Monday 21 April 2014

Volatility melts lower

The VIX opened higher, but with an opening black-fail candle - seen best on the hourly cycle, it became clear that the market would likely remain subdued. VIX settled -0.8% @ 13.25. Near term outlook offers small chance of VIX 14.50/15.00, but then further declines, with sp'1900s.




A very quiet day.

Today's opening candle was yet another good example of why I often highlight the black-fail - or red reversal candles. Often they are good indicators of where the market is headed for the rest of the day.

As things are, equity bears have little downside power, and I do not expect sp<1814 for at least 2-3 months.

more later..on the indexes

Closing Brief

US indexes closed with moderate gains, sp +7pts @ 1871. The two leaders - Trans/R2K, settled higher by 0.7% and 0.4% respectively. Near term outlook offers minor downside (if at all), but with the sp'1900s seemingly a given..within a few weeks.



*awaiting NFLX earnings...will update as necessary.

So, a pretty dull day, Indeed, I'm kinda bemused that the US market even bothered to open today - whilst much of the EU was closed.

Have a good evening

more later..on the VIX


4.04pm.. NFLX earnings.. reasonable... but the stock is unstable...+4%... +3%.

4.14pm.. NFX +6%..and there remains very viable upside to the 375/85 zone tomorrow/later this week.

Certainly, it remains one of the cheaper things for the average USA/European consumer to subscribe to, and I'm still bemused how little their charge per month.

I'd have little doubt they could ramp prices to $15 a month, and most would still pay.

3pm update - awaiting the NFLX

A minor up wave, and equities are again trying to break the sp'1872 high. VIX is back into melt mode, -1% in the low 13s. Metals remain weak, Gold -$6. Earnings at the close, NFLX, currently +0.1% @ $346.



Suffice to say, a very quiet day, merely curious to see how NFLX earnings were.

My guess?  Better than expected, and I'd not be surprised to see the stock trading in the 375/385 zone in AH. Of course, whether it can hold those gains into tomorrow morning, that has often been a problem in the last few quarters for many of the momo stocks.

3.13pm.. Is it me, or are all momo stocks starting to catch a bid? FB, TWTR, TSLA, they're all significantly higher now.

At least something is going on today!

3.22pm... minor chop..but still...we're set to close higher for a FIFTH day, pretty impressive.

3.38pm.. notable movers... coal miners... BTU +4%, , whilst WLT -9% (downgraded by GS)

2pm update - the tedium continues

Equities are largely acting like the market is still closed. There is little of note, the only notable thing to look forward to are NFLX earnings. Daily charts are offering upside to the $375/385 zone - around 10% higher, - so long as earnings come in somewhat above market consensus.

NFLX, daily


Very lacklustre day.

For those in options land, it is notable to see another 10/20% of premium knocked off May/June puts. Those bears holding short across the weekend are having a real bad day, even if the indexes don't look so bubbly.

1pm update - are we even open?

It remains a very quiet day, with the market trading in a super tight 2pt range since 11am. Market appears stuck under the sp'1872 high, with viable downside to 1850/45 tomorrow, if not Wednesday. Metals remain weak, Gold -$8


GLD, daily


Little to add, on what is a dull day.

I am content to remain on the sidelines. Would consider a small index-long, in the 1855/45 zone Tue/Wed.

Awaiting NFLX earnings. I'd guess there is a fair chance for a jump to 375/85 zone. I looked at the options chain, but hell, those are pricey. Even the April weekly 370s are $9 or so.

12pm update - continued chop

It remains a somewhat sleepy day in market land, with half of the trader community seemingly not even turning up. Equities appear stuck under the Fed minutes high of sp'1872, with near term downside to 1850/45. Metals remain weak, Gold -$8.



Little to add, on what is a pretty dull day.

Hourly cycles still suggestive of downside into early Tuesday..1850/45.

Whilst the bigger daily/weekly cycles are pushing higher...

VIX update from Mr T.

time to get back to bed?

11am update - rolling over, if only a little

US indexes have got stuck just under the Fed minutes high of sp'1872. We're seeing a rather clear rollover on the hourly index cycles, with likely downside to 1850/45 zone by early Tuesday. VIX is clawing higher, but even the 15s look difficult.



So...minor gains..and now a rollover. Problem remains, there really isn't much downside power, and the QE is going to offset much of what sell side there is.

I suppose the day-trading bears might be shorting this - with a stop in the 1870s, but I'm...refraining.

For me, the only decent trade right now is long-index, from 1850/45..tomorrow.

11.23am.. minor up wave...kinda tiresome, and it does look like over half of the 'usual' people aren't even logging in today.

Oh well

10am update - minor chop to start the week

US equities open with minor price chop, but with the usual underlying upward pressure. Hourly index cycles are suggestive of downside later today/early Tuesday, but with sig' QE of $3-4bn, any weakness is going to be itself...weak in power. Metals are lower, Gold -$5



Relatively quiet, and as clown finance TV note, with many of the EU indexes closed, there isn't much going on.

However, there is NFLX earnings at the close of today, and that'll be interesting to watch.

Bigger weekly charts..upper bol' now into the mid 1890s..and 1900s will be viable by end month.


Two green candles...and the sp'1900s are less than 2% away.

10.03am... well, here comes the first attempt to clear the Fed minutes high of 1872.

10.06am.. There was a time when I'd be hitting the short-button right now. Yet, with daily/weekly charts as they I'd rather do nothing. 

Default trade is surely to the long side. I'd only drop that outlook on a break <1814, and that is now 56pts lower - a good 3%.

10.15am.. indexes look stuck.  VIX hourly wants to snap higher.

So..1870.. down to 1850/45, by early tomorrow?

10.21am.. its slow, but we are rolling over. Makes for an easy short-side trade, with stop of 1870/73

10.45am..choppy, but the weakness is there.

I still have to think, bears are going to get a chance to exit 1850/45..before a move to the 1900s in early May.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1866. Metals are weak, Gold -$10, with Silver -1.6%. Equity bears should be seeking a minor retracement today, to 1850/45, but that will be difficult with sig' QE-pomo of $3-4bn.



It is a tricky day to call. Yes, the smaller cycles are all maxed out, and we're due to slip moderately lower. Yet, there is sig' QE, but more than that, the daily/weekly cycles are back to bullish.

As noted at the weekend, all things considered - not least the weekly spike-floor candles for the R2K/Nasdaq, we will surely see further net gains this week.

It would seem unlikely that we will break sp'<1800 before late the earliest. I realise for those still holding on the short from side from 1814, that is not the most inspiring of thoughts.

Update from 'oldschoolchartist'

I don't often highlight the above poster, but I do keep an eye on his outlook. He is certainly not particularly biased, and that is always a good thing!

Have a good week everyone!

8.52am.. indexes turning negative, sp -1pt,  1863

9.21am.. minor chop to start the week, lets see if we can get a rollover on the hourly cycle, but still..with will be difficult today.

9.43am.. minor chop indeed, and no doubt, many are getting confused.

Hourly cycle...pressure down.

On balance, you'd have to go with upside, right?   $3-4bn of going to help.