Tuesday 7 January 2014

Volatility slips again

With the main indexes breaking the down trend, the VIX naturally slipped lower, settling -4.7% @ 12.92. Near term outlook is for the VIX to remain in the 14/11 zone for the next 3-5 trading days. VIX increasingly looks unlikely to break back >20..until the late spring.




*the morning flash-spike remains something of an anomaly.

Not much to add..VIX remains low..whilst equities remain broadly very bullish.

more later..on those indexes

Closing Brief

The US equity market closed moderately higher, with the sp +11pts @ 1837. The two leaders - Trans/R2K, settled higher by 0.7% and 0.9% respectively. Near term outlook is for a weekly close in the sp'1850s, with further upside next week, into the 1860/80 zone.



*price structure is a baby bull flag on the hourly cycle

Today felt exceedingly...difficult...although at least Mr Market was acting..as I had expected.

Right now, I don't think we'll be <1800 until the summer. Go dwell on that thought for a few hours.

the usual bits and pieces across the evening.

3pm update - closing hour jump?

The market has seen the smaller 5/15min cycles floor in the sp'1834s, and there is now clear upside into the close, with a daily close in the 1840s still viable. Metals remain weak (as usual), Gold -$8. VIX looks set to melt lower into the close, perhaps settling in the upper 12s.



*a daily close >1841 would be very bullish for tomorrow, and indeed..rest of the week.

Not much else to add right now.

FOMC mins' due tomorrow, and that might even be enough to kick the market into the 1850s...no doubt bemusing all those still shorting the market. Urghh

Notable weakness... TWTR and NFLX, both -6%

3.23pm..the question is not so much how will the market fall, but...why wouldn't the market just keep on rising?

sp'1838...just another 3pts to set up tomorrow...and the rest of the week.

STX +3.6%...and looking strong

3.38pm...market in melt mode...with a micro snap higher within the next 5-10mins....awaiting the 1840s.

2pm update - kooky spikes

The main indexes are holding moderate gains, with the sp'500 looking set for a daily close in the low 1840s. VIX is naturally weak, -3.8% in the low 13s. Metals are weak, Gold -$10, Silver -1.8%

NYSE, daily


*In addition to the weird VIX action early this morning, I just noticed another kooky spike - or whatever  you want to call it, this time on the NYSE comp.

For those that read my weekend reports (you get a prize if you read every word)...the NYSE just printed a spike print in the low 11000s, which is my upside target for the late spring - along with sp'1950/2050.

Are the algo-bots trying to tell us something?

Meanwhile...RIG is trying to make a break for it.

Yours truly..has already been gods damn patient with that one. I remain seeking an exit in the 52/54 zone.

Notable weakness in the coal miners, with some of them breaking key support.

2.14pm.. Ford in trouble...bear flag...

headed for the low 14s..

2.20pm.. Anyone getting overly excited about the little down wave?  Market should hold around 1833/32..old resistance..now support.

Regardless, bears had their chance for 1820/18 yesterday/early today..and couldn't even manage that.

1pm update - afternoon consolidation

The main indexes are continuing to hold the gains - whilst the smaller 5/15min cycles reset for a likely closing hour ramp. Metals remain weak, Gold -$9. Notable weakness in NFLX, in danger of breaking a particularly long duration up channel.

NFLX, daily



We have a clear baby bull flag on the Dow daily chart...upside to the 16700s, with the monthly charts offering 16900/17100 this month.

As for NFLX, a break <335 would break the channel, and open up a test of the 200 day MA, by mid Feb, which will then be around $290/300 - a natural support zone. So..there is 10% downside, not that I would ever short a momo stock.

Notable strength: DRYS and STX, both +3%

12pm update - tired of the lunatic bearish talk

The market is holding moderate gains, with the dow set for a daily close in the 16500s. The bigger weekly cycle is offering 16700s in the immediate term, which would equate to sp'1850s. Metals remain below old broken support, with Gold -$12

Dow, weekly


Maybe its the moon, or the cold, or something, but I'm really tired of the lunatic talk out there..more than ever.

So many of the bears were getting excited about the 1750s, really? Just how the hell are we going to get under 1810/00, never mind down to 1750?

Bears have ZERO downside power, but hey, the running joke continues to be, none of the bears seem to be able to grasp this.

RIG, is vainly attempting to rally after opening weak.

Still stuck in what is a pretty clear bull flag...upside target remains 53/54

Notable weakness in NFLX and TWTR, both -4% or so.

VIX update from Mr T.

back later.

11am update - breaking back into the 1840s

The market is holding moderate gains of around 0.7%, and we've already broken back into the sp'1840s. Metals remain weak, Gold -$11. VIX reflects a market with zero concern for the coming earnings season, -4.5%, in the 12.90s.



There really isn't much to add.

The broader up trend is simply reasserting itself, and all those touting for the mid 1700s are going to sink back into the holes from whence they came.

I'm way tired of hearing such nonsense talk, from people who refuse to acknowledge basic issues such as world capital flows.

The fact today is seeing a $2-3bn dose of QE is certainly going to help rub salt into the wounds of those dumb bears today.

Notable strength in STX

Headed for triple digits..eventually. Go read the balance sheet.

10am update - down trend broken

Good morning. The market again opens higher, but this time the gains look likely to hold, and build across the day. We have a break of the down trend, and equity bulls should be seeking a daily close in the sp'1840s. Metals are weak, Gold -$10.



*Yeah, I've been missing my pre-market posts lately, oh well..

Anyway, we are higher..and with the recent down trend broken, the 1840s look viable today.

VIX has flashed lower to 12.16..hmm

Notable strength: DRYS, +2.5%

Weakness: NFLX -5%...although I've no idea why. Do I need to check clown finance TV ?

10.15am..index gains holding, and bears should be real worried now. Even the sp'1900s are viable if market likes earnings across the next few weeks.

I'm still seeking a minor top in the 1860/80 zone though.

Awaiting new equity highs

A third day of weak minor chop for the US equity markets, and indeed, such price action does nothing to dent the bigger up trends. A weekly close in the sp'1850s looks viable, with the 1860/80 zone viable before end January.

sp'weekly8 - mid term bullish outlook

sp'weekly'4 - hyper- bullish outlook


The point I would like to emphasise with the weekly'8 chart, is that if you consider we are now due a sub'4 wave, then we should be seeking similar price action to last Aug/Sept - aka, no more than 55/65pts downside in late Jan/early Feb.

If we can manage to hit 1855/65 within the next few weeks, I'd have to guess, the sp'1810/00 zone will hold as support in the next down wave.

From there...easy upside into the 1900s by late spring. The only remaining issue is whether the big 2000 threshold will be hit before we see a grander giant wave'3 top (or however you want to name it), somewhere in the 1950/2050 zone.

From there..if the bears are lucky, we'll see an unexpected (at least to the cheer leaders on clown finance TV) 2-4 month wave lower.

Looking ahead

There isn't much due tomorrow. Just intl. trade data, along with two of the lesser Fed officials.

*Tuesday will see the first sig' QE-pomo of the year, around $2-3bn.

Goodnight from London

Daily Index Cycle update

The market saw a day of minor chop, with the sp -4pts @ 1826. The two leaders - Trans/R2K, settled -1.3% and -0.8% respectively. Near term outlook is for the market to resume the up trend, with a weekly close in the sp'1850s now viable.





The third consecutive fall for the US indexes, but price action is very much still very strong. At best, the bears are able to manage declines of 0.25-0.75% in the main indexes, and around 1% in the more volatility Trans/R2K.

The broader up trend very much continues, and sp'1810/00 is now the first real support zone.

a little more later...