Wednesday 5 March 2014

Volatility slightly lower

With equities seeing a day of consolidation, the VIX similarly trundled fractionally higher..and lower across the day, settling -1.5% @ 13.89. Near term outlook is for the VIX to remain in a tight 15/12 zone, into the next FOMC (and VIX opex) of March'19.




*I should note, the hourly chart is largely barren of labels, but then..the price action is very muted, and that will probably remain the case for another 8-10 trading days.

There is little else to add, on what was a very quiet trading day.

more later..on the indexes

Closing Brief

It was a day of consolidation for US equities, with the sp -0.1pts @ 1873, having fractionally broken a new high of 1876.53. The two leaders - Trans/R2K, settled +0.3% and -0.2% respectively.  Near term outlook remains broadly bullish, into the 1880/1920 zone by the next FOMC.



A pretty quiet day, and there really isn't much to add.

I see a few people trying to short the market, trying to trade a minor retracement, but really, that doesn't make any sense to me. Overly risky, not least whilst the big monthly cycle is offering 1930s this month!

more later..on the VIX

3pm update - chop into the close

US indexes are seeing mixed minor chop, with the sp' still holding the low 1870s. The equity bears lack any downside power, and there isn't much hope of even a minor retracement until the jobs data this Friday. Metals are holding minor gains, Gold +$3.



A sleepy day...and from what I see, I'm not the only one out there who is tempted to close down the screen.

However, there are some notable movers out there...

DRYS, UAL, UGAZ...and now FB the $71s.

3.17pm... Oil, -1.9%... I'd not noticed this sig' fall until just being reminded by clown finance TV.

Still looks like we'll get a second daily close in the sp'1870s.

2pm update - time for another fed colouring book

US equities continue to see minor mixed chop, but the sp'500 is still holding the 1870s, with a VIX that earlier broke into the 13.80s. Metals are holding minor gains, Gold +$4. Mr Market is awaiting the latest Fed beige book.



Do you remember the colouring books you'd have as a child? I think the latest fed book will make no more sense than grabbing a red pen, and colouring in a fire engine.

Hourly MACD cycle is ticking lower, and is vulnerable to weakness into the close. Regardless of any minor weakness, primary trend remains strongly to the upside.

A fair few traders are looking for at least a minor retracement, 0.5-0.75%..perhaps the latest beige book will provide Mr Market with an excuse...

Notable strength: DRYS +4.9%, a daily close in the 4s would be highly suggestive of the 5s in the very near term.

2.03pm.. Beige book summary 'weather'

Market indexes creeping higher.

5/15min index cycles prone to minor upside..although the hourly is prone to a bit mixed.

1pm update - Trans battling to catch up

Whilst the headline indexes are seeing minor chop, there is some notable continued strength in the transports, +0.4% or so, having broken into the 7500s again. A new historic high for the Trans (and the Dow) looks likely within the next week or two.

Trans, daily

Trans, weekly2, rainbow


*the weekly 'rainbow' chart should scare the equity bears. We have the first green candle since the start of the year. There is nothing bearish right now, and the recent low in the 7000s looks a fair way down.

*awaiting the fed beige book at 2pm.

However, as noted earlier, with the weekly upper bol around 1875, the bulls face a problem in pushing higher.

Notable strength: DRYS +5.7% in the $4.10s

12pm update - fractional new highs

Equities continue to see minor mixed chop, but we have fractionally broken new highs for the sp'500 and the Nasdaq. Metals are holding moderate gains, Gold +$4. VIX is back to flat. Shipping stocks are showing notable strength, with DRYS +5% or so, back in the $4s.



*I thought I'd highlight the weekly, since this is currently one primary reason why we are stuck.

Whilst the daily chart is offering the mid 1890s, and the hourly the 1880s, the weekly is already currently maxed out.

A weekly close in the 1875/85 zone appears most likely, with 1890/1900s next week.

VIX update from Mr T

time for tea!

11am update - morning chop

US equities are seeing continued minor chop, after somewhat weak ADP jobs, and ISM data. The market has very strong underlying upside price momentum though, and we look set for the sp'1900s within a week or two. Metals are holding slight gains, Gold +$3.



Not much to add.

