Volatility climbs into the weekend

US equities broke new highs in early morning, and the VIX slipped to 12.60, yet there was a very sharp intraday reversal, with the VIX settling +4.4% @ 13.96. Near term outlook is uncertain, and will be dependent on whether the bears can break <sp'1850. Across the week, the VIX declined -3.1%


VIX'60min

VIX'daily3

VIX'weekly

Summary

*it is sadly ironic for the equity bears, that despite the sharp Friday reversal, the VIX still saw a net weekly change of -3.1%.
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As I was noting across all of today, the VIX is still lacking any real upside power/kick. Until we see VIX in the upper teens/low 20s, the equity bears just can't get overly confident that a major multi-week down cycle is underway.

Right now, I do not expect the market to unravel for some weeks, probably early May.
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more later..on the indexes

Closing Brief

US equities broke new historic highs in the opening 30 minutes, but they sure didn't close positive, sp -23 pts @ 1865. The two leaders - Trans/R2K, closed -1.5% and -2.3% respectively. Outlook for Monday is uncertain. Equity bears need a break of the rising weekly 10MA, and the 50 day MA (1838).


sp'60min

Summary

..thank the gods...its the weekend!

This mornings reversal was a pleasant surprise, and congrats to anyone who had the audacity to short the opening gains. The two spiky candles were a particularly great example of why candle type can be a useful warning.

I guess I could have chased the market lower from the 1890/85 level, but really, I just wasn't in the mood to hit buttons today.

As things are, I will look to go long the indexes next Mon/Tuesday, with a stop in the sp'1850s. For me, the lack of upside power in the VIX remains a long standing problem for the bears.

Have a good weekend everyone.
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*the weekend post will be on the World Monthly Indexes

3pm update - rats selling into the weekend

The opening new historic high of sp'1897 now looks a long way up, but still, baring a weekly close <1857, the bulls are still set to see net weekly gains for some indexes. VIX is moderately higher, but still not showing any major upside kick/power. Metals/Oil, holding their gains.


sp'60min

VIX'60min

Summary

...its the closing hour of the week...a little drama might be fun!
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For the doomer bears...

To those who already think a key top is in...bears need a weekly close <1857, that should be enough to offer a small chance to break the rising weekly 10MA..which will be in the 1850s next week.
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My primary concern remains the VIX, despite equities significantly lower, the VIX is NOT displaying any real power.

I've seen this picture many times, and it rarely ends well for the bears.

*were I short, I'd exit into the weekend.
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We're seeing a bounce off the 61% fib level of 1863, but price action looks very weak, a weekly close in the 1850s looks very possible.

The ONLY thing that suggest otherwise is the VIX, which is still not showing any real power.


3.06pm.. for entertainment..turn on clown finance TV, channel'2. . (aka, CNBC).

It is amusing seeing the cheer leaders get a little rattled today's reversal, especially the weakness in the momo stocks.

Gods forbid AMZN loses its PE ratio of 10 million !
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3.17pm.. we have a possible two candle spike-floor, on the 61% fib level.

Bears need to push here..< 1863....whilst they have the momentum. It won't last forever!


3.24pm.. sp'1869...bears starting to bail...and the VIX cooling down.

If the VIX does close in the 13s, it'd be a pretty bad sign for bears.


3.30pm.. omg, my stupid email client and/or disqus has not been telling me some of you have been leaving comments today...

Sorry, if you're wondering why I haven't replied!


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3.37pm... long legged doji candle on the hourly....and the MACD cycle is trying to level out.

So long as we don't break the weekly 10MA next Mon/Tuesday, I will go long.. with a tight stop in the sp'1850s.

VIX remains the problem..for those in bear land.


3.40pm... well, its been a busy week...are we closed yet?

Notable strength: coal miners, BTU +3%. They remain an utterly battered sector though.


3.45pm... sp'1862s..or lower would make ALL the difference...

What rat is going to buy into the weekend? I can't imagine it!


3.48pm.. Are we 'off the lows of the day yet' ? Where is Bartiromo when clown TV need her?

Come on bears...break <1862


3.52pm.. CNBC roll on David Dardst...aka... the closing hour hyperbull maniac. I'm almost surprised he is not in a cheer leader outfit.

Minor chop....bears not filling in all the 'doom' boxes today...not least with the VIX.
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Interesting reversal to end the week............back at the close.

2pm update - market still weak

US indexes remain weak, especially the R2K and the Nasdaq. However, VIX is only reflecting a market that is 'marginally' concerned, +5% in the low 14s. Metals and Oil are both holding significant gains. Barring a close <sp'1860, the equity bulls haven't that much to be spooked about.


sp'60min

R2K, daily

Summary

R2K sure looks ugly today...and it is closing this week, much in the same lousy state as last week.
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*I remain content to watch from the sidelines. Call it 'weak minded' or whatever you like, but I'm just plain tired...its been a long week. I'm still kinda recovering from the disappointment of the recent failure to break <1840.
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Notable weakness: TSLA -5.5%...ugly daily chart


2.07pm... weak weak weak.. sp' losing the 1870s.

