Wednesday 26 March 2014

Volatility reverses from the open

Yet again, with equities opening higher, the VIX opened lower..but there was a confirmed reversal by 10am. The VIX settled higher by 6.5% @ 14.93. Near term outlook is for VIX to battle into the 16.50/17.50 zone. The 20s seem unlikely, unless market breaks <sp'1800.




*a closing hour high of 15.28, but VIX just couldn't quite hold the 15s.

So...yet another day where the VIX broke into the 13s, but again...reversing back higher.

As noted in the lunch time video,  buyers keep stepping in when VIX 14/13s, which is indeed a pretty low VIX level.

Certainly, there will be some difficulty in breaking much above 16.50/17.00 in the remainder of this week.

more later..on the indexes

Closing Brief

US indexes closed weak, after opening moderate gains. The sp' swung from 1875, to settle -13pts @ 1852. The two leaders - Trans/R2K, settled sharply lower by -1.6% and -1.9% respectively. Near term outlook remains somewhat borderline, with strong support in the 1845/35 zone.



*a pretty weak closing hour, which certainly helps set up a bearish Thursday - although I remain concerned at another sig' QE-pomo.

So.. a close in the sp'1850s...and the morning high of sp'1875 now looks a fair way up.

A good little victory for the bears, and the only issue now is whether we can break <1830...which will open up a free ride to 1800/1790 next week.

more later..on the VIX

3pm update - weakness into the close

US indexes have clearly broken, with the two leaders - Trans/R2K, having provided a good early signal this morning. VIX looks set to battle for a daily close in the 15s. If equity bears can close in the low sp' will offer a straight forward gap lower into the 1840/35 zone, early Thursday.




Well, thank the has indeed turned out in favour of the bears. A particularly rough open again, the fourth in a row...only to see yet another reversal.

Considering the breaks of trend - seen better on the daily charts, it does look like the bears are taking control...and a challenge of key support in the 1830s looks viable across Thursday/Friday.

Primary target is indeed the 1840/35 zone

If the 1830s will be an 'easy ride' the 1800/1790s...where there is the 61% fib' level..along with rising trend.

...updates into the close...

3.03pm... minor chop...around 1862....bears really need to whack this 7pts lower this hour to 1855.

VIX holding gains of just 2%..not exactly inspiring.

What remains especially weak...the momo/hysteria stocks....not forgetting PLUG..or KING today.

3.15pm... many of the bull rats will bail into the close? They should be concerned at the weakness in the Trans/R2K.

3.25pm.. VIX pushing higher...a close in the 15s...would make ALL the difference, and open up 16.50/17.50 tomorrow.

3.33pm....bears got no excuses now...everything is set right for weakness into the close....

seeking 1855/53..with VIX in the low 15s...that'd help setup tomorrow.

3.41pm... looking good. the rats ARE bailing into the close. look at them jump!

3.54pm.. least today.   back at the close !

2pm update - HMS Bull Maniac... blown up

The US market has looked tired for days, and with the two leaders - Trans/R2K, breaking earlier, it is not exactly a surprise to see the broader market similarly turn red. VIX is battling higher, a daily close in the 15s would be an important initial move. Metals are weak, Gold -$8



The rest of the day...will be interesting

...yes...Linderman...and for the two of us ;)

Battle continues!

Equity bears really need a VIX in the 15s to offer some clarity this is just not a minor swing.

16s..would really clarify matters, but will be lucky to see that tomorrow.

2.15pm.. minor chop...

Best case for the close.. sp'1850...with VIX 15.50 or so.

Hourly MACD cycle is set to turn negative BEFORE the action should remain weak for rest of today..and early Thursday.

2.30pm... look at those momo stocks....they are getting the hammer.. FB -6%, TWTR..all of them!

2.46pm...  a little minor the sp'1860s....bears really need to close this <1860.  VIX +3%, which right now, is just barely noticeable.

1pm update - two leaders warning of trouble

Whilst the headline indexes remain close to flat, much more notable is the weakness in the two leaders - Trans/R2K, lower by -0.8% and -0.5% respectively. Equity bulls are running out of chances to break >sp'1883. VIX remains fractionally lower.

