$100bn a month. After all, why wouldn't the fed also want to start buying US student debt?

The months ahead..sure won't be boring!

Goodnight from London

Daily Index Cycle update

With the Fed cutting QE by another $10bn, equities battled hard to hold the key sp'1767/65 zone, with the sp' settling -18pts @ 1774. The two leaders - Trans/R2K, slipped a significant -1.2% and -1.4% respectively. There are bear flags developing on most indexes.


sp'daily5

R2K

Trans

Summary

So..new weekly cycle lows for most indexes. The Trans/R2K look especially weak, and those could be multi-day bear flags forming. If yes, that would suggest the critical sp'1767/65 zone will NOT hold - offering a straight drop to the 200 day MA in the low 1700s.
--

Sp'500 broke the Monday floor, although the VIX did not break the Monday spike high of 18.99.

Without question, the bulls will face real problems on any daily close <1765, but hourly index cycles look pretty exhausted in the near term. A rally to the sp'1810/15 zone still looks viable, and with heavy QE on Friday, bears should be cautious.
--

Video update from Oscar



*interesting to hear how bearish Mr Permabull has become. Especially pleasing, is to also see him note the bear flags developing on the daily charts.

As noted, any daily closes <1765..and that is when things get real interesting.

--
a little more later....

Volatility climbs, but a lower high

Despite equities breaking under the Monday low of sp'1772, the VIX failed to break the Monday high of 18.99. The VIX settled +9.8% @ 17.35. Equity bears should be mindful of this divergence, and there remains potential for upside to the sp'1810/15 zone within the next 2-4 trading days.


vix'60min

vix'daily3

Summary

*a very notable black-fail candle on the daily charts, which should concern any equity bears holding short into Thursday.
--

So..the VIX did manage some significant gains, but the divergence between the sp' - breaking the Monday low..whilst VIX only managed the low 18s..should be a real concern to the equity bears.

I do broadly expect the key zone of sp'1767/65 to be tested, but that now seems more likely next week.

Any snap <sp'1765, and the VIX will snap into the 19s..if not the low 20s. The 2013 high of 21.91 is an obvious target, along with the 2012 high in the 27s, but the latter sure is a long way up from here.
--
more later..on the indexes

Closing Brief

With the Fed cutting monthly QE by a further $10bn, the indexes battled hard to hold above the critical sp'1767/65 zone, sp closed -18pts @ 1774. The two leaders declined by -1.2% and -1.4% respectively. There remains opportunity for upside to the 1810/15 zone, before the next major rollover.


sp'60min

Summary

*earnings due: FB, QCOM
--

Well, that was a choppy and real messy afternoon.

The break under the Monday low of 1772 will have kicked out some of the bulls..and worse..drawn in some bears..only to then whipsaw into the 1780s.

The daily close in the low 1770s still keeps open a move to the 1810/15 zone.

More than anything today, most notable was the divergence between the indexes and the VIX. Whilst sp' broke a new weekly low..the VIX is still a fair way from the Monday spike of 18.99. Maybe I am making too much of it, but really, I think its a problem for those equity bears seeking a clear break <1767/65.
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the usual bits and pieces across the evening
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EARNINGS update...

QCOM...numbers were marginally better than expected...stock ..flat.
FB, beat...stock is 1-2% higher..but certainly nothing of note.

3pm update - Taper'2 is a GO

The Fed have cut QE by $10bn a month (starting next Monday) to $65bn a month, as the market had expected. Despite a brief break <1772..the bears look exhausted today, and the door is now open to the 1810/15 zone..with VIX in the 15/14.50 zone.


sp'60min

vix'60min

Summary

Okay..so..a really tricky hour..but then.post Fed hours are often a real mess.
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It would appear the market has stabilised after breaking the Monday low..and we're now set for a claw into the 1800s.

Primary target...remains 1810/15..where there are 4 or 5 key aspects of resistance.

I STILL expect the 1760s to be tested..but that now seems unlikely until next week.
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updates into the close..


3.03pm another small wave lower.. sp'1774....it sure is a mess out there..but.....

VIX is NOT showing any real concern. Equity bears really need to keep that in mind. Baring a break into the 19s....bears have a real problem right now.


3.13pm...it remains an ugly mess..now we have the hourly MACD cycle rolling over...bearish crosses all over the place... 1767/65 remains the key zone.

Despite the move under the Monday equity low, VIX is still well below the Monday spike of 18.99.


3.19pm... FB earnings at the close...one to watch!  Trend is broadly bullish, but short term bearish. Upside to $59/60...kinda reminds me of NFLX.

VIX +12%..but still...not in the 18s


3.33pm..it remains very marginal. I still think the one issue bears need to keep in mind..VIX is NOT showing any real upside kick. I'd be concerned of upside risk across Thur/Friday - not least with $5bn QE on Friday..to conclude the month.


3.44pm.. market again trying to push back upward.

Eyes on the VIX..which has FAILED to break a new  high..whilst sp' did marginally break the Monday low.

Bears...beware!


3.49pm.. VIX cooling down...equity day-trading bears should be making a run for it   Real risk of sp'1810/15..before the next major wave lower.

Notable strength: STX, +4.7%, but still..a likely dead-cat bounce.

2pm update - here comes the Fed

Time for another FOMC announcement. Market consensus is for QE taper'2 of $10bn, taking monthly QE down to $65bn a month..starting next week. Ironically, if the Fed don't cut QE, it'd likely greatly concern and upset both the US..and world capital markets.


sp'60min

Summary

The levels are clear...

