Friday 21 February 2014

Volatility a touch lower

Whilst equity indexes saw minor opex chop, the VIX was pretty weak across the day, settling -0.7% @ 14.68. Near term outlook is for the VIX to remain in a tight 15/12 zone. The big 20 threshold looks well out of range until April. Across the week, the VIX gained 8.2%.




Despite the minor weekly gain, the recent trend is one of a market that has essentially no fear. Despite geo-political rumblings in a number of nations this week - not least the Ukraine, the market just doesn't least not yet.

VIX will likely remain <20 until at least early April. What will be interesting is how high it can spike on the next major wave. The VIX high for 2013 was a mere 21.91.. and we've already come close to breaking that.

more later..on the indexes

Closing Brief

US indexes closed somewhat mixed, sp -3pts @ 1836. The two leaders - Trans/R2K, settled +0.8% and +0.2% respectively. The outlook for next week remains broadly bullish, as supported by the bigger weekly/monthly cycles. VIX continues to reflect a market that is essentially fearless.



Certainly, it was not the most exciting of weeks, was kinda dull. Yet...most important, we saw the bears trying to punch the market lower, but only managing some borderline significant weakness for a few hours on Wednesday.

Aside from that, the overall price action remains in favour of the equity bulls. General upside into the next FOMC of March'19 is expected.

Have a good weekend everyone.

more later..on the VIX

3pm update - recovery rally into the close?

US indexes continue to see typical opex chop. With the smaller 5/15 minute cycles pretty much floored, there is a fair chance of a little rally into the close. Certainly though, a weekly close in the sp'1850s is now well out of range. Metals have turned around, Gold +$2



Seen better on the smaller 5/15min cycles, there is a possible inverse H/S setting up. So long as market doesn't go below 1834, bulls really have little to be concerned about.

Despite only being a 4 day week, this week has felt like six.

Notable gainer: UGAZ +6.4%, a powerful weekly gain of 29.6%

3.23pm.. .rallying into the close...yes?

The inv H/S would target 1865/70 next week..which would match up with the near term upside that the weekly charts offer.

3.35pm...continued chop..but with a slight upside bias. Will be interesting to see if we get any 'stupid closing minutes' spike. Certainly, the price action in recent days is very suggestive of it.

3.46pm... chop chop....nothing for the bears to look forward to next week. 3 sig QE-pomos, the Yellen on Thursday, and end month buying?

Notable gains in UGAZ +8.6%

3.55pm..bears getting a chance to exit into the weekend

2pm update - old leader is battling higher

Whilst the headline indexes have moderate gains of around 0.2%, the old leader - Transports, is sporting borderline significant gains 0.9% to conclude the week. On the bigger weekly charts, Trans is offering the fourth consecutive weekly floor spike..which bodes for higher levels in March.

Trans, daily

Trans, weekly


Not much to add..on what is a very typical minor-chop opex.

Notable mover: BKS, +7% on takeover news.

2.34pm.. minor down wave...sp'1837.... could be setting up an INV H/S around 1836/34.

Regardless, this is nothing for of the bears to get excited about.  

1pm update - net weekly gains

Despite the opex chop, and the Wednesday declines, the sp'500 is still set for fractional gains this week. Equity bulls should be able to look forwards into March, the only issue is whether the 1900s are viable. Metals remain a touch weak, Gold -$2



*two fed officials speaking this afternoon, might kick the market around a bit.

Kinda quiet out there.....what else to cover? Hmm

Ohh..there is Gold...

Holding a minor weekly gain, but still...importantly..holding last weeks breakout.

1.23pm.. for those watching the smaller 15/60min cycles, we have a baby bull flag setting up..and price action sure is bullish.

Trans is also breaking higher..almost 1%. 

12pm update - opex chop

US indexes are moderately higher, on what is unquestionably a rather typical opex Friday. Metals have slipped..but just a little, Gold -$3. VIX is merely melting lower, although is still higher by 4% on the week.




*the Fed reading is pretty interesting, - if only as a reminder of how clueless they generally are.
- see earlier post for links

So...a weekly close in the sp'1850s ?

It won't be easy, but regardless, price action is pretty strong, and we'll likely be in the 1865/75 zone, by the end of next week.

Broader picture remains on track.

time for tea :)

11am update - time for some reading

Whilst the US indexes continue to make a play for the sp'1850s, the US federal reserve have released some interesting notes/commentary from the train wreck that was September 2008, now over five long, and... very bizarre, years ago.



Little to add...

Want a little walk down memory lane with the Ben Bernanke and his friends?

see: General Fed Reserve URL: Monetary Policy 2008

PRECISE URL:  FOMC minutes Sept'16 2008

CNBC article: Transcripts detail crisis

10am update - no downside power

Equities open with some minor mixed chop, but the underlying upward pressure remains. Equity bears lack any downside power, and we look to set to break into the 1850s...and keep pushing upward. VIX looks set to melt lower into the weekend.



*awaiting home sales data at 10am

There is little to add.

Arguably, bears should remain on the sidelines, and just let this play out until the next FOMC of March'19th.  Either that, or gods forbid...go long.

notable mover, UAL

...seeing follow through after another breakout

Pre-Market Brief

Good morning. Futures are a little higher, sp +4pts, we're set to open at 1843. Metals are flat. The shortened week has been somewhat of a a mixed mess, but overall..the bulls are still in control, with further upside very likely.



So...we're set to open a little higher, a mere 7pts shy of breaking a new historic high.

Equity bulls should be content with ANY weekly close in the 1840s, never mind the 1850s!

Today is some chop. With 3 sig QE-pomo next week, bulls look set to continue the climb into end month.

Notable early mover: GRPN, -12%, after earnings

9.18am.. sp +6pts, we're set to open just 4pts away from new highs. It looks like we'll be in the mid 1850s this morning, and that opens up 1865/75 in the immediate term.

Meanwhile... UGAZ +5.6%

Another day closer

With equities rebounding across the day, the bears can understandably be disappointed, yet...we are one day closer to putting in a key multi-month high. That still appears very possible around the time of the next FOMC - March'19.



So...the Wednesday declines have been negated, and we're within range of a daily, and more importantly..weekly close in the 1850s. Indeed, weekly charts are offering the 1870s in the immediate term, and that should expand to 1880/90s in early March.

Just look at how powerful the Nasdaq Comp' looks on the monthly cycle...

Nothing bearish there, is there?

Looking ahead

We have some housing data to conclude the week. Perhaps more importantly, there are two fed officials on the loose - Fisher and Bullard, and Mr Market will likely be waiting to hear what they have to say.

*next Sig'QE is not until next Monday, and bears should be concerned that next week has 3 sig' QE-pomo days.

Goodnight from London

Daily Index Cycle update

US indexes battled higher after a brief early morning dip, with the sp' climbing from 1824, to settle +11pts @ 1839. The two leaders - Trans/R2K, closed higher by 1.6% and 1.1% respectively. Near term outlook is for the sp' to rally into the 1880/1920 zone by mid/late March.





The gains in the two leading indexes is particularly bullish, and bodes for sp' breaking into the 1850s within the next trading day or two. Broader upside to 1865/75 seems viable before end month, and then 1880/1920 in the latter half of March.

Recent price action is pretty bullish, with the bigger weekly/monthly charts offering new highs in March. Even the low sp'1900s look possible before this all wraps up.

Closing update from Mr TopStep

a little more later...