Wednesday 22 January 2014

Volatility remains exceptionally low

With the main US equity indexes seeing continued minor chop, the VIX is similarly trundling around in a rather tight trading range of 14/11. The VIX closed -0.2% @ 12.84. VIX looks set to remain under the big 20 threshold for another few months.



There is literally...nothing to add.

more later..on the indexes

Closing Brief

The main indexes saw mixed chop across the day, but with underlying strength still pretty clear, sp +1pt @ 1844.  The two leaders - Trans/R2K, again broke new historic highs, settling higher by 1.0% and 0.5% respectively. Upside into the FOMC remains the outlook.



*earnings due at the close: EBAY, NFLX, both will be interesting to watch

So...another day of price chop, although the two leaders - Trans/R2K, broke new historic highs.

Nothing has changed in the broader outlook, and daily MACD cycles look floored, We're due a good 3-5 days higher..possibly more if the market can cope with the next FOMC announcement.

more later...on the VIX


NFLX earnings...pretty good, stock snaps...+$60 to the $390s

NFLX shorts..getting nuked

4.24pm....EBAY....similarly snaps to the upside.. +10% in the low $60s.

I wonder how many bears were short both NFLX and EBAY ?  What a thought, urghhhh!

3pm update - chop into the close

The US market is likely to see continued minor chop into the close. Primary support in the immediate term remains sp'1815, but we seem to be holding the 1840s pretty well. Upside into the 1860/80 zone looks very probable by the next FOMC of Jan'29



There really isn't anything much to add.

Certainly, the bears have nothing to get hopeful about, since we broke new historic highs in the Trans/R2K earlier today.

VIX is merely in trundle mode, stuck in a tight 14/11 range. The 20s sure don't look likely for some very considerable time..perhaps even some months.

Stock of the day...UAL, +2.2% in the low $49s.

3.27pm...Underlying strength..clearly there.  

Earnings at the close ... EBAY, NFLX... the latter of which will probably snap sharply....

Downside to 300/280...or upside to 360/ is a damn tricky one to guess. Good for entertainment purposes though...

back at the close...on what has been a somewhat tiresome day.

2pm update - afternoon chop

The minor chop - that has been the case for over three trading weeks, continues. Yet...the underlying strength is there, and we have seen new historic highs in the Trans/R2K again today. Metals remain weak, Gold -$2, whilst Oil is holding strong gains of 1.6%



This is week'4 of sideways chop, in a rather tight trading zone of sp'1850/1815.. a mere 35pts..which isn't even 2%.

As many recognise, this is mere consolidation across time..rather than price.

*notable strength, with UAL breaking to $49, daily charts offering 50/51 in the remainder of the week.

1pm update - equity bulls need Dow 16500s

US equities remain in minor chop mode, but the underlying upward pressure is pretty clear. Bulls need to hold the 16200/175 zone, whilst a daily close in the 16500s, will open up 16700/900. The 17000s look unlikely until the late spring, but did UAL >$48.

Dow, daily


Without getting lost in the minor noise, the primary upward trends are still holding.

Only with a break <16175 can the equity bears  have any hope of sig' downside, and frankly, there doesn't look to be a hope in hell of that.

For those looking, there are plenty of strong aspects out there...

AAPL, TSLA, and most notably...UAL, +1.5% @ $48.64

UAL, daily

Upper bol' on the daily, is offering the $51s by end week

12pm update - market holding together

With almost $3bn of QE-pomo to help, the market is holding together, comfortably above the Tuesday low of sp'1832. Equity bulls should be able to push the market into the 1850s later today/early Thursday. Metals remain weak, Gold -$1, whilst Oil is significantly higher by 1.4%


USO, weekly


So, we're holding the sp'1840s...and the underlying strength is there for everyone to see. Are any of the bears still clamouring for sub 1800s ? Frankly I've no idea, I've stopped reading anywhere else for the past day or two.

*Oil sure looks on the verge of a major breakout. If USO can close in the 35s this week..or next, it bodes for $100 oil again...this spring. Market/economy should be able to cope with $110/ least for a while.

Strength: AAPL, TSLA, UAL.

FB seems to be merely cooling down for a day or two, but remains within an up trend.

time for tea :)

12.07pm.. live on CNBC, from the Davos conference, its none other than Japan's Abe, Mr 'I'll print my country out of all its problems'

I'd love to hear him talk about just how his country is going to manage with the population set to collapse from 120m to 75 million in the next 30/40 yrs.   Game over Japan.... game over. Its way too late for them to start having babies.

11am update - UAL breaks the 2007 high

Perhaps the most notable stock break through of the year so far, is this mornings gain in United Continental (UAL), breaking the 2007 double top high of $48.25. It bodes very bullish for the broader market into 2015/16. Metals remain weak, Gold -$2

UAL, monthly, 9yr


I really do think it is a key sign for the broader market. Whether or not $50 is hit within the next month or two seems not particularly important.