If take out morning low 1774..then test of the very important 1767/65 area. If that fails..then it gets really fast and dirty in market land....with a drop to 1705/1680

Otherwise...another push higher..best case 1810/15..before a rollover..and then a test of the mid 1760s.

In either case...the mid 1760s look to be tested...whether today..tomorrow..or next week
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...standing by!


2.01pm.. TAPER 2...is a GO...  $10bn..cut starting next Monday.

Markets reacting with some relief..with uncertainty out of the way.

Metals...real twitchy...still vulnerable to turning red this hour.

...so far.. the 1774 morning low is holding...and there is very high risk of late day ramp.


2.05pm...VIX cooling down..as uncertainty is gone....  Gold sure looks vulnerable.


2.13pm... Market on the edge of breaking <1774..if so...then 1765....

Things sure are borderline. Bulls need to appear soon..or this market is in trouble for the remainder fo the week.

VIX +9%...real choppy...  Gold...holding moderate gains...

Still no clear direction yet.   !!!


2.18pm...bears running out of time here...longer we remain >1774... the more likely we snap higher into the close....

BREAK 1773... new intraday low...door is open to 1767/65 in the remainder of today.

1771..on our way to test 1767/65 zone....
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2.20pm... a CLEAR break of the Monday low....so..can the bulls hold the CRITICAL 1767/75 zone..or ..straight down to 1705/1680...within 'days'?

The safer 'chase it lower' level is on any break <1765. Clearly, the earlier ABC count is now invalid.


2.29pm. crazy market...trying to put in a spike floor.... equity bulls need >1785 to rip out of the danger zone. VIX is churning largely sideways, +7%


2.36pm...market battling to retake the hourly 10MA of 1785.... if broken..then upside to the low 1800s is again viable.

Crazy day..not least since the Monday low was taken out...only to whipsaw back upward. VIX still cooling down. +6%


2.44pm fiercely tricky day....with that FAILED break <1772...only to whipsaw higher. Bears are likely exhausted in this move....bulls have the ball... 1st and 10...right ?

1pm update - chop ahead of the FOMC

The market is remaining in a standard holding pattern, ahead of the FOMC announcement at 2pm. Metals are moderately higher, but look especially vulnerable this afternoon. VIX is holding gains of around 10% in the mid 17s, but a daily close in the 15s is very viable.


sp'60min

Summary

..nothing to add, other than likely C wave upside..baring a break <1774.

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*just noticed a VIX update from optionmonster..the first in a few weeks...



Bizarrely..its like a flashback to 2005, with screen res' of 240x, urgh
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One hour to go...

*again, for the record, my guess... Taper'2 of $10bn, to a mere $65bn a month. Hey, thats only $780bn annual rate..still greater than the 2008 emergency 'stop the end of the world' TARP program, lol
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More than anything, look for the metals to get smacked lower, whilst equities might jump..and make a vain play for the low sp'1800s.

As ever though...it'll probably take until 2.30pm to discern a clear direction.
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1.16pm continued chop...in the 1780s.

Bears must be mindful...unless <1774...real risk of a jump into the low 1800s by the close..regardless of taper..or not. 


1.32pm Notable strength in Natural Gas.. DGAZ +13%..so..nat gas prices must be around 4.5% higher today.

12pm update - a wild afternoon ahead

Mr Market is likely to remain in mild upside-chop mode for the next two hours. However, we're very likely to see some pretty dynamic action once the FOMC announcement is made. The precious metals look extremely vulnerable to snapping lower.


sp'60min

GLD, daily

Summary

*there is a lot to cover..I'll battle hard to cover it..

Gold is holding gains of around $10..but there is very real risk of a snap lower..with a daily close -$25/35. Daily charts look....very vulnerable, not least with the current black-fail candle..at resistance!
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As for equities, upside to 1800 looks likely..but it'll be damn hard to break much above 1805/10.

Best case for the bulls..a spike high, early tomorrow 1810/15...on US/EU GDP data, but we might simply fail this afternoon. We'll just have to see what sort of price action we get in the 2pm hour.

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time for lunch !


12.31pm... chop chop...still in the 1780s...but importantly..holding well above the early 1774 low.

Gold looks weak, now +$8..things sure will get interesting in <90mins.

11am update - small C wave underway

Some real wild price chop this morning, and no doubt..many are already starting to get confused. It looks like we have a B wave floor of sp'1774..and we're now in a small C wave to the upside. Primary upside remains 1810/15..but..we could easily fall short of that...1800/05.


sp'60min

sp'daily5

Summary

Reflect on the daily chart...there is is clear multiple resistance in the 1810/15 zone. I just can't see the bull maniacs breaking above that to new highs, at least not in the current cycle.
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So..we have a clear re-short zone...later today/early tomorrow. Just a case of waiting for a clear rollover/levelling phase on the hourly MACD cycle.

Arguably, the pro traders out there will be building shorts from 1800/05....with short-stops in the 1820s.
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Notable strength: STX, +2.9% @ $53, but that is likely a dead cat bounce, after the -12% post earnings drop. Primary downside is 47/46.
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11.30am.. sp'1785.. looks pretty clear now. The maniacs are making a play for the 1800s...later this afternoon. VIX probably set to turn red later..if briefly.