Thursday 17 April 2014

Volatility crushed into the Easter weekend

With equities continuing to rebound, the VIX melted lower into the weekend, settling -5.8% @ 13.36, the lowest level in two weeks. Across the short 4 day week, the VIX declined by a very significant -21.5%.





Suffice to say, it is pretty amazing to see how the VIX has whipsawed from the upper 17s, to the low 13s.

We're right back to a historically low level in the VIX. As some might legitimately argue..the only way from here is up.
more later..on the indexes

Closing Brief

US indexes closed moderately higher, sp +2pts @ 1864. The two leaders - Trans/R2K, both settled higher by around 0.5%. Near term outlook offers a small chance of a retrace to 1850/45, but with likely upside across sp'1900s.



..and that concludes another twisted week in market land.

I am absolutely mentally..and emotionally exhausted from this. If there is one good thing I've done this week, it was bailing late Tuesday, which now seems like a 'miracle exit'. I sure don't mean to gloat, but I am pleased I was overly twitchy, and made a run for it.

I am most thankful to all those who made comments/said hello this week, it makes ALL the difference. For the record, it was the busiest week ever in terms of visitor numbers to these pages.

Have a good Easter everyone, its the weekend!

  your resident Permabear

3pm update - opex chop for the Easter Bunny

US indexes look set for subdued price chop into the close. A long 3 day weekend is ahead, and there is little reason why we'll close anywhere different from current levels. A weekly close in the sp'1860s would be a major victory for the bull maniacs.



I think the above chart says it all. Keep in mind, we had a second red candle for Mon/early Tuesday, and many - even the bulls, were largely resigned to a brief foray <sp'1800. we are..on the edge of breaking into the 1870s...testing the fed minutes high of 1872.

As ever..this remains a fiercely nasty market. 

I should note though, I still think there is very high probability of a major multi-month decline this year, but clearly....May now looks to be largely bullish.

Notable weakness in the metals, Gold -$7

3.24pm.. A weekly VIX close in the 12s ?   Incredible, but then, even the low 15s seemed 'low' just two days ago.

3.34pm.. woop woop... you crazed bull maniacs!

1pm update - the melt continues

US indexes are all trying to close the week in the green, sp +2pts @ 1864. VIX remains crushed, -5% in the 13.50s. Metals are melting lower, Gold -$5



Hourly MACD cycle rolling over, but prices are melting higher. For the bears, this is really tough price action to stomach.

A difficult day for yours truly, and I ain't even in any positions.  Maybe I am suffering from post blood-moon depression? Hope the rest of you are better.

-- it another  hour already?

I'm busy..time for a late

2.26pm... (why start another post eh?)

Market making a play for the 1872 high.., and we're now around 55pts - 3% from the earlier low this week.

Notable strength: UGAZ +12%. , Nat Gas catching a fear bid, or am I missing something else?

2.30pm.. Anyone watching CNBC Europe ?

The wondrous Lady Chatterley is being shown 'attempting' her little euro summary report, but it doesn't end so well for her. A little cursing, and then a restart..and then fade to black.

Bullish European presenters.

12pm update - tired

Despite a mere four day trading week, I'm frankly... exhausted. The sp' failed to break <1800, and the 1770/60s are now around 100pts lower. It would seem likely that the sp' will break >1897 by early May. VIX is melting lower -4% in the 13.50s. Another week for the bears to forget.



The broad chop continues, with underlying upside pressure.

I do realise for many out there, there are still hopes of near term downside (even below 1800), but not me. I wish I could, but no. Price action does not support it.

VIX update from Mr T.

time for tea..or a walk..or something

11am update - sleepy Thursday

US equities continue to see mixed chop, with a minor up wave to the mid sp'1860s. Next upside target is the Fed minutes high of 1872, but that looks out of range today. VIX is utterly crushed -3% in the 13.60s. Metals are melting lower into the long weekend.



I'd certainly think there is chance of a minor down wave next Monday to 1850/45, but really, that should hold as good support before market makes a play to break new highs into end month.

Notable weakness in the coal miners, BTU -1.4%

*I remain content to be on the sidelines across the Easter weekend. Will seek to pick up an index-long next Monday.

*Just noticed... UGAZ +10%, more concern over Putin remarks about gas prices?

