Friday 11 April 2014

Volatility climbs into the weekend

With equities seeing continued underlying weakness across the day, the VIX held up strongly, settling +7.2% @ 17.03.  Across the week, the VIX gained a very powerful 22%. Near term outlook is for sp'1770s, which will probably equate to VIX in the low 20s.





Suffice to say, VIX is on the rise. The only issue is how high will the VIX spike when the sp' test the 200 day MA in the 1770/60s next week. The low VIX 20s seem a given, the only issue is whether mid/upper 20s.

The weekly VIX is suggestive of the usual resistance around the 200 MA, currently in the 18.70s.

Equity bears have not achieved a weekly close above the 200 MA since 2011. As it is, even if we do break into the low 20s next week, I'd be surprised if we close the week there.

more later..on the indexes

Closing Brief

US indexes closed the week in a poor state, sp -17pts @ 1815. The two leaders - Trans/R2K, settled lower by -0.9% and -1.4% respectively. Near term outlook is offering the 1780/60 zone by next Tue/Wednesday, which might equate to VIX in the low 20s.



*After a minor down cycle in the VIX, I decided to pick up 2 positions in the closing hour.

I am holding short the indexes, and long VIX, into next week. Seeking my next exit in the 1790/80s, with VIX 18/19.s

For me, it was a VERY frustrating day. The exit at the open was good, but the market never did bounce for long, and the declines are now somewhat relentless - although, much in the style of last Friday-early Tuesday.

The weekly candles look...DIRE. Bears look sure to command next week.

Have a good weekend.

*the weekend update will likely be on the US monthly indexes

3pm update - a weekly close for the bears

Regardless of any minor action in the closing hour, the equity bears are now assured of a very bearish weekly close. The weekly 'rainbow' charts will settle with a red candle, and that keeps open the door to 1770s next Mon-Thursday (Friday is closed).




It has been a busy week is likely going to be....somewhat wild.

Despite 3 'reasonable' exits, today feels like utter failure. I am not in the mood to chase this crap lower, not with the threat of a whipsaw higher on Monday (not that I expect that).

To all seems like a near total waste of time..for the effort involved. Oh well, at least I'm not long.

3.13pm.. minor weak chop...sp'1818...and a VIX in the low 17s.

Even chocolates are not helping my mood right now. Where is a gods damn bounce when I need one?

3.18pm.. bull maniacs trying to break a micro cycle upward...but..really.. how is it going to bounce now, unless some sort of mass short-covering?

So frustrating. The only level I'd consider a re-short into the weekend... sp'1827/30..maybe.

3.21pm.. Zerohedge speculating about a 3.30pm mini-ramp... .that sure won't be easy today.

Oh well, lets see if there is a brief short-cover cascade..but not long left now.

3.23pm... VIX on the 1821...but hell, that still makes for one major bearish weekly close.

3.26pm.. strongly considering..picking up a VIX block in 5-10 mins.

3.29pm.. LONG VIX from 16.90s  , seeking low 20s next Tue/Wed

3.33pm.. SHORT, via SPY, from sp'1820... seeking 1770s......


3.36pm.. I feel better now, lol. Ahh yes...back on the short is a warm and fuzzy feeling.

I will HOLD short across the weekend, via SPY puts and VIX calls....

seeking sp'1770s, with VIX somewhere in the low 20s... I suppose 23/25 is possible, if the market gets moody when it loses the 1800 threshold.

3.40pm... lets see how many of the rats sell into the weekend. After all, they know the 1770s are coming, why would they not sell?

3.49pm.. VIX back in the 17s....indexes a bit twitchy.....frankly...I'm exhausted..

3.52pm.. look at those rats SELL. They want OUT.

2pm update - another rally attempt

This has turned into something of a pretty interesting day to the bull maniacs keep attempting to push this market back up. What should be clear though.... the underlying pressure is now down. Equity bears should continue to seek a weekly close <sp'1838



*I remain on standby to pick up two positions... spy -short... VIX-long...before the close.

Plenty of time still, for the maniacs to give it one little wave higher...if only to 1832/34

2.03pm.. this market is really teasing the close to new lows... but no.

