Wednesday 18 June 2014

Closing Brief

US equities saw minor chop across much of the day, but closed relatively strongly, sp +14pts @ 1956. The two leaders - Trans/R2K, settled higher by 1.5% and 0.5% respectively. Near term outlook offers broad upside into the Friday quad-opex close.




*I exited my index-long block, around R2K 1179. I continue to hold CHK and WFM, both of which I will look to exit into the Friday close.. if prices are 'reasonable'.

So...another Fed day is over..and there is nothing much now until late July'30, GDP Q2 data - which is interestingly, also the date of the next FOMC. Hmmmmmmm

For those broadly short..I realise today was a lousy one.

I am very open to a moderate down wave from 1960/70..beginning next week... down to 1900, but broadly....there still looks to be upside into mid July. 1990s would be a viable target.

I'll post a daily wrap (esp' with some VIX details) later 8pm EST.

3pm update - post Yellen weakness?

Equities continue to see some moderate chop, with the smaller 5/15/60min cycles somewhat bearish into the close. Daily/weekly cycles are pushing upward...and that remains a problem for anyone broadly short. Metals hold moderate gains, Gold +$3, whilst the USD is lower by just 0.1%



*micro 5min cycle is offering a spike top...

I bailed on my R2K the equiv' of sp'1948...which I'm more than content with.

Coming up............ Spain vs Chile.. .3pm EST.

updates into the close.............

2.59pm..  I'm now wondering if WFM has finally floored...

I'm still seeking the 43/44s..but its taking a lot longer than I thought. Hourly looks like a turn is viable.

3.04pm.. Not looking good for those in bear land...

No downside pressure...

VIX getting crushed.. -8% at 11.10..       VIX 10s...viable for the close...with new index highs.

3.06pm.. VIX 10s....first time since early 2007.

sp'1952...and the notion that the recent few days were a bear

3.09pm.. R2K breaks 1180.....

Game over bears..... game over.

Not only was it not a bear flag...we're set for new index highs...and VIX 10s are already confirming such an assertion.

3.19pm... with no downside power...we're just in melt mode...a mere 3pts from breaking a new high on the sp'500.

Trans...sig' gains of 1.1%

3.20pm.. Goalllllllllllllllllllllllllllllllllllllll    Chile......

bearish... SPAIN !

3.26pm... my remaining two stocks... CHK and WFM... turning green.   My aim would be to drop both into the Friday close....if 'reasonable' price levels.

Poor Spain.....  poor bears....not the best of days for either.

3.38pm.. sp'1954...real close to a new high..which even to kinda disturbing to see.

WFM is green..and a clear 50 cents above the earlier (washout?) low.... more on that one..after the close.

3.44pm.. New historic high on the sp'500.... with the R2K and other indexes set to follow.

2pm update - time for QE taper 5

US equities continue to see very minor churn into the FOMC announcement. What will matter is how Mr Market perceives Yellen in the subsequent press conference.



*price action is bullish.... price structure is...offering a possible bear flag. So... the remaining two hours of the day will be somewhat important.

Well, QE taper'5 is expected.... I'd be real surprised if they don't.

*The Yellen will appear sometime around 2.30pm.

2.03pm... QE taper... as expected.

Indexes look relatively stable...and now its case of what Yellen has to say.

2.12pm.. choppy indexes, but there sure doesn't appear to be any downside power.

Unless Yellen says something really stupid about int' rates....equity bears are going to have problems all the way into the Friday close.

2.23pm.. R2K making a play to break the key 1180 line. If so...then 1190s..within 1-8 trading hours, and that'd be major confirmation of where we are headed by mid July.

2.32pm... I've a super tight stop on my IWM long..... if Yellen says anything marginally stupid...I'll get the kick for sig' gain on at least on that.

2.36pm... possible reversal underway....I think I'm about to get stopped out...


2.38pm... So, I'm outta my index long, but still holding LONG, CHK and WFM, will not be exiting them until sig' higher levels.

If market drops into early tomorrow, I will re-pick up an index block.

So...lets see how rest of the day goes....

2.44pm.. It does appear we have at least a moderate reversal underway.

Seeking weakness into early Thursday..and then UP into the Friday close.

2.49pm... Bears need a break <1940.. .to offer that bear flag.... hmm, will be tough... I don't see much downside pressure..other than minor cyclical retraces. far.. Yellen ain't said any stupid things.

