Monday 10 March 2014

Volatility fractionally higher

With equities holding moderate declines across the day, the VIX just managed to hold fractional gains, settling +0.6% @ 14.20 (jntraday peak: 15.28). Near term outlook remains for the VIX to remain in the 15/12 zone until the next FOMC of March'19.




Most notable aspect of the day, the black-fail daily candle...which does not bode well for the equity bears tomorrow.

*VIX 20s look viable no earlier than April.

more later..on the indexes

Closing Brief

US equities closed moderately lower, sp -0.8pts @ 1877. The two leaders - Trans/R2K, both settled lower by around  -0.2%. Near term outlook is for the market to slowly battle toward the sp'1900s by the time of the next FOMC.



A pretty quiet start to the week, and I really don't have much to add.

VIX looks set to remain low for another week - into VIX opex/FOMC day of March'19. From there, I would be looking for a key turn. Whether it is a grand intermediate top...that won't likely be known until late April at the earliest.

more later...on the VIX

3pm update - underlying upside

Despite the main indexes holding moderate declines, the underlying upside pressure is still clearly there. Equity bulls are a mere 0.5% or so from breaking new historic highs on a number of indexes, and the VIX continues to reflect a market that for the moment..has no concern of anything.



*underlying MACD cycle is low..and there is very much the threat of new index highs this week.

A quiet start to the week overall..and I realise many out there haven't even booted up their trading screens today.

Many seem equally content to wait and see where we are next the FOMC.

DRYS is starting to look somewhat ugly

With a break <$3.80/78...I'm no longer interested. Price action just looks weak.

3.31pm... the chop continues.

Meanwhile...coal miners remain exceptionally weak, ANR, BTU..breaking new lows...monthly charts look dire.

3.53pm.. nasty market..wants to close green..  poor bears :(   Oh well, only another week to go.

2pm update - the stripped weekly

Whilst the day continues to see minor weak chop in the sp'1870s, the bigger question remains when is the current ramp from 1737 going to end? The weekly up trend remains powerful, but we are clearly in the very upper end of the viable trading range. Bulls face strong resistance in the 1880/1910 zone.

sp'weekly'2, rainbow


Stripped of labels..counts...what can we say?

Bulls have seen a sig'ramp..and we're close to getting stuck.

Personally, I will be looking for a blue candle on the 'rainbow' chart either this week...or next week. If that is achieved, I'll jump on the short train.

For now...I'm content to wait though.

Lets see if the bull maniacs can break >1883 tomorrow..or later in the week.

*in the meantime..the PLUG hysteria remains entertaining....

Unquestionably...wrapped in utter parabolic hysteria..and that is a bearish engulfing candle on the hourly chart..   bull maniacs...beware!

2.33pm.. the churn continues

Notable weakness: DRYS, losing the 50 day in the $3.70s. With that break, I'm leaving that well alone.

If market gets trashed this spring/summer..DRYS would be attractive to me in the low $2s.

1pm update - plugged into hysteria

Whilst the main market continues to attempt to claw back to green, there is some notable hysteria in Plug Power (PLUG), +33% in the $11s - having been in the $6s just a few days ago. Despite making no profits, the stock is soaring on heavy buying volume.

PLUG, daily (non log chart)


PLUG even got a mention on clown finance TV this morning.

On any basis..this is now a parabolic hysteria based insanity.

Completely vulnerable to an extreme intraday reversal at any time.

As for the main market...

Not much to add...bears just don't yet have the downside power. Broader trend remains...UP.

12pm update - still lacking downside power

US indexes see a rather typical turn around 11am, and the main indexes are now only fractionally lower. VIX has cooled down, and was earlier sporting a black-fail candle on the daily chart, most certainly favouring the equity bulls this week. Precious metals are trying to build gains, Gold +$3




*note the tight bol' bands on the VIX daily. By middle of next week, VIX will be set to make a break higher, whether that is >22...remains the big question.

There just isn't any real downside power on the bearish side, but then..that really shouldn't come as a surprise to anyone.

The fact we have sig QE-pomo this morning sure isn't going to help those seeking equity downside.

Miners remain very weak.. BTU -3.5%

VIX update from Mr T.


11am update - typical turn time

US indexes are moderately lower, and we have some interesting weakness in the two market leaders - Trans/R2K. Yet...all indexes are holding the broader upward trend, and so far, price action is still in favour of the equity bulls.


Trans, daily


So..we're lower, but we've seen this type of price action many times in the past few weeks, and so always ends the same.

Hourly MACD cycle is low, and bears are getting an opportunity to exit almost 1% below the Friday opening high.

As a typical turn time..bears beware!

*equity bears need a daily close <1834, and right now..that looks...real difficult.

Notable weakness in the momo stocks: NFLX, TSLA, an exception is FB, +2.4%

11.15am... we're turning...back to sp'1870.

VIX cooling down a little..back <15.

11.30am.. classic 11am turn...and we're already 7pts off the low.

Just isn't any downside power, and we now have 1867 as yet another higher low.

10am update - an hour closer... for a few weeks

Good morning. US equities open a little lower, but with sig QE-pomo today, the equity bears face the usual problems. Precious metals are flat, although it is notable that Copper futures broke <$3 in overnight trading. VIX is higher, but only 4%, and remains in the lowly 14s.



*however you want to count the ramp from sp'1737, the broader trend remains higher, and unless we start putting in a few lower highs..lower lows...bears have nothing to get exctied about.

If there is one thing I find annoying, its when the US clocks change...but not those in the UK/EU. For 3 weeks, London city is a mere 4 hrs ahead of the US east coast.

As for the market... hourly MACD (blue bar histogram) is already negative cycle, and frankly, with the QE today, I can't see the bears managing anything today.

*notable moves so far...

Miners...ANR, BTU, FCX, all very weak - after the Friday massacre.

Notable strength: UAL, STX.

Video update from Mr F flag.

At 6min, the ES chart of 'no triple top', is in my view...critical for the bears to at least...consider.
stay tuned!

10.12am..  Dow -80pts..despite this..there really isn't any downside power.

The only issue seems to be..when will the QE money kick in today?

*I'm watching DRYS, its holding above the 50 day MA, but really, I'm just not in the mood to hit buttons. Besides, the bigger trade - at least for me, is an FOMC index short next week. 

10.35am.. first key support is sp''d be Dow -140pts

Regardless..this is the same 'tease' bears have seen for over a month.