Thursday 27 February 2014

Volatility melts lower

With the US equity indexes clawing a little higher, the VIX naturally melted lower, settling -2.2% @ 14.04. Near term outlook is for the VIX to remain within a tight 15/12 zone until mid/late March. The big 20 threshold looks unlikely to be re-taken until April at the earliest.



Little to add. Market remains very comfortable, with virtually no concern about anything right now.

VIX 20s certainly look unlikely until at least April.

more later..on the indexes

Closing Brief

US indexes closed moderately higher, with the sp' +9pts @ 1854, a new historic daily close. The two leaders - Trans/R2K, settled higher by 0.6% and 0.5% respectively. Near term outlook is for continued broad upside across most of March, to the 1880/1920 zone.



Finally, an important daily close in the sp'1850s, but anyone really surprised?

Just go look at any the monthly index charts.

Aside from that, there is little to add that I've not already noted a thousand times.

the usual bits and pieces across the evening....

3pm update - battle continues at 1850

US indexes continue to see underlying upside pressure, but once again, there is clear resistance against a daily close in the sp'1850s. However, with the R2K and Nasdaq already well above the equivalent level, equity bulls are still broadly in control.



So.. to close above..or below sp'1850 ...THAT is the question.

Tough to call..not least now that we have conflicting cycles.  5/15min are somewhat bearish into the close, whilst everything else is generally still pushing upward.

Considering the complete lack of downside power, I guess you could say 'bulls still have the ball..but its 3rd and 6'.

*back to the 50th attempt to use an old scanner to work in win'7.

I'm not feeling so bullish MSFT right now... urghhhhhhhhhhh

3.23pm..  sp'1853.... its starting to look like today will be a rather important close, although as I'll keep stating..other indexes are ALREADY well above these levels.

3.35pm... holding the low 1850s. It remains a bit iffy, but we sure aren't seeing any downside power from the bears.

Here is a thought for the bears.... February looks set to close with most indexes gaining 4-5%.

2pm update - grinding higher

With the bears having no real downside power - and unable to even break <sp'1840, the market bulls remain in control, and we're grinding (if very slowly) the upside. A daily close in the 1850s will open up the 1880/1920 target zone in March.



Little to add. I need to do some scanning...

back at 3pm

1pm update - bands are getting tight

US indexes are holding moderate gains, with the sp' continuing to flirt with the sp'1850 threshold. This increasingly tight trading range is going to break sooner or later. The bigger weekly/monthly charts continue to suggest it will be to the upside.



Look at the upper/lower bollinger bands on the hourly at 1841/53..a mere 12pts.. that is a range of just 0.6%.

Price action continues to favour the bulls. The bears are simply NOT showing any downside power.

*we do have a broad array of econ-data tomorrow, although there is no sig' QE to help the bull maniacs.

Notable movers: Arch Coal (ACI) +5.5%, indeed, the rest of the coal miners are all significantly higher, with prime miner, BTU +2.4%

1.30pm..the underlying upside pressure again starting to show...sp'1852.

Any daily close in the 1850s should open the door wide open to 1880/90 by end of next week..which might make for a sub'3 peak...

regardless..we ain't headed lower.

1.37pm... VIX slips into the 13s.... with sp'1853.

Bears getting ground into dust..with the 1860s not far away now!

Daily charts are offering 1880 in the IMMEDIATE term..and that looks set to climb to 1900s in early March.

12pm update - equities clawing higher

Whilst the Yellen continues to talk to the US senators, the equity market is very slowly clawing upward. Considering the sig' QE-pomo this morning, the bulls are somewhat struggling. Metals are holding minor gains, Gold +$3.



So...we're higher, but not by much, but then, neither were the equity bears able to even break <1840.

It is somewhat of a stalemate, although the bigger weekly/monthly cycles are clearly still bullish.

Notable mover... JCP, doubt, a hyper-short squeeze.

The broader trend though remains lousy. The 'concrete' retailers like JCP and SHLD both face huge incessant competition from the online retailers. Does anyone really think either will still be around after the next recession?

VIX update from Mr T

time for tea :)

11am update - on the way up

Opening minor equity chop, and with the soft floor of sp'1840 holding, we're now on the way up. It'd seem likely that we will finally get a daily close in the 1850s, not that it is 'critical'. Metals are slowly building gains, Gold +$5, with Silver +0.5%



So.. again, a case of opening minor chop, bears failing to break lower. There just isn't any downside power.

Considering the QE today, bulls really ought to attain a close in the sp'1850s.