We have a clear break through for a leading airline, and if the airlines are doing okay..the rest of the market will likely be fine.

As for the main market this morning, minor chop continues, but the underlying strength is there for anyone to see.

Notable strength: AAPL, +1%,  UAL, +1.1%

10am update - minor chop

Minor chop to start the day, although the sp' has come within just 0.4% of breaking a new high. Dow is being held back by IBM (-3.5%), although earnings were arguably 'reasonable'. Metals look weak, whilst Oil is building gains of 0.8%.



A relatively quiet open.

As ever, we'll just have to see how big an effect the latest QE has on the market. Overall though, I simply can't see a break <1815...certainly not before 1860/80.

DRYS, struggling...

DRYS really needs to hold the $3.60/50s, or another 20% will be get knocked off. As ever, that will be largely dependent upon the BDI, which itself is now -40% on the month.

10.13am... probably the most notable event of the year so far...

UAL breaks the 2007 double top of $48.25.

..which is almost 3 months ahead of my target schedule. Now...can it break $50 in the near term?  Anyone calling for $100 in late 2015/early 2016 yet?

10.28pm...the minor index chop continues,but you can see the underlying strength.

AAPL is notably strong, not much, but its a fair sign of the broader market.

Pre-Market Brief

Good morning. Futures are moderately mixed, sp +1pt , we're set to open around 1845, whilst the Dow is  -15pts or so. Metals are set to open fractionally lower, and the summer 2013 lows look set to be broken at some point this year. Notable post earnings weakness in IBM, -4%.



So...minor chop to start the day.

With $2-3bn of QE money due to kick in after 10am, equity bears should be concerned about the market grinding higher into the afternoon. Any daily close in the sp'1850s will most certainly open up the target zone of 1860/80 by next weeks FOMC.

Notable early mover: IBM -4%, which will of course have a very strong effect on the Dow, maybe as much as 50/75pts.

Video update from Oscar

Gold bugs sure won't like what Mr Carboni has to say about the metals, and neither will the equity bears be particularly happy with it.

For me...'stops are (usually) in..emotions are... in', best I can do.
Have a good day..if you can!

Still not learnt anything

A mere five trading days ago the bears were getting overly excited on a broad equity market decline of around -1.4%. Naturally, the market rebounded the next day. What remains utterly bizarre, if not outright lame, is how the same people are still getting lost in hysteria on every 5/10pt intraday fall.



I suppose I could drone on page after page about how those touting an 'imminent market crash' are idiots, but hey, I'll still call them out on least a little.

We have a very clear short term floor of sp'1815, and baring a daily close under that, it is absolutely ludicrous for anyone to be touting even a moderate market decline of 5-7%.

At best, it looks like we might slip 3-4%..but not until after the next FOMC...and even then, that will likely be from higher levels, somewhere in the sp'1860/80 zone. As I will keep noting, I still believe the short-side is untradeable until the late spring.

re: weekly'8. I'm holding to the idea that sub'4 will be no stronger than sub'2 - from Aug'2013.  So, as long as the next cycle peak is at least >1870, then 1810/00 will likely hold as a key floor in February.

Looking ahead

There isn't any key econ-data due until Thursday.

*there is sig' QE-pomo of $2-3bn this Wednesday, bears...beware!

A moody permabear

I'm getting real tired of the nonsense chatter out there. It seems what few of the old school 'doomer bears' that remain continue to have memory problems. A mere week after many got smashed on a strong Tuesday rebound, we saw a moderate, but similar recovery today.

I'm really not sure who I find more idiotic, the bears who are shorting into a primary upward trend, or the bull maniacs who think there is a genuine economic recovery.

Goodnight from London

Daily Index Cycle update

The main indexes saw some mild swings to begin a shortened week, with the sp' closing +5pts @ 1843. The two leaders - Trans/R2K, both settled higher by around 0.6%. Near term outlook is bullish, with a target zone of 1860/80 by the next FOMC of Jan'29.





Arguably the most notable aspect of today were the Transports and the Rus'2000 small cap, both of which broke new historic highs. The Nasdaq Comp' broke a new post 2009 high, but remains around 20% below the March' 2000 tech bubble high of 5132.

The daily cycles are pretty clear, with the broad upward trends still intact. Equity bears need to break <sp'1815..and <dow 16200 to cause some moderate technical damage.

Frankly, that sure doesn't look likely, and we'll more than likely battle higher into next week. The only issue is how the market will handle the next FOMC announcement. A spike high into the 1890s..even the low 1900s is just about possible.

A more conservative upward target however is 1860/80, before a 3-5 week down cycle, no more than 3-4% for most indexes.

a little more later...