Wednesday 12 February 2014

Volatility trying to stabilise

With equities seeing increasing weakness across the day, the VIX turned briefly positive, but still settled lower by -1.5% @ 14.30. There looks to be viable upside to the 16.50/17.00 zone, before the equity market resumes the broader up trend.




The fifth consecutive daily decline for the VIX, but clearly, the bulk of the decline - from the 21s, is already done.

VIX did break a marginally lower low of 14.02, but is showing some potential to climb across the next few days. Best case for the equity bears is sp'1800/1780, which should equate to VIX in the 16.50/17.00 zone.

more later..on the indexes

Closing Brief

US equities broke a new high in the early morning (sp'1823), but saw increasing weakness into the late afternoon, sp -0.5pts @ 1819. The two leaders - Trans/R2K, settled higher by 0.1% and 0.3% respectively. Near term outlook is for a minor retracement to the 1800/1780 zone.



*moderate weakness into the close.

Awaiting earnings from CSCO

So.. we did break a new cycle high of 1826, but that now looks like a near term top, at least for the remainder of this week


more later...on the VIX

3pm update - weakness into the close

The market has vainly tried to rally, but only managed minor weak chop. Equities look set for weakness into the close, although the 50 day MA of 1809 looks out of reach until tomorrow. With no sig' QE-pomo until next Tuesday..the bears do have a window of opportunity.



*VIX turns positive again, a close in the 15s would be..useful.

Things look on track. Bulls tried to push a new  high, but really, no one wants to buy >1820/21.

Next target is 1810/09....and then the primary zone of 1800/1780..but the longer it takes..the less likely 1780.

3.15pm...minor chop continues, but the VIX is positive, and 1826 looks like it'll hold as a high for the rest of this week.

AMZN continuing to slide...-3.9%

Metals are weakening, and that is not helping the miners, GDX -3.5%..reversing all of the Tuesday gains.

3.40pm...minor weak chop.....with the inclination to the downside. A close at the low would bode for an especially weak Thursday (despite part'2 of Yellen).

3.45pm...clown finance TV now saying the US senate hearing with Yellen is postponed, probably for a few weeks.

sp' back to flat...a Doji candle on the daily? 

2pm update - continued churn

The market continues to churn, as bears are so far unable to knock the market more than 0.3% lower. Gold and Oil are holding moderate gains of 0.3% and 0.5% respectively, although the latter is almost 1% below the earlier high.


TWTR, daily


*as for the gains of around 5% in Twitter, I've no idea, but then, its a hysteria stock, does it need a reason?

For the bears out there, 1825/30 is the obvious short-stop zone. I'm still holding to the original outlook..seeking downside into Friday.

Considering the 89pt ramp..we are unquestionably due a pull back, even if its just 1.5-2.0%.

AMZN remains weak, -3.2%
GDX -1.8%, failing to benefit from the higher Gold price today.

2.35pm.. Price action remains muted, but...the weakness is there. 

1pm update - minor weak chop

Equity bulls have attempted to stall the decline, and we're seeing some weak minor chop  A break above the morning high of 1826 looks very unlikely for some days, and there should (in theory) be increasing downside pressure into the close. Metals are clawing higher, Gold +$6


GLD, daily


*the action in Gold is somewhat bearish for equities, although it is not helping the mining stocks today, with GDX -1% or so.

Still 3 hrs to go, lets see if we can get the first test of the 50 day MA..1809.

Notable weakness; AMZN -3.5%. I'm not sure why that is particularly weak today, but the PE of 10 million can't be helping.

12pm update - weakness into the afternoon

Equities appear to have a short term cycle peak of sp'1826, with a VIX low of 14.02. Hourly index/VIX cycles continue to support the notion of a minor retracement, down to 1800/1780 - with a VIX of 16.50/17.00 by Friday.




Well, things look reasonable for increasing weakness into the late afternoon. What will be interesting is what sort of micro bounce we get sometime tomorrow.

Primary downside target of 1800/1780 will be increasingly difficult...the longer it takes the bears to push this nonsense lower.

VIX update from Mr T.

time for tea

11am update - rainbows, but no unicorns

The US equity indexes opened moderately higher, but the gains have indeed evaporated. Hourly index/VIX cycles are highly suggestive we're now in the early stage of a minor retracement. Primary downside target zone is sp'1800/1780 by late Friday.

The storm front passes through London city


So..we have an 89pt ramp from 1737 to 1826..and now we're on the slide.

