Thursday 2 January 2014

Volatility moderately higher

With equities beginning the year somewhat weak, the VIX continued to claw higher, settling +3.7% @ 14.23. Near term outlook is for the VIX to remain in the mid/low teens. VIX looks set to remain <20 for at least another 2-3 weeks.




The fourth consecutive daily gain for the VIX, but the daily candle is a black-doji, and VIX will probably go no higher than 15 in the coming days.

VIX is low, and it won't take much of an up day in the equity market to knock VIX back into the 13/12s.

more later on the indexes...

Closing Brief

US equities began a new year on a moderately negative note, with the sp -16pts @ 1832. The two leaders - Trans/R2K, slipped -1.5% and -1.1% respectively. There is relatively easy upside to the sp'1860/80 zone within the next few weeks.



*I've added a count to the hourly chart, and it relates to the sp'weekly8 chart, where I am seeking the completion of a bigger sub'4 by mid/late Jan.

From there, perhaps 5-7% lower into mid Feb...and then one final lurch higher - of the ramp from Oct'2011, to a target of sp'1950/2050 by April/May.

the usual bits and pieces across the evening.

3pm update - algo bots playing stop run games?

The market appeared to floor at 1830, only for a snap lower, but then a renewed attempt to claw higher. Are the HFT algo-bots playing stop-run games to start the year? Regardless, primary trend remains to the upside. Gold +$21, Oil is seeing a very significant drop of -3.2%



*equity bulls should be content with any close >1833

If there is one thing that is extremely annoying..getting stopped out, only to see the market whipsaw back higher (or lower). From the price action today, it sure looks suspicious, with that brief break <1830.

updates into the close...

3.15pm.. market wants to ramp...although yes..its been a bit of struggle today. Is everyone still on holiday, hence the lack of buyers?

TWTR +4.2%, so...everything is still fine in hysteria land.

3.29pm... market battling for a close >1833...

I've added a count, which relates to the weekly'8 chart, that I have been droning on about for the last 7-8 months. Only issue is where do we max out in mid/late Jan...1860, 70, 80..or even a touch higher.

I'm starting to think, we won't even break back under 1800 by mid Feb...which will mean the mid 1900s will be an easy target by April.

3.45pm.. best case close for the bulls... 1835/36.

back at the close !

2pm update - awaiting the latter day recovery

For much of the past two years.since the distant low of sp'1074, we've seen the regular phenomena of the 'latter day recovery'. This mornings weakness could yet be fully negated by the close. Metals are holding gains, Gold +$24, whilst Oil continues to weaken, -2.9%.



Interesting day to start the year.

Price action is very much nothing for the bears to get excited over.

Best guess...near term upside to 1860/80 zone within two weeks, and then a moderate down wave of 5-7%. The following chart has remained effectively on track since last summer...


A minor 4 down..and the 5 up into the March/May zone.

I sure won't be meddling short indexes/long VIX until at least March/April.

2.22pm...a surprise snap lower!  Hmm...and no doubt stops are getting hit.

Are the algo-bots playing stop-run games today? 

2.33pm We're at the typical turn time in the afternoon, but bull maniacs need >1833 to halt this series of minor waves lower. the bigger picture, this is all minor moves.

1pm update - nothing to get excited about

The US equity indexes are lower by around 1%, but price action really isn't suggestive of anything for the bears to get excited about. After all, the weekly charts are offering the sp'1860/70s in the near term, whilst the monthly charts are now offering 1880/1900 by late January.


Ford, daily


*Ford remains weak, a clear bear flag on the daily chart...downside target remains the low 14s..before upside into the late spring.

As for the indexes, this is surely just a little tease to start the year, before the upside resumes.

I suppose it could remain choppy for a few more days, but hey..the QE-pomo resumes next week, and then we'll probably be in the 1850/60s...with the bears still desperate for something more significant than what we have seen this morning.

Major ramp viable from 1.30pm onward.  Will be interesting to see how the first 'latter day recovery' of the year proceeds.

1.25pm.. Well, its prime time for a snap higher..lets see what the bull maniacs got in them!

1.35pm, for the day-traders out there, makes for an easy long trade, with a long-stop at 1830/29.

A daily close in the 1840/45 zone...very viable..plenty of time still left today. it comes....bears have no excuse to not see this one coming!