1pm update - yet another hour of churn

Mr Market is very content to churn sideways ahead of the FOMC announcement. As many should realise though, how the market interprets Yellen in the afternoon press conference, that will be far more important than the fed decision itself.



Little to add....

We'll likely flat line for another hour...before some moderate chop.

back just before 2pm....and updates will be more and when necessary.

12pm update - time for a game

US equities remain in minor churn mode, ahead of the FOMC at 2pm. The decision - QE'taper'5 is the mainstream expectation, and market will indeed be more interested in what Yellen has to say at the press conf'.



Ohh, and I realise, many are still calling it a bear flag on the hourly..or even daily chart. could be.

Even then, whats the best case downside, 1910/00...and then. up up up.. into mid July. Either way, bears have little to look forward to for at least another month.

VIX update from Mr P.


In far more important matters...

Its time for Australia vs Netherlands... that will keep some busy until the press release at 2pm.

11am update - churning into the afternoon

US indexes are largely in a holding pattern ahead of the FOMC announcement at 2pm. Price action continues to favour the equity bulls, and there remains high probability of late day gains into the sp'1950s..perhaps even the 1960s if short stops start getting hit.



*VIX dropped into the 11s at the open, and remains very subdued. The daily VIX charts are offering 3-5 days of further downside melt.

For me, the R2K remains the clearer index, and is arguably leading the way higher. I certainly am seeking the 1190s later today, which would equate to sp'1950s.

time for an early lunch

10am update - much like the Tuesday open

US equities are trading very much like early Tuesday, an opening minor drop..but then a reversal. The daily cycle is offering the sp'1960s in the immediate term, and that is certainly viable today, as reflected in a VIX that has settled its opex in the 11s.



Long day ahead....

*I'm still holding Long, and remain seeking R2K in the 1190s.. at which point I'd start to lighten up.

back....after a walk... I need some air before the FOMC.

Pre-Market Brief

Good morning. Futures are effectively flat, we're set to open around 1942. Metals are a little higher, Gold +$3, whilst Oil is +0.2%. Equities look set for the sp'1950s today, whether we see new highs.. that is somewhat difficult to say.



So.. here we are.. another fed day, with QE set to be reduced to $35bn a month. What the market will more likely focus on is what Yellen has to say in the afternoon press conference (around 2.30pm). Will she inspire confidence, or will she say something stupid about interest rate increases?

*maybe its just me, but stockcharts appears to be down... again.

Video from Hunter, with a dollar doomer...

I disagree with the basic premise, but hey..listening to nonsense we object to. can be useful, if only to solidify our original view...right?

Good wishes for Wednesday trading

9.16am.. .stockcharts is BACK up!..    they were installing the lost data from last week.

Daily Wrap

US indexes saw a day of minor chop, settling with moderate gains, sp +4pts @ 1942. The two leaders - Trans/R2K, settled +0.4% and +0.8% respectively. Near term outlook is for the sp'1950s, if not the 1960/70 range if almost everything goes right for the bulls into Friday quad-opex.



*the attached count remains a best guess.. and yes, right now, we're still in sub'3...although I'd count the current wave (since the sp'1925 low) as an even smaller fifth. On any basis, I do NOT expect sub 1900s until late July at the very earliest.

So..with a daily close in the sp'1940s, we have seen the weekly 'rainbow' candle flip from blue to green. That makes for TEN consecutive green candles, which is pretty incredible.

I hold to a broader outlook of upside into mid July. From there, we are sure to fall, but... will it be just another small 4-6% retrace... or something more? I'm still keeping in mind that the spring weakness in the R2K/Nasdaq was a preliminary warning of trouble for the market this year.

Looking ahead

Tomorrow will of course be all about the FOMC announcement, due at 2pm. Yellen is due to host a press' conf. shortly after. The market - as am I, is expecting QE taper'5, taking QE fuel down to $35bn a month, beginning July'1st.

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

Holding long into the FOMC

Yours truly is holding a trio of long positions. CHK and WFM are both somewhat annoying lately. They have failed to continue climbing, but are perhaps merely in a 'coiling' stage. I'd settle for $31 and $43 respectively this week. I also hold an IWM call block, and seek an exit in the R2K 1190/1200 zone, which appears possible as early as late tomorrow.

R2K, daily

Generally, I don't hold any positions into a Fed day, so tomorrow will be kinda unusual for me, although I don't expect any surprises from the FOMC. So long as Yellen doesn't say anything 'stupid' about interest rates, the market should manage to battle to the upside.

Goodnight from London