Notable weakness: RIG, post earnings

I did notice one poster note the ultra long term support floor is in the low 20s. That of course is a further 50% lower..which is frankly a bizarre thought. Regardless..having failed to hold $47 some weeks ago, this is a busted stock.

I'm still a major fan of the Oil/Gas sector, but right is completely unloved by Mr Market. If the broader market gets whacked lower this summer, then RIG..along with the others..will be considerably lower.

back to the Yellen....

10am update - here comes the money printer

After being postponed, here comes the Fed chair..the Yellen, set to address the US Senate..and this could last for much of the day. Meanwhile, US indexes are seeing continued minor chop. Metals are picking up gains, Gold +$2



*I highlight the daily chart...notice the bollinger bands..they are now catching up to the recent rally.

Upper bol' has now broken upward to 1879...and we could be in the 1880s by end of next week. Meanwhile..we have lower support now in the 1740s - which is also where the weekly cycles offer initial support.

Well..I'm going to have an early lunch...and its time to see what the worlds CEO of print central has to say...

For those who want to watch uninterrupted coverage...

see: C-span

stay tuned!
- still flirting with 1840..but like yesterday..the smaller 5/15min cycles do NOT favour the bears. There just isn't much downside power.

10.05am.. major threat of ramp.....with 1840 holding.

see C-span'3..for LIVE coverage!

10.23am.. well, we're 10mins into the Yellen chatter..and market still holding 1840.

Barring Russian bombers over Kiev this evening, we'll surely battle higher from here.

10.27am...micro 5/15min cycles..turning up.....bears on the run now.

A daily close in the 1860s is viable...ALL index cycles are setup for upside.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -6pts , we're set to open around 1839. Precious metals are a touch higher, Gold +$1. Mr Market will doubtless be curious to hear what Fed chair Yellen has to say to the US Senate. With rather heavy QE of $3-4bn, bears face major problems.



*awaiting jobs, and durable goods orders data (due 8.30am)

So..early minor equity weakness, but it is not significant.

First soft support is the 1840 floor. If that does fail at the open, there is viable downside to 1830/25 zone.

On no basis though, can I see the market breaking <1800 for another few months. Price action continues to be very much in favour of the bulls

Notable movers

TSLA +3.9% @ $263 (yeah...up again, huh)
RIG +1.6% - on earnings, which frankly, weren't that good

8.31am... econ-data comes in somewhat mediocre..nothing particularly terrible..or great.

Market trying to rally back... sp -3pts... takes us back to 1842.

8.46am.. the turn continues.... sp -1pt....back to 1844.    Metals picking up, Gold +$4

9.24am.. market set to open -3/4pts... so..bears have a bonus chance to break <1840.

All things considered...I don't think they can do it.

9.37am.. opening reversal.... 1840... holds..yet again.

awaiting the Yellen..due around 10am.......

Awaiting the Yellen

It has been a rather muted week so far for US equities, trading in a narrow sp'1858-1836 range - just over 1%. Mr Market now awaits another few hours of Fedspeak from Fed chair...the Yellen. Considering the broader weekly/monthly index cycles, the up trend will surely continue.



We have 3 green candles on the weekly 'rainbow' chart, and despite the price chop, we're still net higher by around 0.5% this week. With the hourly chart offering upside for the remainder of the week, there is real opportunity for the equity bulls to close the week on a new high... somewhere in the 1860/70s.

Looking ahead

We have the usual jobs data, and durable goods orders. However, tomorrow will largely be all about the Yellen, who is due to speak to the US senate around 10am..and might continue for much of the day.

*there is rather sig' QE-pomo of $3-4bn...bears beware!

Video update from Mr C.

Oscar's ES target of 1986 really isn't that much higher than current levels, we're only talking about another 7% or so. I suppose some could argue it'll be hit after the next major low in the summer, although I realise he is arguing that the market will more likely just keep rising from where we are now, for another 3-6 months.

My best guess for this summer is for something like the action seen in 1998, this time, perhaps motivated by an Asian conflict.

Of course, unlike 1998, this time we will have the Fed ready to spool up the printers on any market upset. Oh well, we'll soon find out.

Goodnight from London

Daily Index Cycle update

The US indexes closed somewhat mixed, sp' +0.1pts @ 1845. The two leaders - Trans/R2K, settled -0.2% and +0.6% respectively. Near term outlook is for further upside to the sp'1860/70s within 2-5 trading days. VIX continues to reflect a largely fearless market.





Most notable aspect of today, the R2K, which was earlier +1.2%, at a new historic high of 1188.

Other than that, not much needs to be said. The broader up trend continues, as better reflected on the weekly/monthly charts.

Closing update from Riley

a little more later...