Monday 31 March 2014

Volatility falls into end month

With equities battling higher across much of the day, the VIX was knocked back into the 13s, and was unable to claw back, settling -3.8% @ 13.86 (intraday range: 14.16 - 13.57). If sp >1883, then VIX looks set to slip into the 12/11s.





*a rare look at the VIX monthly chart, which had a net decline of -1% this March.

The hourly VIX cycle is arguably close to floored, but..if the equity bulls do manage to break >sp'1883, then VIX will be further crushed for the rest of this week.

Daily VIX candle was a reversal doji candle, the second consecutive reversal. Although MACD (blue bar histogram) cycle ticked lower for the third day... no sign of a turn yet.

The VIX 20s look very difficult, and are most certainly out of range, unless bears can take out the key low of sp'1834.

more later...on the indexes

Closing Brief

US equities closed higher, with the sp +14pts @ 1872. The two leaders - Trans/R2K, saw much more significant gains, settling +1.7% and +1.8% respectively. Despite the Monday gains, it remains a borderline situation, bulls need >1883, whilst bears need <1834.



*minor weak chop in the closing hour, but nothing for the equity bears to get overly excited about.

..and that is a wrap for Q1. Certainly, the bulls remain in broad control, but we remain a tight range that is now four weeks old.

Clearly, if we break >1883..we'll battle considerably higher. Similarly...a break <1834..will open up the 1800/1790 zone.

more later...on the VIX

3pm update - last hour of the quarter

Equity indexes are still net higher on the day, especially the two leaders - Trans/R2K. As things are, the sp'500 is set to close March with net gains of around 0.7%. Metals are weak, Gold -$9, and set for a major monthly bearish reversal. VIX is far unable to hold the 14s.



Summary is the closing hour of Q1 trading!

*I will probably do a limited monthly chart summary later this evening, although there is a lot to cover for this month, not least in commodity land.

Overall, most indexes look set to close higher, the notable exception is the R2K. The old leader - Trans, has monthly gains of around 3%.

3.13pm.. I am just going over some of the monthly charts for this evenings posts, some pretty interesting moves to cover..not least Copper, and Oil.

*new QE-pomo schedule is out.. next sig' QE is not until Wednesday, and even then, its just $2-2.5bn.

The QE prop IS being taken away...

3.25pm.. By end Tuesday, bears need to be in the low have any hope.

It remains a 4 week period of chop...but near term momentum is with the bulls..but I'm sure not going long at these levels.

If I get the boot at 1884/ be it.

3.40pm.. sp'1874....a close >1875...would be especially bullish for tomorrow.

Certainly, this was just another month for the equity bulls...month'30.. since grand wave from Oct'2011, when sp' was a mere 1074. 30 months.

3.48pm.. a daily close >1875...looks just out of range...but nothing for the bears to get overly excited about.

Well, thats it for another quarter..back at the close...with some end month updates..across the evening..especially on the precious metals..and miners.

2pm update - who wants to go long in the 1870s?

Equity indexes are holding the gains, but look very vulnerable in the remaining two hours of Q1 trading. VIX remains weak, a positive close would be a major sign for the bears.. but that won't be easy. Metals are weak, with Gold -$8.


GLD, daily


*the metals are indeed weak, and we'll see a major bearish reversal occur. More on that...on my Gold/Silver page..later.

As for equities...the hourly cycle sure is vulnerable. Either the bulls push hard here...or its going to break lower..yet again.

Considering the end month/quarter issues, the next two hours could see some pretty interesting moves.

Stay tuned!

2.17pm.. VIX just can't hold the 14s.. sp' 1872...but still..bears should be thankful for ANY close <1875, not that it removes threat of new highs tomorrow.

It remains....on the border.

2.25pm... Bears feeling max-pain this afternoon...on the edge.  I sure am.

Gold and Silver remain weak...for the bugs out there..a very disappointing month.

1pm update - VIX back into the 13s

With sp' seeing a further micro up wave to the mid 1870s, the VIX has been duly knocked lower, back to the levels from last Wed' morning. The two leaders - Trans/R2K are seeing some very significant gains, with the Trans once again close to breaking a new high.