Key resistance, 10EMA @ 1832...

2.12pm.. the minor the low 1820s continues.

2.23pm.. NEW lows...and the 1830s..are slipping out of range... urghh.

2.41pm.. well, so much a re-short.  Seems utterly stupid to short here..with high risk of 1830s on Monday.

Such an annoying end to the week.

1pm update - shorting hour

US indexes are seeing what might well be a small ABC wave'2 bounce. Regardless of want you to call it though, with the key thresholds broken yesterday, any bounces..are bounces to be shorted. The only issue is what day next week we'll hit sp'1770...Tues', Wed'..or Thursday?



*I will be on full standby this hour to launch two new positions, which after some consideration, I will hold across the weekend.


bounce target: 1834/36, with VIX 16.25/00 (VIX is holding up very well today)

Stay tuned

1.08pm... sp'1823....hmmm.. if <1819...then...I guess I missed my bounce.

1.21pm.. yes, price action is weak, but I still have a hunch we'll one stupid little C wave ramp.

1.34pm.. holding the earlier low...just.

I am not interested in chasing this lower into the weekend....

I demand the 1830s !

1.40pm... another attempt to doubt..this is confusing many on clown finance TV (I have them on mute today).

12pm update - seeking a major re-short

US equities have seen a somewhat significant bounce from the early low of sp'1819 - with VIX 16.97. The broader thresholds are of course busted..and thus the default trade is (for once) to the short side. Right now, bulls look set to get stuck around 1838/40.. by 2pm.. with VIX 15.75/50



Not much to add...the bounce continues.

I've labelled it an ABC (sub'2), but whatever you want to call is just a bounce.

VIX update from Mr T


After some thought, I might carry over two trades across the weekend if we close flat. - of course, I have to pick up two trades in the first place!

Seeking SPY puts.. and VIX calls...within the next hour or two.

time for tea :)

12.20pm.. upside target now 1836/38 by 1.30pm... I do NOT expect the 1840s. feels like a Chess match.   ..and right now, I ain't got any pieces on the board.

11am update - natural bounce

US equities have seen an early floor of sp'1819 - with VIX 16.97, and are vainly attempting to rally. There will be stiff resistance in the 1835/40 zone this afternoon, and a red close still seems very likely. Equity bears should battle for a weekly close <1838.



Seeking an index re-short in the 1835/40 zone, with VIX in the 15s.

Right now, best guess..this latest bounce maxes out around 1-2pm, with downside into the weekend.

11.17am... on track....seeking 1838/40..within 1.5hrs

11.36am... still...on  track..... I'm calling it an ABC wave'2 bounce....seeking 1838 by 1-2pm

10am update - opening reversal

US indexes open lower, but the VIX has started the day with a very clear black-fail candle, warning of an equity rebound that might last 2-4 hrs. Regardless of any bounce, nothing has changed..the key thresholds were broken, and we're set for the sp'1770s.




*I EXITED both VIX-long positions in the opening 5 minutes, kicked from VIX 16.70s
-- high? Right now, maybe 1835/40.. by early afternoon, with VIX 15.50/25.

From how I see it, every bounce should be considered a gift.
- I wait. If we bounce..I'll pick up a SPY put block later..along with a new VIX-long block.

10.05am.. in my view... best bounce upside is the declining 10EMA..currently 1841.

10.10am.. market likely building a choppy floor..bears getting a second chance to exit

10.20am... STILL expecting a bounce...price action looks tired on the downside.

10.25am.. market WANTS to rally here...


Yes, its time for another yellow box

Pre-Market Brief

Good morning. Futures are moderately lower, sp -8pts,  we're set to open at 1825. Metals are a touch higher, Gold +$2. With the break <1837, and VIX 16s, equity bears are in control, at least for another 3-4 days. Primary downside target zone remains 1780/ next Wed', with VIX 18-22.

sp'60min'1b - holding under the 10EMA


So... what about today?  There is no scheduled news of note, and even though there is QE, it is not enough for even yours truly to get concerned about.

What is my plan for today?

I am looking to pick up an index short, for a day trade only...seeking a move from 1845/35, to 1815/10.

