Thursday 29 May 2014

Volatility stuck in the 11s

With US equities holding moderate gains across the day, the VIX was naturally under constant downward pressure, settling -0.9% @ 11.57. Near term outlook is for the VIX to remain in the 13/11 zone until mid June.




Little to add.

VIX remains low..and even the mid teens look tough to hit for another few weeks.

Once the bigger weekly cycle starts to tick higher..then I will start to consider a VIX call block for a summer/autumn play...until then...I am content to wait.

more later..on the indexes

Closing Brief

US equities resumed higher - despite a dire revised GDP reading, sp +10pts @ 1920. The two leaders - Trans/R2K, settled higher by 0.4% and 0.3% respectively. Near term outlook offers minor chance of a retrace to 1902/00, but more likely...1920/25 zone to start June.



Remember all the talk about how sp'1897 was a key high...ohh, then but it became 1902...that would be the top.

...and here we are...still pushing upward. This is of course especially impressive considering the latest key GDP print of -1.0%.

On any basis..the market should have been smacked lower by such a large miss - even below expectations of -0.5%.

Just a year or so ago, the market would have been whacked sharply lower on such bad data..but no..not in this 'new normal'.

* I remain content on the sidelines. I'll be tempted to launch a major index short around the next FOMC of June'18.

more later..on the VIX

3pm update - weakness into the close?

US indexes have broken new index highs, with sp'1917s...pretty incredible to see. VIX looks vulnerable to turning red, but then...11.70s...11.60s...does it really matter? Metals remain weak, and look set to close lower for the fourth consecutive day.



*battling to catchup on emails....

Well, ALL the smaller index cycles are due to fall into the I had to take a trade..I'd be short.

*as it is..I remain content on the sidelines. I can't short with the weekly cycles as they are.

updates into the close..especially if we start to slip lower...although as I type...there is ZERO sign of this madness levelling out yet.

3.24pm... Bears getting sequentially short-stopped OUT...hence the current gains.

ZERO downside pressure..thus..we go up.

Nasty market...I least I'm not sure.   I live to fight another day.

3.41pm.. VIX fractionally lower.... and sp' 1pt below the high....the humanity of it!

Notable strength in the drillers.. DO, RIG, SDRL,..with the latter having results at the Friday open.

..and CNBC rolls on 'end of the world' doomer... the Schiff.   

3.54pm... flowers to the clown TV host.....and why not?

A close in the 1920s...just about viable....

back at the close.

2pm update - afternoon minor mess

US equities are holding minor gains, but those were more than enough to break new historic highs in the Transports and sp'500. The broader up trend most certainly continues..with 'small' risk of a retrace back to the 1902/00 zone. Metals remain weak, Gold -$3.

R2K, daily


R2K building a bull flag on the daily?

I'm certainly not buying at this level, I'd consider 1130/25...but there only looks to be a small chance of that.

After all, if GDP -1% can't kick the market lower, what can?

How about 'end of the world'? But that is bullish construction sector, yes ?

*Just email client has not been sending me notifiers all day..urghh.....bear with me

2.26pm.. We're coming up to the typical turn time of the afternoon.

ALL smaller cycles are now over-stretched to the upside....90minutes for 'weakness into the close'.

A full reversal here would be kinda interesting...

For the day-traders out there...I'd guess it makes for a valid trade..but with a nano-tight stop!

1pm update - churning

US indexes continue to hold minor gains, with the Trans/SP' having broken new highs. There is next to zero downside pressure, and with GDP out of the way..the bulls have a clear run until the Friday/monthly close. Metals remain broadly weak, Gold -$3



I realise some will be looking to launch an index short, not least in the 1920s..but really..whats the best case downside..15..20pts..if that?

Truly tiresome

Notable strength, the drillers. especially SDRL, but then..recent price action remains somewhat choppy.

1.33pm... another nano sized bit of weakness....

..but really...overly risky for those on the short side.

12pm update - QE fuelled nonsense

The second sig' QE-pomo of this short week, is no doubt negating what little downside pressure there is. Even the R2K (persistently susceptible to weakness) is moderately higher. Metals are fractionally lower, but look very weak into June.



I suppose if I stared at the sp'500 daily chart long enough, I'd almost want to short..except...


On any basis..trying to short into that sort of multi-week up plain stupid. Even I can see that.

VIX update from Mr T

50 cent strikes...indeed, but I sure ain't buying. 
time for tea

11am update - minor choppy mess

US indexes continue to hold minor gains, and despite some apparent weakness (most notable in the R2K), the market is still showing the underlying upside pressure. Metals remain weak, Gold -$2, although mining stocks are bouncing, GDX +0.9%.