12pm update - weak, but nothing significant

The market fails to hold the earlier low, and the door is now open to the sp'1812/10 zone. Price action though is very muted, and anyone holding short across multiple days will surely still get nailed. Metals are holding gains, Gold +$21, whilst Oil is now sharply lower, now -2.3%.


GLD, daily


*Until GLD puts in a few daily closes >122, anyone getting excited about some kind of major floor on Gold - or the miners, is making the same mistake they did across ALL of 2012.

Obviously, with the break of 1833/30, the door is now open to the 1812/10 level.

Price action/market mood though is still very strong to the upside. As noted earlier, the bears have a QE-less window until next Tuesday. After that, the usual problems resume.


time for tea :)

12.36pm.. market still holding the 1830s..on what is a pretty quiet day. I sure don't see any power on the downside, despite a Dow -135pts. Price action just doesn't suggest anything for the bulls to worry about.

11am update - floored in the low 1830s

The opening weakness looks to have played out, with a floor of sp'1834. The only issue now is how we close the week. A weekly close in the 1850s looks very probable, and that keeps open the 1875/1900 zone within 2-3 weeks. Metals are holding gains, whilst Oil is especially weak.


Summary expected..the 1830s have held.

There really isn't any downside power..but then, that has been the case for two years.

The only thing bears have in their favour is no sig' QE until next Tuesday.

Indeed, that continuing QE is still the problem for the equity bears. $40bn vs $45bn ...ain't that much of a drop.

11.10am.. notable strength in the coal miners.. BTU, ANR...all the usual suspects.

I'm a fan of the miners of course, but if you believe the market is going to decline to the low sp'1600s later this year, I'd be reluctant to chase them at these levels..even though some of them might ramp 50% by late spring.

BTU, daily

The 22s look viable this month..perhaps $30 by late spring...and then $20 again by early autumn.

Long is one of my favourite energy stocks.

11.54am.. well, there goes 1833...hmm. Oh well, door is open to 1812/10..Still though, I won't be short it.

10am update - moderate weakness to begin 2014

The market opens moderately lower, with the  sp' slipping into the low sp'1830s. The 15/60min index cycles look set to be floored by the typical turn time of 11am. As ever, it is now a case of how strong the latter day recovery will be. Metals are bouncing.. Gold +$20




*note the upper bol 'on the Dow is now in the 16800s

Well..we're off and running...with some weakness, but bears can't expect much in the near term.

Certainly, sub 1800s look completely not viable for some weeks.

DRYS, daily

Probably just another wave as part of a back test. So long as DRYS can hold the $4s, the 5s or even 6s look viable within a few weeks.

..updates across the day...and the year!  :)

10.06am.. sp'1834....1pt from the gap zone.. in will likely hold.

If fail..then door is open to 1812/10..but I find that hard to believe. Its time for the bull maniacs to start buying..right now.

10.13am... market looks to have floored at 1834...we'll know for sure by around 11am.

Regardless, those bears getting overly excited at the not going to end well.

Pre-Market Brief

Good morning. 2014 begins with the futures moderately lower, sp -6pts, we're set to open at 1842. Precious metals are significantly higher, Gold +$17, Silver +3.4%. A new trading year begins, and one thing is for sure, it won't be boring!



*keep an eye on the monthly charts at the open, look to see how the upper bollinger band will jump..probably to the dow 17000s, along with sp'1890/1900.

Well, a new trading year begins. good luck everyone!

As for today, there should still be very considerable underlying upward pressure. Certainly, we won't be seeing any sig' declines any time soon. 

notable early mover: DRYS, -7%. I don't know why, and I doubt that will last long anyway. The weekly charts for the shippers - and the BDI itself, is extremely bullish.

9.09am.. Oil is really starting to slip, -1.7%... the moderately higher USD, +0.6% can't be helping, although that sure isn't a problem for the metals, with Gold +$19

9.21am..ohh the humanity, Dow is set to open -80pts.

As ever...don't get lost in the bearish hysteria..because that is what we will see a lot of this Jan/Feb.

9.33am.. Upper bol on the monthly charts...jumps to Dow 16850s, with sp' 1880s, kinda in the range I was looking for.

VIX +4%...but still in the 14s. 

9.41am.. market should level out around 1835/33...  where there is a clear gap to fill.

I'd be very surprised to see a break into the 1820s.  DRYS -9%.. hmm