However you want to count it (if you even do)...we sure ain't trending lower.

It would seem absolute madness to attempt any shorts right now. Retracements..if at all, remain so to be untradeable in my view.

Notable strength in DRYS, UAL.

Morning 'doom' from Williams

I like Williams of shadowstats, but..he is still overly doomy. 

Why would Russia want to intentionally attempt to kick the USD <70 ? Its like those who think Russia will switch off the Nat gas tap to the EU, only to result in them losing a core export/trade.

For the moment...the hyper-inflationists (inc' Schiff), should just shut up, after touting this nonsense since 2005.

Until money velocity starts rising, there is no reason to expect any sig' inflation.

11.03am...and here comes a new historic high on the sp'500.

Trans is trying to lead...with gains of 0.4%.

10am update - price action remains bullish

Equities open with some very minor chop, but we look set to build further gains. The hourly index cycle is offering the sp'1883/86 zone today. Perhaps more notable, the daily cycle is offering the mid 1990s. With sig QE-pomo this morning, bears face the usual problems.



To use an 'oscarism'..we have an F flag on the hourly, and it is most certainly bullish.

With the bigger weekly/monthly cycles all pushing higher...we'll surely see higher levels.

*fed beige book due at 2pm..that will probably give the market a kick.
Notable mover...

DRYS, daily

The break back into the 4s opens up the 5s in the immediate term. DRYS remains one of the old school hysteria stocks, it certainly still manages to attract attention when it does start to move.

10.07am.. ISM data...not great...but market doesn't care.

Price action is bullish! ...and hey...there is the QE..that is going to help today.

Notable strength: UAL +4.5%... I've no idea why..but the general trend is upward of course.

Pre-Market Brief

Good morning. Futures are slightly higher, sp +2pts, we're set to open around 1875. Metals are a touch higher, whilst Oil is moderately lower, -0.4%. Equity bulls look set for another set of new index highs, with the Dow/Trans to follow.



*ADP: 139k net gains, vs 160k expected. So..its a miss, but the number is still arguably 'reasonable', and should be enough for the market to cope with.

So..we look set to break index highs this morning, and the 1880s are well within range today.

With sig QE-pomo, the bulls should be fine today. The only minor excuse for a late sell down is if market does not like the Fed beige book.

Regardless, we're broadly continuing higher, and I expect that to continue all the way into the next FOMC of March'19.

T-10 days to go.

Notable early mover: DRYS +3.6% @ $4.02. The break over the $4 threshold is pretty significant, and does open up the 5s within the immediate term. Whether we can close the week in the 4s will be very important.

Powerfully strong market

It remains a powerfully strong market, but this should come as no surprise to those keeping a broader perspective - via the bigger weekly/monthly index cycles. Market looks set for another 2-3% higher by the next FOMC of March'19. What happens then...could be real interesting.



There really isn't much to add.

We have the fourth consecutive green candle on the weekly 'rainbow' chart, and this market unquestionably remains  .outright bullish.

If the recent down wave - to sp'1737 was a sub'4, then my best guess is that we'll get stuck somewhere in the 1890/1910 area. Monthly charts will be offering 1930/40 by late March, but weekly charts do not support a move that high.


Regardless of how you might want to count the cycle-waves of the past few months, the trend is clearly still to the upside.

Looking ahead

We have quite a busy Wednesday ahead. PMI, ADP jobs, ISM non-manu'.

Probably most important, the Fed beige book. If the market can spin the latest fedspeak as positive 'green shoots of spring' for instance, we'll surely continue to grind higher.

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

Goodnight from London

Daily Index Cycle update

US equity indexes closed with very strong gains, sp +28pts @ 1873 (intraday peak 1876). The two leaders - Trans/R2K, saw powerful gains of 2.2% and 2.7% respectively. Near term outlook remains bullish, with target upside of 1890/1910.





New historic highs for the sp'500, R2K, Nasdaq Comp (well, post 2009, not 2000 tech bubble), and the NYSE comp'.

There seems little doubt that the Dow..and the Trans will break new highs within the next week or two.

Primary trend remains clearly to the upside, as especially supported on the bigger weekly/monthly cycles

Closing update from MrTopStep

a little more later...