Trans, daily

R2K, daily


So...3 hours to go..we have an interesting afternoon ahead!

Often the two leaders will break -0.5% to -1.0%, a day before the headline indexes finally snap lower.

I remain heavy short..with 'line in the sand' short stops at 1884/85.

1.23pm... Market looks...real tired.

Hourly cycles are rolling over....offering sig' downside tomorrow.

A daily close in the 1850s would make things a lot easier for the bears...

*notable weakness...momo stocks are getting the hammer... FB, TWTR, -4%..and looking ugly.

1.30pm.... sp'1864..and the 1850s...are kinda close..with 150 minutes to go !

Come on bears...its time to start firing the heavy artillery...and make some noise.

1.43pm.. welcome back to the 1850s.

12pm update - trying to be patient

The market continues to see minor (toppy?) chop, just under the key sp'1875/83 zone. What is clear, if we are trading <1860 by late Friday, the door is open to 1800/1790, but for now..that is a mere bearish dream. VIX continues to flip fractionally higher/lower.



*a simple stripped down index chart, but the point should be clear.

If the bulls can't push up from here...with a weekly close at least in the 1860s...then bears are going to win this little battle. Although, I sure won't get overly excited if we drop to 1800/1790, that still won't be enough to change the bigger picture.

VIX update from Mr T

time for lunch

12.25pm.. Trans.. -0.7%... R2K -0.6%...the two leaders are warning of trouble.

11am update - QE fuel remains the problem

Equities remain stuck just under a key resistance zone of sp'1875/83. The hourly equity/VIX cycles are more than due for a clear turn - in favour of the equity bears, yet today and tomorrow, there is the old problem of QE-pomo.




*I suppose the bears at least did get an opening reversal candle..and more often than not..they do mark at least a short term floor.

Were it not for the QE fuel.. I'd be moderately looking for a daily close in the sp'1860/55 zone, with VIX 15s.....but we do have the QE....urghhhhh

For those needing entertainment..go check KING.

..or PLUG .....+52% yesterday,.... today -16%.

I can't stand those damn hysteria stocks..but they sure are fun to watch.

UPDATE 10.56am.... We have the two leaders - Trans/R2K, both on the slide -0.4%.

11.30am... upper hourly bollinger.. 1875..should at least hold the bulls there..but even then..a daily close in the 1870s is no good for bears.

Its getting tiresome again...need a daily close <1860.

10am update - yet another reversal

US equities open moderately higher, but there are again signs of a reversal, especially with the VIX. The ultimate problem for the equity bears remains the QE-pomo, of which there is $2-3bn this morning. Metals are seeing minor chop, Gold -$1.50.




*I am very concerned at the QE today..and tomorrow. Bears face major problems with that issue.

Maybe its just me, but watching the VIX, tick by sure is damn twitchy this open.

This is particularly good commentary...from Mr H.

Maybe we just need to wait for clown finance TV to start talking about 'Economic Nirvana', for the ultimate sell signal?

10.02am.. Equity bears achieve an opening VIX reversal candle....however, I can NOT take seriously any of this..until we get a daily least in the mid 15s.

10.03am... The two leaders - Trans/R2K...set to turn red...

This could be a fierce battle today...bulls have the QE...bears....still holding the line <1883.

Strap in...a long day ahead!

10.05am.. Bears must break < really get a down wave going..otherwise..its just the same old chop.

Trans..turns... RED

Notable weakness... coal miners... BTU -2.8%.....most battered sector in the entire market.

10.19am... Oh noes....Candy Crushed....KING, -9%...from IPO of $22.50

more on that later...

10.27am... VIX turns green.... sp' back in the 1860s...but...really, I got to see the 1850s today to have any mild hope that the bears are going to hold the line <1883.

For pure entertainment...KING is fun to watch this morning.....

Fair value?  $0-01 ?

