Friday 7 March 2014

Volatility knocked lower into the weekend

With equity indexes seeing minor chop, the VIX was naturally flipping fractionally positive and negative across the day. VIX closed -0.7% @ 14.11. Across the week, the VIX gained 0.8%, after a Monday spike high of 16.78.





As is typically the case, the VIX was whacked lower in the closing minutes, which made for a fractional daily decline.

VIX looks set to remain in the 15/12 zone until the next FOMC of March'19. The big question to me, is whether the VIX can break into the 22s - exceeding the 2013 VIX high of 21.

Considering the bigger weekly/monthly equity charts, I believe....yes.

more later..on the indexes

Closing Brief

It was a choppy end to the week for equities. However, most important to note is that the sp'500 and the Transports, did break new historic highs. Outlook remains unchanged, with continued upside into the next FOMC of March'19...somewhere in the low 1900s.



...and another week comes to a close.

Certainly, I realise many are still utterly frustrated by this market. Bears are still being teased by sporadic little pull backs of 0.5% or so..only for the market to rally right back.

Personally, the broader outlook remains on track. What will be critical is the price action in FOMC week. I'd really like to see a very sharp intraday reversal, to make a clear spike-top. We've only another 8 trading days to find out.

*Thanks to all those who have said hello/commented this week, it is always good to hear from some of you.

Have a good weekend everyone!

The usual bits and pieces across the evening.

*the weekend post will be on the US monthly indexes

3pm update - another week for the bulls

Regardless of how we close today, it was another week for the bull maniacs. The mild bearish hysteria of Monday - when the sp'500 floored at 1834, now looks a long way lower. Most seem resigned to the sp'1900s within the next week or two.



Key rising trend support on the sp' is clearly around 1860 - at the Monday open. theory...Monday could open lower, but from there....up to 1900s late next week.

Metals remain weak, Gold -$12, but Silver is especially weak, and looks pretty lousy on the weekly chart - see Gold/Silver page, after the close.

3.30pm.. well, the sp'500 almost green. How many bears will need to close out for the weekend?

Something to watch for near the close...VIX to get knocked the 13.60/50s. 

3.40pm.. a few rats are selling into the weekend, I can't blame them.

At best..equity bears have a fair chance at sp'1865/60 at the Monday open..before another wave higher. Certainly, the 1900s look viable by late next week.

*notable weakness in the miners, FCX -5% on heavy volume.

2pm update - the unloved miners

Whilst the main indexes continue to see minor chop - but still close to historic highs, there is some very severe downside in the coal miners. All the big names have been smacked lower, with Alpha Natural Resources (ANR) and Peabody Energy (BTU) lower by around -11% and -5% respectively.

ANR, daily

BTU, daily


Many of the coal miners are close to the lows from the 2008/09 collapse wave.

Of course, since that time we've seen some of the big names disappear. Massey was bought/merged (with ANR?)..whilst Patriot coal (PCX) imploded to zero.

I remain a fan of the miners (real companies, real product), but today's snap a nasty move..and does not bode well for the spring/summer.

At the current rate of decline, we'll be able to buy an entire coal mine for $1 by 2015... but hey, by then, maybe King O' will have made coal illegal on 'environmental grounds'.

*as for DRYS

I'm watching, but really, I suspect a further minor fall early Monday..maybe the $3.80/75 zone - where the 50 and 10 day MAs are lurking.

1pm update - probably a sleepy afternoon

Barring a random Russia/Ukraine news update appearing this afternoon, market looks set to quietly churn into the weekend. Metals remain weak, Gold -13, with Silver -2.5%. VIX is melting lower, -2% in the 13.80s.



There really isn't much to add...

Notable weakness in the coal miners...

ANR -9%
BTU -4%

The monthly charts for those look absolutely horrifying. More on those later.

1.03pm..another micro snap lower...but historic highs all over the place.

Don't get lost in the hysteria ;)

12pm update - chop chop

It has been a choppy morning for equities, swinging from minor gains - with new historic highs on the sp'500, Trans, R2K, to minor declines..and recently back to the low 1870s (as if 'low') can be applied to 1870. Metals remain weak, but off their lows, Gold -$11.



Overall, price action is nothing for the bulls to be concerned about. Indeed, with new historic highs on a number of could anyone be bearish about things?

I continue to have my eyes on DRYS, but barring a mood change..I'm just not particularly interested, unless I see the 3.80s.

DRYS, 60min

VIX update from Mr T

time for lunch

11am update - minor chop turns to churn

US indexes opened higher, saw some minor chop, and it now looks like we'll merely 'churn into the weekend'. The equity bulls have managed a very strong turnaround from the Monday low of sp'1834. A weekly close in the 1870/80s would be yet another strong net weekly gain.