Trans, daily


So... sp'1875 - which has been a key resistance level for the last FOUR weeks.

A daily close >1875 would be very bullish for Tuesday (not least if there is sig' QE-pomo tomorrow, although we won't know that until the new QE schedule at 3pm today).

I remain short, but will get kicked out if >1884/85.

No point holding above there, since the next ceiling is probably somewhere in the 1950/75 early May.

1.20pm.. Who wants to go long right the 1870s... hmmm ?

Thats what I thought.
Lets see how we close the month...and quarter.

*notable weakness: TWTR, TSLA.  Certainly, the momo stocks aren't doing so great today.

Metals.. weak, Gold -$5..and a bearish monthly reversal..WILL occur.

12pm update - an interesting afternoon ahead

US indexes have seen morning gains in each of the past 7 trading days..yet each have faded to some degree. The rest of today will be particularly interesting, not least due to end month/quarter issues. Bulls need >1875 (although not necessarily today), whilst bears need <1852.




*yes, we saw another opening reversal candle for the VIX this morning.

Four hours left of the month..and quarter. With the hourly equity/VIX cycles looking prone to a turn...the bulls face pressure all the way into the close.

VIX update from Mr T

time for lunch

12.20pm.. VIX fails to hold the opening @ 13.80. For the bull maniacs out there, this is a major positive sign.

11am update - bulls have to keep pushing.. or else

US equity indexes are holding moderate gains, with the sp' having broken back into the low 1870s. VIX looks floored in the 13s (just how much lower could it go anyway?). Having seen no less than SIX previous failures to break higher, the pressure on the bulls will be high this afternoon.



*I think the hourly upper bol' is important. Bulls need a close - today..or tomorrow >1875.

For those who think the market will break lower..the short-stop levels are obvious....aren't they?
-- hysteria land... Twitter looks set to close the quarter <$50.

Hysteria fans..beware!

11.08am VIX 14.01... bears just need >14.25 to begin something...

11.27am.. VIX 14.16.... the potential IS there.  

How many of the rats will want to cash out this afternoon for end month? Hmmm

10am update - morning gains.. yet again

For the seventh consecutive day, the market opens higher... yet each time we've seen a rather significant reversal. Today is complicated with end month/quarter issues. VIX opens a little lower, but is already starting to rebound. Metals are weakening... Gold -$2




*opening reversal candle on the VIX. Underlying MACD cycle is kinda low.. and there is threat of the 16-18 zone this week.

**Chicago PMI : 55.9.. a clear miss.

Equity bears need to break back into the 1840s tomorrow (see rising trend line on daily chart).

Obvious target for the bulls is >1883...won't be easy..after 6 previous fails.

Long day..and long week ahead!

10.04am... Just 10pts from breaking a new high... unless some end month selling appears later today...bears look toast.

One thing seems for sure...within a few days..we'll either be >1883...or <1840. 

10.15am.. hourly VIX cycle will be flooring soon...bulls...have 'issues' ahead this afternoon.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +8pts, we're set to open around 1865 - close to the Friday high. Metals are slightly higher, Gold +$2, whilst the USD is a touch weak, -0.1%. Mr Market has a large number of end month/quarter issues to deal with today.



*awaiting Chicago PMI - due 9.45am.

So..for the seventh consecutive day, we're set to open higher, and again...the issue do we close..rather than open.

Can the bull maniacs finally break higher, or can the bears can attain a close in the low 1840s..and then punch <1830 later this week?

The weekly charts suggest...yes. Monthly charts (especially Dow) are vulnerable to rolling over into April.

Video update from Mr Permabull

Make of that...what you will.

*I remain short, with 'last line in the sand' short-stops around sp'1884/85.

Any break over that, and the 1925/50 zone would appear likely. Oscar is seeking 1975/2000 in the current multi-month wave.

9.09am.. sp +12pts..we're set to open 1869/70.  A mere 0.6% from breaking a new high.

Again, we're on the edge of a major breakout..but then..this is the 7th attempt.

9.38am... standing by for PMI....

A lousy start to the week for those in bear land..but haven't the last 7 mornings pretty much been the same?

9.45pm.. PMI 55.9... . that is a very clear miss....