I will look to exit ALL short positions into the Friday close (that is just something I prefer to do, especially since I am an options trader).

I would still seek to pick up another index short/ VIX-long, next Monday..and trade on the short side until sp'1770s.

Video update from Mr Carboni

Oscar is now a seller of rallies, and it'd seem (although he did NOT say it) would probably be seeking a hit of the 200 day MA, which is Dow 15700s, with sp'1770s.

Yesterday was pretty entertaining. It was especially pleasing to see the bull maniacs get a smack down, not least after the stupid fed minutes bounce.

I will be frankly delighted with ANY weekly close <1838, which would give a closing RED candle on the 'rainbow' weekly charts...


A hit of the lower weekly bollinger is what I want to see. It would give clarity to the bigger picture, and offer up a large H/S - much like 2011. If that is the case, it is going to be an incredible summer, one that will make up for the last few years.

It will also be interesting to see how the cheer leaders on clown finance TV cope with the sp' back in the 1700s.

Sincerely..good wishes to all of you out there. The weekend is almost here!

8.42am.. I should note, I did see sp-11pts earlier, which would give 1822...just 10pts shy of a level many are now seeking.

Certainly..we could be 1815/10 today....whether sub'1800 Mon/Tuesday..doesn't concern me.

Right now, I'd look for VIX to open somewhere in the 16.50/17.00 zone.

9.10am.. sp -8pts... 1825.... I just wonder how the VIX will open.

I'd like to drop at least one of my two blocks..could probably buy back later in a few hours...along with an equity short block.

Regardless....we ain't opening higher. ;0

9.28am... set for the low 1820s.

9.32am. EXITED VIX block'2......might exit block'1...

9.35am... looking to get kicked on second VIX long (will likely buy back later today)

9.37am... tightened VIX stop...likely to be OUT within minutes

EXITED VIX block'1......

I'm am FULLY out...  seeking to pick up index short AND vix 2-4 hours

9.40am... BLACK-fail candle on the VIX.....equity bears...beware.

9.45am.. VIX turning set to rebound...1835/40 or so... within 2-4 hrs.... that will make for a superb re-short level.

Seeking the 1770s

With the break of the sp'1837 low, the door is now wide open to much lower levels. Primary downside target zone is 1780/60, which would provide a hugely important hit of the lower weekly bollinger band. If that is achieved, it will give great clarity to the next few months.

sp'weekly7b - H/S doomer-bear outlook


The above chart remains the ultra doomster outlook.

The H/S is NOT valid in my view, unless we get pretty close, if not an actual hit of the lower weekly bollinger band, currently in the low 1770s.

Any break into the 1760/50s..and I'll have HIGH confidence of the next few months, with broader summer downside to sp'1625/1575.

Looking ahead

There is nothing scheduled tomorrow.

*there is sig QE-pomo of around $2-2.5bn, which should not concern the equity bears, considering the break of sp'1837 and the VIX 16.00 threshold.

Riding the wave

I bailed overly early on my index short today, but I still have a nice VIX-long position, and picked up a secondary VIX-long block in the closing minutes. For me, it was the best trading day in quite a while.

More than anything, I want to see the sp'1770s, not for reasons of profit, but because it would give clarity (at least to me) of the next few months.

The aim would be to ride a bounce from the 1770s to around 1850 - for a right shoulder in May, and then a collapse wave sometime in July/August.

I have a lot more to say on that...but for now..lets see if the bears can break 1800..and hit the 1770s within the next 3-4 trading days.

Goodnight from London

Daily Index Cycle update

US indexes closed sharply lower, with the sp -39pts @ 1833. The two leaders - Trans/R2K, closed lower by a very significant -2.1% and -2.8% respectively. Near term outlook is for the sp'1780/60 zone, which would give clarity to the bigger picture for the summer.





A fiercely bearish day, and the two day bounce was indeed...a bounce.

We have the headline indexes now headed for their 200 day MAs, Dow 15700s, and sp'1770s. In my just a matter of how many days it takes..rather than 'if'.

*I remain short the market via VIX-long, seeking an exit in the 17/18s, if not the low 20s.

Closing update from Riley

a little more later...