With no sig' QE-pomo until next Tuesday, bears have a window of opportunity, if only for a minor retracement of 2% or so.

notable movers: AMZN -3.8%, whilst TWTR +5.0%

*if I see any unicorns before sundown, I'll be sure to take another picture.

11.23am.. bulls battling to hold things together, but hourly cycles support the bears..into the afternoon.

First downside target..the 50 day MA..of 1809.

10am update - seeking a rollover

US indexes open a touch higher, but the hourly index/VIX cycles look highly vulnerable to a minor retracement into the afternoon. Metals are fractionally lower, whilst there is significant strength in Oil, +1.3%.




We have an Interesting day ahead...

I'm most certainly seeking a rollover, down to sp'1810 by late afternoon, but with a bigger downside target of 1800/1790 by Friday.

TWTR +3%,  UGAZ -3%   - clearly everything is back to front this morning.

10.01am.. So...we've pushed 3pts to 1826...enough to trigger a few short-stops...

still seeking a reversal.   VIX battling to hold 14s.. -3.3% @ 14.02. wants to rollover..after a 6 day ramp of 89pts. VIX green by 11am would be a good sign.

10.27am...slipping lower to 1820...but really, I'd like to see 1810 by afternoon, if not 1805.  Sub'1800 does not look viable until late tomorrow/early Friday.

VIX soon to turn green...upside to 16.50/17.00 by Friday..

Pre-Market Brief

Good morning. Futures are a touch lower, sp -2pts, we're set to open at 1817. Metals are fractionally lower. After an 86pt ramp across 5 trading days, Mr Market is due for some degree of minor retracement. Hourly index/VIX charts are suggestive we're already rolling over.




Well, its midweek, and today really doesn't have much due in the way of data.

It does appear we are rolling over - from yesterday's closing hour. Hourly MACD cycle is suggestive of greater downside potential this afternoon. Certainly I'd not be surprised if we close -70/100pts on the Dow.

Best guess....we hit sp'1800/1790, no later than Friday morning, before a latter day recovery into the weekend (next Monday, market is CLOSED)

*London is a pretty stormy city today, more floods, and howling winds. I'm sure the power will keep going, but if I do drop will know why!
Early mover: UGAZ +3%... I guess its still cold.

**no update from Oscar this morning, maybe the Fungus got to him?

9.00am Futures back to flat.   UGAZ has flipped to -4%....that sure is a twitchy commodity.

9.35am..we're off and re-testing the 1823 high....hourly MACD cycle STILL rolling over.

Bulls...beware!  I'm looking for a reversal at least 1810 this afternoon. 

9.47am.. bull maniacs getting a chance to exit in the mid 1820s...after 1737..a mere week ago!

Weekly cycles back to outright bullish

With the break back above the 50 day MA of sp'1809, the weekly index cycles - lead by the sp'500, are turning back to outright bullish. There is an opportunity for a minor retracement to 1800/1780, but regardless of that, it looks like new historic highs will be hit in March/April.




A fourth day to the upside, but the hourly index/VIX charts are suggestive we're now due a retracement. Fib levels offer 1790/80 within the remainder of this week.

Looking ahead

There really isn't much tomorrow. There is one fed official on the loose in the morning, the EIA oil report, and the US Treasury budget. None of those are likely to move the market much though.

*there is no sig' QE-pomo until next Tuesday

The Yellen era has begun

As I noted earlier today, we probably have 8 years of Yellen. Whatever you think of her economic views, we're going to have get used to her. Keep in mind that Yellen is due to speak to the US Senate this Thursday, so... there is plenty more of Yellen this week.

After an 86pt (5.0%) ramp from 1737 to 1823 across just 5 trading days, lets see if the bears can manage a push lower in the remainder of this week. Certainly, with no sig' QE, the bears...have a chance.

Goodnight from London

Daily Index Cycle update

The main equity indexes closed with rather significant gains, sp +19pts @ 1819. The two leaders - Trans/R2K, settled higher by 1.1% and 0.9% respectively. Near term outlook offers a minor retracement, before new historic highs are broken.





A fourth consecutive day of very important gains, and the Wednesday low of sp'1737 now looks a very long way down. There looks to be zero chance of breaking that for at least a few months.

The daily close above the 50 day MA arguably 'seals the deal' for the bulls. Yes, there is a likely minor retracement due - maybe a few percent, but generally, we now have a very clear multi-week floor of 1737, and Mr Market looks set for much higher levels..possibly the low sp'1900s by late March/early April.

Closing update from Mr TopStep

a little more later...