Volatility lower for a sixth day

With equities rising for a sixth consecutive day, the VIX was naturally lower for the sixth day, settling -0.45% @ 13.19 (intraday low 12.90). Near term outlook is for the VIX to trundle within the 15/12 zone until next Wednesday's FOMC.


vix'60min

VIX'daily3

Summary

*the daily closing candle was a reversal (hollow red) candle, but I can't take it particularly seriously. With 3 sig' QEs due across the next 5 trading days, equity bulls have just about everything in their favour.
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It remains a market without any fear. Indeed, it remains notable that the VIX only reached 17.85 in the last cycle - well below the early Feb' spike high of 21.48.

Right now, the 20s look ever distant, probably until June.
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more later... on those bullish indexes

Closing Brief

US equities closed higher for a sixth consecutive day, sp +7pts @ 1879. The two leaders - Trans/R2K, settled higher by 0.6% and 1.1% respectively. Notably, the Transports broke a new historic high. Near term outlook has first support in the 1875/70 zone, with easy upside to the upper 1890s.


sp'60min

Summary

So..a sixth day for the bull maniacs, and all those holding from last weeks low of 1815...some 64pts lower...urghhh.
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The recent retrace zone target of 1850/40s now looks out of range. At best, equity bears might see 1875/70 early Wednesday, before the next QE fuel kicks in.

As I noted at the weekend, the R2K/Nasdaq had very clear spike-floor weekly candles, and those bode for at least few weeks of upside, taking us into May.

Frankly, anyone trying to play micro down cycles is surely wasting their time. Primary trend is currently up!
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more later..on the crushed VIX

3pm update - day six for the bull maniacs

Regardless of any closing hour micro sell down, the bulls look set for a sixth consecutive day of upside. Most notable is the new historic high in the Transports, with the Dow/SP' set to follow within the near term. The VIX continues to reflect a market that has zero concern about anything.


sp'60min

Summary

The hourly MACD cycle is offering a rollover for early tomorrow, but really, at best...maybe 1875/70..and from there.. a weekly close in the 1890s.
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I realise for many out there, these are difficult days.

There is the FOMC next Wednesday, with QE Taper'4, but really, does anyone still think <1814 in the near term, really?

*I remain content to watch the lunacy...from the sidelines.


3.14pm, minor weakness..with the hourly cycle rolling over into the close.

Regardless, my recent target of 1850/40s is dropped, and at best..maybe we'll test 1875/70 tomorrow morning..before the next QE fuel kicks in.


3.20pm.. rolling rolling rolling.

Anyone getting overly exited yet at the prospect of a down cycle from 1884 to 1875/70?

Urghh


3.27pm.. VIX battling for a positive close...with sp'1881..

I'd have to guess, early Wednesday weakness, before upside, which would make for 7 up days.

I was looking at the QE schedule, 3 'moderate' days, of the next 5 trading days. Bears...beware!


3.35pm... Market continues to slowly slip...although VIX is still red.

Notable weakness: Oil -1.75%..which is a pretty sig' drop.



3.41pm.. oh noes..we might close <1880....! The horror.

Actually, more than anything, I'm looking forward to next Wednesday, things might get interesting then, although the weekly cycles are still suggesting we'll battle upward.


3.47pm... and the VIX turns positive..first time today.


3.54pm.. notable weakness in the coal miners, ACI, Arch coal -8%....the next to implode?

back at the close...

2pm update - a peek at the weekly

Whilst many get lost in the minor intraday noise, the bigger picture is pretty bullish. With the Transports breaking new historic highs, and the Dow/Sp' set to follow, there is nothing in the near term for the equity bears to look forward to. Metals and Oil remain weak, Gold -$8, with Oil -1.6%


sp'weekly8

Summary

Suffice to say...green candle'2..trend is UP.

Who wants to short this?
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2.07pm. Hourly index cycles starting to rollover again. I suppose there is minor downside to 1875/70 zone, but that doesn't merit any real attention.

Any earnings at the close I should be aware of?  I'm trying to steer clear of clown finance TV.

1pm update - the algo bot melt continues

Mr Market appears to be in algo bot melt mode, with the indexes crawling very slowly, but consistently higher each hour. Metals and Oil remain notably weak, Gold -$8, and Oil -1.6%. VIX remains crushed, battling for a daily close in the low 13s.


sp'60min

Summary

Little to add, on what looks to be the old algo-bot..upward melt.
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Weekly charts are offering the upper sp'1890s in the immediate time frame.

sp'weekly8

Nothing bearish there, unless we break <1814, and that sure doesn't look likely for some weeks.

12pm update - new historic high for the transports

The 'old leader' - aka, Transports, has broken a new historic high, and is now the primary warning that other indexes will follow in the days..and weeks ahead. Indeed, the Dow is less than 100pts from breaking a new high. Metals and Oil remain notably weak, with Gold -$10, and Oil -1.7%


Trans, weekly

GLD, daily

Summary

*First, regarding Gold. A break <122, should open up another $40/50 downside, and frankly, the 2013 lows look set to be taken out. I realise some will be seeking an IHS price pattern, but really...no.
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For me, the only issue is whether we'll see Trans 8k in this new multi-week up wave. It seems viable by late May/early June.