*there is actually quite a bit going on, despite the main market somewhat muted.

We have the coal miners getting smashed, ANR, BTU,
Gold/Silver both significantly lower, after the 'good' jobs data.

VIX has again slipped to the 13.50s....the 12s certainly look viable.

Overall though, the primary trend is unquestionably bullish, with further upside likely into the next FOMC of March'19.

11.11am teasing the bears..with a minor down cycle to low 1870s.

Anyone want to get hysterical over this?   Go look at the above weekly charts!

10am update - opening gains a little.. shaky

US indexes open moderately higher, although the price action looks a little...shaky. Most notable..the Transports, breaks a new historic high. Metals are sharply lower on the 'better than expected' jobs data, Gold -$17, Silver -3.0%. VIX breaks lower to 13.50s



*opening reversal.....hmm

The Monday low of sp'1834 is now around 50pts lower, and equity bears look as weak as they ever have.
Clearly 175k net job gains is the new 'superb' level in this economy, even though it takes 150/175k jobs just to negate the demographic change each month.

Effectively...we're flatlining in jobs...and GDP is flat/ moderately recessionary, if you strip away the QE.

DRYS, I'm watching...

opens with a bearish engulfing candle on the hourly...

The $3.80s would interesting level later this morning.

First support for the indexes...1870 or so...that is not even 0.5% lower.

10.09am.. Well, a weekly close in the 1870s will make for another week for the bulls, and sets up the week..or FOMC week.

The only hope the bears have is a sporadic news story from Russia/Ukraine, but the Crimea vote is not until March'16.

10.25am... Coal miners getting smashed... ANR, BTU.... -8%....I've no idea why, but then..the general trend has been dire for a few years now.

Pre-Market Brief

Good morning. Futures are a touch higher (ahead of the jobs data), sp +2pts, we're set to open at 1879. Metals are flat. Equity bulls have had a very strong week - considering the scare on Monday about the Ukraine. Any close in the 1870s would be impressive.



*awaiting the jobs data...

175k net gains, with 6.7% headline rate     vs 150k, 6.6% expected.

Indexes jumped 0.5%.... sp +8pts.... 1885... new historic (pre-market) high

So...its the old 'better than expected'..and market rallies.

8.42am.. sp +10pts..we're set to open @ 1887....the 1890s are coming by 11am..

9.33am.. Transports breaks a new historic high.

Metals are getting the hammer, Gold -$19, Silver -2.8%.....after all, who needs a 'relic' in the new economy?

*Cramer is in particularly hyper mood this morning, bashing the bears.

9.35am..  black candles appearing all over the' the indexes..

opening gains...failing.


Look at that spike. There looks to be a chance we'll flip the low 1770s.

9.41am... sure feels...a bit choppy..but..clearly..there is no sig' downside pressure. Looks like the opening brief spike...almost immediately recovered.

The consistant action remains in the metals, with Silver now 3% lower!

Awaiting the jobs data

Mr Market is awaiting another set of monthly jobs data. However, even if the number is lower than expected, market will probably still manage to rally on the notion of 'less chance of QE-taper'3' at the next FOMC of March'19.



It was just another day for the bulls, and it appears utterly pointless for anyone to be attempting any index shorts right now. Underlying price momentum is powerfully bullish on the bigger weekly/monthly cycles.

Regardless of the Friday open, we still look set for continued gains into the next FOMC of March'19. What happens when things might get interesting.

Old leader is catching up

As many have noted, the Trans (and the Dow) have been laggy. Yet...both look set to break new highs, whether tomorrow..or next week, it really doesn't matter, does it?

Trans, weekly'2, rainbow

It looks like we'll close the week with a net gain of 2.5-3.5%. A new historic high, to end the week would merely be the ultimate bonus for the bull maniacs.

Looking ahead

Market is expecting 150k net job gains tomorrow (with a static rate of 6.6%), which would be almost double the gains of the past two months.

My best guess? It is always very hard to fathom what the BLS will 'calculate', not least the mysterious seasonal factor. I'd have to go for something in the 100/125 zone. Not great, but neither would it be apocalyptic.

*next sig QE-pomo is not until next Monday

Goodnight from London

Daily Index Cycle update

US indexes closed somewhat mixed, sp +3pts @ 1877 (intraday peak 1881). The two leaders - Trans/R2K, settled +1.0% and -0.1% respectively. The broader outlook remains for the market to rally into the next FOMC, somewhere in the 1900/20 zone.





Most notable, the Trans...and the Dow, are both set to break new highs.

Even if we open somewhat lower tomorrow - on 'bad' jobs news, the market will surely just claw right back. The bigger weekly/monthly charts are highly suggestive of the sp'1890/1910 zone in the very near term.
a little more later...