Pre-Market Brief

Good morning. Futures are moderately higher, sp +8pts , we're set to open around 1873 - a mere 10pts shy of a new historic high. Metals are a touch higher, Gold +$2, Silver +0.3. Equity bears face the problem of sig' QE-pomo today.



*awaiting Durable Goods orders

The line in the sand for the bears remains 1883. Any push into the 1884s..or higher, and we'll just keep on going,

Frankly..its not looking good for those on the short side right now.  With sig' QE today, and an even bigger amount tomorrow...just how the hell are we going to break into the 1840s..never mind sub'1800 ?

Its just the same old problems...

The only thing the bears have in their favour, the hourly cycles will probably be fully maxed out today...but any break >1883 negates any of that.

Hunter..with Morgan

I do like Hunter, he has had some good guests over the last few months. As for this interview, Morgan and his 'dollar doom', is the same nonsense we've been hearing for the past decade from the hyperinflationists. As I even noted last night, until we see USD <70, the 'dollar doomers' should stay mute.

Whether long, short..or on the sidelines..............have a good day.

9.33am.. well, here go again....sp'1873....

Bulls just need a daily close >1875...which was last seen Mar'10.

VIX in the 13.50s.....bizarre. 

9.37am... Black-fail candles for equities...and a reversal candle for the VIX.


Regardless, I can not take seriously any reversal, unless we get a daily close <1850, and that sure looks difficult today...not least since a QE truck is set to deliver at 10am this morning. Urghhhhhhh

Some of the chess pieces

Whilst the main market continues to see mixed chop in a tight sp'1883/1834 range, I thought I'd end a rather tedious Tuesday, by highlighting a few of the bigger chess pieces - WTIC Oil, Copper, US Bond  yields, and the USD.

WTIC Oil, monthly

Copper, monthly

10yr bond yields

USD, monthly'2, rainbow


What to note on the above four?

Well, we have Copper and Oil, both somewhat weak. In many ways, the break in Copper under the $3 threshold is the most bearish economic aspect so far this year. Certainly, we don't necessarily have to close March in the 2s, but it'd sure help from a pure technical perspective.

Bonds are still broadly climbing, with the 10yr at 2.75%. By late 2015, I'd be surprised if the 10yr is not in the 4s, even low 5s, and no, I don't believe that is what tips the economy over the edge.

The USD looks floored - see MACD (green bar histogram cycle. Obviously, a March close in the 80s is pretty important for the dollar bulls, whilst there remains the threat of a further decline to the 78s. All those touting 'dollar doom' really ought to stay mute until we see sub 70..and that includes the Schiff.

Looking ahead

Wednesday will see Durable Goods orders, and the PMI service number. The market will definitely pay some attention to those. If they come in better than expected, then the bull maniacs should be able to make a play for the 1880s again.

Recent price action remains mixed, and right now, a daily close <1850 looks..difficult. As many have noted, perhaps the 'big money' is just going to be hold this market flat into end month/quarter.

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

Hysteria in London City

I'd not normally highlight the Keiser (not least since he is somewhat a love him or hate him kind of person), but there is some interesting chatter on the student loans mess, and property prices. The current price ramp in London property is no doubt significantly due to the foreign capital from the mainland EU (especially France), as many flee from increasing taxes.

As for the recent UK budget, it is indeed lame that the Govt' talk of 'reducing the deficit', whilst completely refusing to address the fact that the actual total debt continues to grow each year. I guess the UK and USA still have that in common.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately higher, sp +8pts @ 1865. The two leaders - Trans/R2K, settled +0.5% and u/c respectively. Near term outlook is uncertain, until a break either >1883, or under 1834. VIX continues to reflect a market that has broadly no concerns in the near term.





The most notable aspect about today, the Transports, which came pretty close to breaking a new historic high, but then it has been trying to do that for the last 12 days (if you start the count from the high of March'7 of 7627).

Aside from that, the market remains in a rather tight trading range of around 3%

Bulls just need to push 1% higher to break new historic highs, whilst bears need to take out 1834, to have a small hope of 1800/1790 within a week or two.

a little more later...