Indeed, best guess right now, we'll see the next rollover in mid June..that is two FOMCs away.
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VIX update from Mr T.



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time for tea..and some reflection on the lunacy...that continues.

11am update - equities battling higher

The US markets remain somewhat quiet, but the trend is clear, with the sp' breaking into the 1880s - a mere 1% from the historic highs. The 'old leader' - Transports has already broken a new high. Metals remain weak, and are slipping away, Gold -$8


sp'daily5

GLD, daily

Summary

Metals sure look ugly on ALL cycles, and that sure won't help the miners. GDX -0.6%.
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As for equities, hopes of a minor retrace to the 1850/40s are fading fast, and with sig' QE tomorrow, those bears trying to short a micro decline are in trouble.
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Notable strength across most of the momo stocks, esp. TSLA +5%

10am update - opening minor gains

The 'fed minutes' high of sp'1872 is decisively broken, and there is now open upside to the 1880/85 zone - as early as today's close. VIX remains crushed in the low 13s. Metals are a touch lower. Notable weakness..Oil, -1.4%.


sp'60min

USO, daily

Summary

*I was watching the NFLX calls at the open, seeing how they reacted. Most May were up 40/50% or so, but they lost most of those gains within 5/10mins.
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Worse case now for those in bear land. We put in a daily close >1872...and with sig' QE tomorrow...we'll just keep pushing higher for rest of the week.

I realise that is a near nightmare to some out there. As ever, trading stops are the primary solution.
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As for Oil, it looks pretty ugly on the daily charts, with a black-fail candle just 3 days ago. Next support, 36.50s, another 2% lower.
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10.02am.. New historic high on the transports...7700s...8k by mid June ?

What is clear...ZERO downside pressure, and price action looks like algo-bot melt mode, which could last for days...if not weeks.
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10.11am. Am just checking on the SPY put chain for May. The disturbing thing is seeing the 186s, having lost 35% since yesterday morning.

A 0.8% index gain, with he puts whack -35%. The horror!

I'd guess those holding short via June, have lost around half of those numbers.

Point is, daily/weekly charts are offering 1890/1900 in the immediate term.

There is NO downside power, is there?


10.29am.. market appears in melt mode. A close in the 1880s..now very likely.

With sig' QE tomorrow, bears should be well out of the way.

Pre-Market Brief

Good morning. Futures are fractionally lower, sp -1pt, we're set to open around 1870. Metals are a touch higher, Gold +$1. Equity bulls are clearly what is soft resistance at the 'fed minutes' high of 1872. There remains possibility of a retrace to the 1855/45 zone, before the 1900s in May.


sp'daily5

Summary

So, the market is set to remain stuck under the 1872 high from two weeks ago. Hourly cycles are still suggestive of a down wave, but perhaps prices will merely consolidate sideways, rather than actual minor declines.

Indeed, this one primary reason why I'm not even going to attempt a minor index short at this 1870 level. Overly risky in my view. What I would consider is an index long, somewhere in the 1855/45 zone. That certainly seems viable.
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Notable early mover: NFLX, post earnings, +7% in the $370s. There will be pretty stiff resistance in the 380s.

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Video update from Mr Permabull



Not surprisingly, Oscar is bullish for today, and keep in mind, he has a primary target of ES 1980 or so in the current cycle, with sp'2100s 'eventually'. I can only hope we see the 1600/1500s, before the latter occurs.
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Good wishes for Tuesday trading.


9.13am.. sp +1.5pts...we'll break the 1872 high...and that opens up another 10/15pts.

Regardless, I don't intend to short this, price action just doesn't favour the bears in the bigger picture..yet.

Notable weakness: Oil, -1.1%

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9.57am.. and that is why I can't short..whilst the primary trend is to the upside. Overly risky.

VIX set to lose the 13s, if sp'1880s.

Tuesday can only be more lively

The market week began in a very subdued manner. With very low trading volume, the market moved into slow motion algo-bot melt mode. The weekly cycles are offering the sp'1890s in the immediate term, with 1900s viable in early May.


sp'weekly8

Summary

Urghh, today was pretty tedious, and congrats to anyone else out there who managed to stay awake during the entire day.

Today was the fifth consecutive daily gain for the sp'500, and those who are still short, are really getting burnt, not least the options traders.
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Looking ahead

Tuesday has a few pieces of housing data, along with the Richmond Fed manu' index.

*next sig' QE is Wednesday
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On the sidelines

I am more than content to do little right now. I can't be short, not with the recent price action, and with the daily/weekly charts, back to outright bullish again.

I realise some are looking for another major wave lower. I just can't see it. Right now, I think bears will be lucky to see 1850/45 Tue/Wednesday. For the bulls, that would make for a very natural buying level, and I'm certainly considering it.

To be clear, I'm still seeking a major wave lower (primary downside would still be sp'1825/1575), but the next opportunity for that, looks to be no earlier than mid June.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately higher, sp +7pts @ 1871. The two leaders - Trans/R2K, settled higher by 0.7% and 0.4% respectively. Near term outlook offers minor downside, 1850/45, but there is underlying upward pressure, to the sp'1925/50 zone by late May.


sp'daily5

Summary

Little to add on what was a very quiet day.
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a little more later...