Lets be clear...if the weekly 10MA is broken next week (<1850).. then Mr Market is in major trouble, but I'm guessing today is just a retracement.

The VIX is STILL not showing any real kick, and that should concern anyone on the short-side.


2.13pm... Sp' has now swung 28pts from the earlier high, that is pretty impressive.

For the doomer bears out there, they should be seeking a net weekly negative close, ... <1857.. that won't be easy..despite the current price action.


2.30pm... still weak...what will be real interesting is seeing how many of the rats sell into the weekend.

Those already calling a key top should be screaming for a weekly close in the sp'1850s.

R2K, Nasdaq set for a red weekly close, as was the case last week.


2.40pm.. Weekly candle turns BLUE on sp'500....we have provisional warning of trouble...and we're now 33pts below the opening high.


If you see 1862s....that is a key fib' support.. FAIL...and would really open the door to a major train wreck.

This..is starting to get interesting. still not seeing any real power in the VIX though, and that remains my core concern for the bears.


2.47pm.. This down wave is the most powerful we've seen since late January.

Bull maniacs have a bit of a problem right now....current momentum is offering a very weak closing hour...into the 1850s...which will make for net weekly declines.

Momo....carnage!

1pm update - market vulnerable into the weekend

The style of price action - two spike tops, and a confirming bearish 11am candle, bodes for further declines into the Friday close. There remains notable weakness in the Nasdaq, especially within the momo stocks, all the usual suspects are being whacked... AMZN, NFLX, FB, TWTR, TSLA.


Nasdaq Comp'

Summary

Tech' sure looks ugly...headed for the 200 day MA?

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Barring a break under the weekly 10MA of 1844 (but that will be in the 1850s at the Monday open), I simply can't take these declines too seriously.

sp'weekly8

I will need to see a blue/red candle...UNDER the 10MA, before I'd consider re-shorting the indexes.
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1.10pm.. Market might have floored, right in the target zone, but considering the weakness..and the weekend, I'll wait until Monday.

VIX trying to break into the 14s...again.. but really, that is a truly bizarre low level..


1.28pm choppy action in the mid 1870s...prime area for a floor...but I ain't tempted.

Notable weakness: TSLA -4.7%, but much like most of the momo stocks.

Oil +1.1% (congrats to the UCO holders...still holding Joe?)


1.40pm.. Perhaps most notable today..the gains in Oil and Metals....the latter of which is helping give GDX a gain of 1.5%.

12pm update - spiky tops... usually good warnings

The opening two hourly candles were pretty clear spiky tops, and as is often the case, they were indeed confirming a short term top. The 11am candle is a pretty bearish one, and bodes for further downside into the afternoon. VIX is marginally higher..having hit a low of 12.60.


sp'60min

vix'60min

Summary

*biggest hourly VIX gain since late January
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So...two spikes..and a big red candle...certainly, this morning is not dull! Near term weakness, but barring a break of the weekly 10MA next week, the broader trend remains...UP.
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VIX update from Mr T



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time for tea


12.17pm.. amusing to see the cheer leaders on clown finance TV get rattled about the weakness in the tech', esp' the momo stocks like AMZN, FB, TWTR.

We're in the target zone, but really, I'm not getting involved here.


12.42pm... minor weak chop...the immediate trend is weak...and the bulls don't get any decent sized QE fuel until next Thursday. OHh the humanity!

11am update - morning mess

Opening gains, a swift reversal...and renewed upside - but not yet breaking the early high of sp'1898. It remains a real mess in market land. The broader trend is most certainly bullish, but market looks a little shaky this morning, even the Cramer clown is twitchy about the momo weakness.


sp'60min

VIX'60min

Summary

*VIX is notably weak, and should remain a concern for any bear trying to short this nonsense.

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I remain content on the sidelines, and considering the opening 90mins, I have ZERO interest in picking up any long positions into the weekend.

If we retrace early next week, 1870s or so...I'll consider picking up a short term index-long.
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*Were I 'forced' to take a position right now, I'd be short, with a stop at 1899, but as noted, the VIX is real problem for those in bear land.


11.03am... confirmed double spike top on the hourly, that is pretty bearish...

first downside target is 1885/80..that looks viable.


11.11am.. and down we go......those spiky top candles sure are good indicators..especially if more than one!


11.25am.. tech really under pressure, Nasdaq comp -55pts....-1.2% or so....momo stocks getting trashed for second time this week.

R2K breaks...-0.9%.....ugly reversal.


11.42am..  very bearish hour...bodes for more downside into the afternoon.

10am update - opening reversal... to the downside

The US indexes break new historic highs, with sp' 1898...yet we're seeing a rather sharp opening reversal, with most indexes seemingly set to all turn red. VIX is similarly offering an opening reversal. Momo stocks under extra downside pressure.


sp'60min

vix'60min

Summary

..back from an early lunch, and the market sure has turned around in the opening 20 minutes.