A bit of a messy morning.

Bears are being teased..but..with the is just so difficult to even slip a little.

No doubt, the GDP reading will be something many will dwell on into the weekend..and right now, I find it hard to believe Q2 will be much better.

Q2 reading will not be issued until late July of bulls have a relatively clear run until then.

Notable strength: AAPL, +$4 @ $628...with the stock split due next week (I think).

time for an early lunch

10am update - opening minor gains

Equities open moderately higher, with new historic highs (yet again) for the Trans/sp'500. VIX is a touch lower, but managing to hold the 11s. Metals remain weak, Gold -$3, with Silver -0.4%.



*I was looking for a black-fail candle to start the day... and as at 9.54am...R2K has a BLACK-fail candle.

With a barrel of QE fuel due to appear this morning..bears face underlying upward pressure.

In theory..we could close today in the 1920s..which would certainly bemuse the mainstream, considering the lousy (and it WAS lousy) GDP data.

I remain on the sidelines. I can't short (not least with the weekly cycles pushing up)... but I can't go long.

Yeah..trader paralysis....although at least I'm not losing money on the short side.

10.38am.. R2K turns of the market...probably to follow.

Primary target is sp'1902/00...with R2K 1127/25

Pre-Market Brief

Good morning. Futures are a little higher, sp +3pts, we're set to open at 1912. Precious metals remain weak, Gold -$5. A minor retrace remains viable, back to the 1902/00 zone, before the 1920s next week.



*awaiting second reading for Q1 GDP

There is reasonable chance of a minor retrace today, but then, the broader trend still remains to the upside. A minor fall to 1902/00 - where there is a rather obvious gap, would be a viable area to go long.

There is sig' QE-pomo even if the market is moderately lower by late morning..the bears will likely face a latter day recovery.

Video update from Mr Carboni

Like him or not....he has been especially right on Gold.

Notable early strength: TWTR, +2.7%

8.31am.. GDP revised from +0.1%... to -1.0%.... real ugly number, but market doesn't much care. After all, rest of the year is going to be rainbows and unicorns..yes?

9.00am.. So..once again, all that doomer chat about 'ohh, lets short, because GDP will be bad' amounts to nothing.. with sp +4pts.

Ohh, sure we could still fall as the day proceeds, but the QE will negate most, if not all of what little downside pressure there is.

9.32am .. I think we're headed a little lower...

seeking an opening black candle on the hourly index charts...

I won't short..but sp'1900 might make for a valid buying level.

Mr Market grinding the bears into dust

With the sp'500 and Transports breaking new historic highs, those equity bears who have been short since the Feb' low continue to be ground into dust. With the R2K flooring in the 1080s last week, it remains highly suggestive of at least a few more weeks higher.



So...SEVEN consecutive green candles on the weekly chart, and anyone shorting shorting into one hell of an up trend.

Where will it stop? The sp'1920s look likely next begin June. The 1940/60 zone looks viable in mid June - around the time of the next FOMC.

Yet...maybe even higher? There are a few out there touting 'straight up..into the sp'2100s' in the current multi-month up wave (from Oct'2011).

Personally, I'm still seeking at least a 2-3 month wave lower this year..but hey..the months are already running out this year!

Looking ahead

There is the usual jobs data, but far more important...the second reading for Q1 GDP. Market is expecting a downward revision to -0.5.

*there is sig' QE-pomo of around $3bn, bears...beware.

Just another day

It remains a truly tiresome market. The recent floor in the R2K/Nasdaq remains an issue I am still battling to assess. Was it merely the HEAD of a H/S now formed in the R2K, or was it just a giant 12 week down wave...with a far bigger multi-month ramp to new highs?

R2K, weekly'2, H/S

Well, the H/S scenario will indeed get dropped on any break into the 1200s....that is only 5% higher.

I will hopefully be around tomorrow, I suppose you could request a refund, but don't expect a reply.

Goodnight from London

Daily Index Cycle update

US indexes closed somewhat mixed. Most notable, new historic highs for the Transports (8102) and sp'500 (1914). The two leaders - Trans/R2K, settled +0.7% and -0.5% respectively. Near term outlook is for continued broad market upside into mid June.





Little to add.

ALL indexes are broadly trending higher, and the Feb' low of sp'1814 is around 100pts lower. The weekly/monthly charts are both suggestive of higher levels into June..possibly July. As a fair few are suggesting, the sp'1940/60 zone looks very viable, before this madness finally does max out.

The longer this goes on..the sharper the down wave will be.

a little more later...