sp'daily5
R2K, daily
Trans, daily
Summary
I can understand how those who are more focused on the R2K were pretty impressed by the further declines this morning. Certainly, it feels like a fair while since we've seen such persistent weakness. The R2K has broken the rising channel - from the 1080 lows, but on any basis, I can't see it much below the 50 day - which later this week, will be around 1150.
In the scheme of things, a two day pull back is entirely natural. When you consider the broader market - not least the 'old leader' Transports, the market actually held up pretty well today. Indeed, there were notable reversals on a great many individual stocks, all suggestive that a short term low has already been put in.
Personally, I will be somewhat surprised if we see the sp'500 take out today's low of 1959, but even if we do... we'd still level out somewhere not too much lower.
Volatility battling higher
With the market brushing sp'1960/59 today, the VIX was in the mid 12s, but only managed to close with gains of 5% in the upper 11s. Even the low teens still seem out of reach.
VIX' daily3
Right now, the upper teens/20s look entirely out of range, even if the market fell all the way to test the big sp'1900 threshold.
I certainly have zero intention of being long VIX for at least some months, and if we are to see the sp'2100s, then I won't be meddling in the VIX until spring 2015, which is a pretty depressing thought.
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Closing update from Riley
I'm in agreement will Riley, this is a mere pull back, and we'll likely be in the sp'2000s within a week or two.
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Looking ahead
The only thing of significance tomorrow are the FOMC minutes (2pm). No doubt the algo-bots will be playing their word count games, seeking reassurance of 'extended low rates', etc.
*next sig' QE is not until next Thursday
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Thoughts of Brazil
Tonight's semi-final of Brazil vs Germany was nothing less than a sporting horror show. I think many watching are still asking themselves 'did we really just see Brazil lose 7-1' ? I've never seen a game like it, and doubt I ever will again. Watching the host nation get systematically dismantled across 90 minutes... was an utterly bizarre TV spectacle.
I can only imagine the upset and dismay across Brazil this evening. No doubt though, they will bounce back. Brazil will actually play again in the competition this Saturday, in a 3rd/4th place play off, probably against the Netherlands. Perhaps a win, or at least some semblance of 'quality play' will help to soothe against a defeat that for those watching... will never forget.
I will now hope for an Argentinian win tomorrow, only to then get beaten 100-0 by the might of Germany in the Sunday final.
Goodnight from London