Notable weakness: AMZN -3%,  FB/TWTR, both -2%....weak weak weak!
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I have to note blogger 'VT' at Trending Waves, I'm inclined to follow his micro count.

Was this mornings open the top of a sub'1...and now we see a retracement across a few days?
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10.09am...and now a wave higher.....what a whipsaw choppy mess. I'm glad to be on the sidelines..this is a real mess.

If new high >1898, then the opening reversal was of course a failure.

VIX collapsing,,  new low.. 12.67..... incredible.


10.32am.. It remains a somewhat choppy mess, but the broader market is holding gains..

Notable weakness in tech, but the momo stocks are turning positive.
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Again, its a case of 'no downside power' for the bears. 


10.46am.. hourly chart, double spike top.....bulls unable to push....bears have another major opportunity here..at the typical turn time of 11am.

Pre-Market Brief

Good morning. Futures are slightly higher, sp +5pts, we're set to open at 1893. Metals are moderately higher, Gold +$6, with Silver +0.5%. Mr Market will be cautiously awaiting the monthly jobs data this morning. Equity bulls should be content with any weekly close >1875.


sp'daily5

Summary

*awaiting the jobs data, due at 8.30am EST.

What is my guess? It is always a tough number to guess, I'll go with the 150/175k zone, but really, I'd not be surprised if it is anything from 50k to...350k. It really is up to the BLS as to what they make it, not least via the 'seasonal adjustment'.
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So far this week has been one for the bulls.

sp'weekly

Unless we get a very significant Friday closing decline, we're going to close the week with some important gains.

For me, until we break under the weekly 10MA - currently 1844 (and rising), the bears have nothing to tout. Considering we have broken new historic highs on most indexes, I'm resigned to further upside across much of April, if not also early May.


Trading for Friday

I'm open to taking an index long position, but with the weekend approaching, I might just sit it out. I tend not to hold across the weekend anyway. Right now, I have no intention of any new shorts until at least sp'1950/75 zone, in May.
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As ever..updates across the day!


8.32am - Monthly net job gains:  192k, headline rate 6.7%,  indexes a touch twitchy, sp +8pts

Certainly, that number is going to be more than enough to placate Mr Market.

I suppose we might still see a late drop..on a 'sell the news' event, but overall, this is no good for those looking for renewed downside.
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Notable early strength in Oil, +0.9% (good morning, UCO holders),  with Gold +$10


8.47am.. sp' holding gains of 8-10pts, so..we'll be brushing the sp'1900 threshold at the open.

9.00am.. Metals and miners doing well, Gold +$12, with GDX +2%, but both remain in broader down trends.


9.10am...for those still resolutely on the short-side..this is no doubt a really annoying open. Whether we reverse...hourly MACD cycles does offer a full day of gains into Monday.

*I will NOT chase this higher, but more so..I will sure as hell NOT attempt to short.

With the new highs..shorting this market seems like a plain dumb thing to do. Even I'm beyond that level.

..time for a somewhat early lunch :)


9.45am.. ohoh, the rats are making a run for the exit!  

9.50am... momo stocks getting trashed..again.   Ugly opening reversal.

Seeking a weekly close in the 1880s

A moderately lower Thursday close for the US indexes, but with new historic highs being regularly hit, the broader trend remains unquestionably to the upside. Equity bulls look set for a rather strong weekly close, probably in the sp'1880s.


sp'weekly8

Summary

So..we closed a little lower, but this is surely just part of a minor retracement. Indeed, the issue now is how many traders will go long on the expectation of much higher levels across April, and into May?

The weekly charts are clearly restricting the current upside, but by late April, we could easily be in the sp'1910/20s. Monthly charts are offering 1960/70s, but that does not look viable until May.

In May, I still expect the market to hit a concrete wall, the only issue then is how far down might we go? The last two years have seen relatively trivial summer weakness. On balance, I'd have to think the bears have a fair chance of something more significant.


Looking ahead

Tomorrow will be all about the monthly jobs data, market is seeking net job gains of 206k, with a slightly lower headline rate of 6.6%.

*next sig' QE-pomo is not until next Thursday.
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Seeking to go long

Considering the array of new index highs, and the recent utter failure to break <sp'1840/30, I will strongly consider picking up a large long-index block tomorrow. Ideal price range remains 1880/75, some time around the typical floor time of 11am.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately lower, sp -2pts @ 1888. The two leaders - Trans/R2K, settled lower by -0.2% and -1.0% respectively. Near term outlook is for minor weakness early Friday, but the broader rally looks likely to continue across the month.


sp'daily5

R2K

Trans

Summary

Most notable index of the day...the R2K, with a daily decline of almost 1%. I'm not sure what to make of it. It has seen incredible strength since the Oct'2011 low, and yet now it remains somewhat weak.

The Dow did break a new historic intraday high of 16604, the 17000s look viable in May.
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Closing update from Riley



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a little more later....