10am update - minor weak chop

US indexes are already seeing some typical opex chop. Most notable, the VIX -2% in the 13s - a clear 4pts below the 17s we saw Mon/Tuesday. Metals are a little lower, with sig' net weekly declines.



There is little reason why we won't see continued minor chop for the rest of the day. Certainly is a touch of weakness out there - for a minor down wave.

So long as the bulls can hold the low 1850s, the week looks set to close in a pretty bullish manner.

I am on the sidelines, kinda tempted to pick up an index-long block, but then...a long weekend ahead, will likely wait until next Monday.

There is no reason why we can't open a little lower next Monday, somewhere in the 1850/45 zone..which should hold before renewed upside.

notable strength: TWTR +3%

10.20am.. chop chop chop...only another 5hrs 40mins to go of this.

10.40am.... new level is the 1872s (fed minutes spike high).

It sure feels a tiresome day though, and I am not getting involved.

Notable weakness in the coal miners, although that has generally been the case since 2011 !

Pre-Market Brief

Good morning. Futures are a touch lower, sp -1pt, we're set to open at 1861. Precious metals are flat. Equity bulls could sustain a daily/weekly close in the 1850/45 zone, without doing much damage to yesterdays channel break.



*post earnings reaction, IBM is -4%, GOOG -2%. Would not surprise me to see both close marginally positive.

Having read around a bit, I'm somewhat bemused at how bearish some still are. We have a down channel - from the sp'1897 high, that is clearly broken, and we've seen the sp' put in 3 consecutive daily net gains.

Further, the VIX is again crushed, and that certainly supports the notion of a rally into May.

I'd actually consider picking up a small long-index block today, but then...a 3 day weekend, and I probably won't. To be clear, I currently have a 'no shorts, unless sp'1814 low is taken out' rule.

I realise some of you out there are still resolutely bearish, but really, I think yesterday's gains were pretty decisive.

Tis almost the weekend..thank the gods.

9.21am.. all those getting excited at the GOOG decline last evening...well, its just -1% right now. 

9.40am.. RED indexes.....RED VIX.. in the 13s.

Doesn't bode well for the equity bears. 

Normal service resumes

The bull maniacs have achieved a pretty decisive cyclical turn with a daily close of sp'1862 - a full 14pts above the 50 day MA. With the VIX back in the low 14s, everything has turned back to the bulls in the space of just a few days. For the bears, the Easter break can't come soon enough.



*I've removed all counts/labels from weekly'8, in many ways, that is probably a good idea. What matters is the broader trend.

So...we've swung from a second red candle...and we're now outright bullish again, with a disturbingly strong green candle. Frankly, it looks to be a case of 'game over' for the equity bears. New index highs (at least for most indexes) look likely in May.

Looking ahead

With Friday closed, tomorrow will be opex, so expect some chop. We do have the usual weekly jobs data, and the Phil' Fed survey at 10am.

Earnings from GOOG and IBM annoyed the market in Thursday AH trading, but the broader market should be fine regardless.

*next sig' QE-pomo is not until next Monday.

Avoiding the bear carnage

I realise for many bears, today truly sucked. Even the opening 90 minutes was something of a tease, where we saw some opening black-fail candles (on a few indexes), and there was even an opening VIX reversal candle.

Yet, across the day, the price action was pretty strong to the upside. Every little tick lower was being bought, and it was not surprising to see the market close at the high of the day.

I will not consider going long an index until next Monday, as I have little interest in getting involved ahead of a 3 day weekend. Right now, I can't conceive of any re-shorts until late May/early June. It is not the best of thoughts, but at least I didn't get nailed today.

Goodnight from London

Daily Index Cycle update

US equities saw significant gains for most indexes, sp +19pts @ 1862. The two leaders - Trans/R2K, settled significantly higher, by 1.7% and 1.1% respectively. Near term outlook is now bullish into May, and the sp'1925/50 zone looks a relatively easy target to hit.





So, here we are again, and with the daily close above the 50 day MA of sp'1848, it looks pretty decisive to me. Yes, the R2K and Nasdaq are still weak, but they did manage important gains today.

Underlying MACD (blue bar histogram) cycle is set to go positive in 3 or 4 days, and with 2 days of sig' QE-pomo next week, everything is turning back to the bulls.

I sure am disappointed by the lack of the sp'1770/60s in the recent down wave, but the trend has clearly turned, and that target zone now looks unlikely to be hit for at least 2 or 3 months.

Closing update from Riley

a little more later...