Monday, 24 February 2014

Volatility still melting lower

With equities closing with moderate gains, the VIX naturally melted lower, settling -3.1% @ 14.23, with an intraday floor of 13.97. Near term outlook is for the VIX to remain within the 15/12 zone. VIX 20s still look unlikely until April.




There really isn't anything much to add.

So long as equities continue to broadly climb, the VIX will remain in the low teens. The big 20 threshold doesn't look likely until April.

more later..on those bullish indexes

Closing Brief

US indexes closed with moderate gains, sp +11pts @ 1847. The two leaders - Trans/R2K, settled higher by 0.4% and 0.9% respectively. Near term outlook is bullish into March, with a broader upside target zone of 1880/1920 by the next FOMC.



*closing hour weakness, but overall, just a natural retracement

I certainly do NOT think the daily close under 1850 is an issue. After all, we did not close net lower on the day. How could the bears claim anything from today's action?

Despite the gains, a relatively quiet day in market land, and I'll leave it at that.

the usual bits and pieces to wrap up the day, across the evening...

3pm update - a close in the 1850s

The sp'500 looks set for a historic close in the 1850s. The two leaders - Trans/R2K, are similarly higher, and will probably be breaking new highs in the near term. Metals continue to hold sig' gains of around 1%. VIX is merely melting lower in the 14.25/13.75 zone.



*the hourly charts are offering a baby bull flag, with upside into the 1865/70 zone by Wednesday.

Just another day for the bull maniacs. Tomorrow will likely be much the same.

Notable weakness: UGAZ -18%... intraday low -27% or so, which is one hell of a swing from pre-market gains of +7%.

3.15pm.. a micro pull probably just wants to re-test the old 1850 high..before the next wave into the 1860/70s.

Absolutely no reason why any bear should be getting even marginally excited about the last few hours. VIX is telling the story...a fearless market.

3.33pm.. market testing the 1850 area...fractional break to 1849, not that it matters. can see how 1850 is again a key level. Regardless of the exact close..we didn't close lower, did we?   back at the close.

2pm update - holding the gains

Mr Market is comfortably holding the bulk of the gains, with a daily historic close likely in the sp'1850s. With further sig' QE tomorrow, and Thursday, equity bears haven't a hope. Metals holding gains, Gold +$14. VIX is merely melting lower, having now slipped into the upper 13s.



The style of price action has been telling the story for the past few weeks. There continues to be an inexorable push to the upside, helped by significant (if somewhat less) doses of QE fuel.

With each QE taper..the pressure increases on the bull maniacs. Even this market is going to be subject to a correction at some point.

notable strength; FB +3.8% in the $71s.

Anyone still doubt that nonsense hysteria stock won't be in the 100s next year?

1pm update - something big on the horizon

US indexes continue to hold significant gains, with the sp'500 set to battle into the 1860s this afternoon..or tomorrow. The two leaders - Trans/R2K, are similarly due to break new historic highs in the days ahead. Metals holding gains, Gold +$12

sp'weekly7c - best 'bear case' scenario


The above chart is unquestionably the most bearish outlook I dare throw out there.

Unlike 2013, we do have a difference this time..with QE being tapered. So long as the Fed don't 'taper the taper' at the next FOMC of March'19th, I think the above scenario has a chance. However, even if the market maxes out, and rolls over in late March, we won't have any initial indication of this bigger bearish scenario until late April at the very earliest.

Anyway, its just an idea..and as day at a time.

As for the post title....

Ghostbuster 'Egon'..aka.. Harold Ramis has died.  see: Chicago Tribune. Not so much my favourite actor, but he certainly was a massive creative influence for many of my favourite movies.

No doubt the 'dogs and cats living together...mass hysteria' moment will also be highlighted by many today.

1.30pm.. market holding the gains..and VIX finally breaks into the 13s.

I'd guess 12s are coming, 11s will be tough to hit though.

Arguably...VIX March good...not enough time. As it is, I do not intend to trade the VIX in the first wave lower in April.

more on that later though...

12pm update - the pomo can only be helping

US equities continue to build gains, with the sp' decisively in new territory, and there is no doubt today's QE-pomo of $2-3bn is helping give an extra kick. Metals are similarly higher, with Gold +$14.  VIX is merely melting lower, with a daily close likely in the 13s.


R2K, daily


*I highlight the R2K, since its also about to break new historic highs. Trans, will surely follow later this week.

What else to say?

Well, we're simply on track. A key high around the next FOMC remains the target.

VIX update from Mr T.

time for tea.

12.08pm...lots of chatter about Nat' that it for the winter?

UGAZ -13%...which is a severe swing from earlier 7% gains.

11am update - new highs

The opening minor gains have quickly built into somewhat significant gains, with the sp'500 decisively breaking into new historic territory. Further upside is expected, with a target zone of 1880/1920 around the next FOMC of March'19. Metals are also building gains, Gold +$13


GLD, daily


*I have little interest in the minor cycles today. I might stick with the bigger charts for rest of the day.

The break above 1850 is decisive, there is no question about the break.

Even Cashin on clown finance TV just now was talking about 'wanting to see 1852'...which would secure upside for rest of the week...and I agree with that.

Upside into end month..and March is usually a strong month too.

Transports +1.0%..almost in the 7400s...a good sign for the equity bulls. Maybe a weekly close in the 7500s.

10am update - making a play for new highs

US indexes open moderately higher, and we're on the edge of breaking new historic territory for the sp'500. Metals are continuing to climb, Gold +$8. VIX is -3%, and seemingly about to lose the 14s.




*note the lower weekly bol', now in the 1740s...and by end March, we'll have a key support floor of 1800.

..standing by for 1850..and beyond.

Simply put, there just doesn't seem to be ANY downside power right now.

9.54am.. NEW historic intraday high on the sp'500
** highs..and chart weekly'8 is STILL on track.  Another few green candles..and then the big turn.


10.10am.. big swing in UGAZ, from +7% in pre-market to -8% right now. Hmm 

Pre-Market Brief

Good morning. Futures are moderately higher, sp +4pts, we're set to open at 1840. Metals are higher, Gold +$8, with Silver +1.0%. The coming week will likely be in favour of the bulls, with a break >sp'1850 very viable.



Just about everything is setup in the equity bulls favour this week.

We have sig' QE-pomo today, tomorrow, and Thursday, The bigger weekly/monthly trends remain bullish.

Equity bulls should merely seek a weekly close >1850. That will suffice for end February, and set up new highs across March.

Notable early mover: UGAZ +7%,   GDX doubt being helped by further gains in Gold.

*something to watch at the open, weekly charts, lower bollinger, should jump into the 1740s, and thus conclusively ruling out a break of the recent 1737 low for some weeks, if not a few months. Indeed, by end March, we'll have a primary support floor around the 1800 level.

9.33am.. and we're off and running... sp'1840s...

Lower weekly bol..jumps to 1743...

Sure doesn't look to be any downside power.