Tuesday 24 June 2014

Volatility battling higher

With equities seeing a rather significant afternoon reversal from sp'1968 to 1948, the VIX spiked higher, settling +10.5% @ 12.13. The VIX is likely to get stuck in the 12/13s, with the mid teens looking out of range in the current up wave.




Suffice to say, an interesting late day mini surge in the VIX, but indeed... equity bears need to keep in mind we are only dealing with a VIX in the 12s.

So long as sp'500 can hold the 1930s...VIX will be unable to break much higher, and will likely melt lower into next week..and probably mid July.

For now, I have ZERO interest in being long VIX.

more later... on the indexes

Closing Brief

US equities saw a rather significant intraday reversal, with the sp' swinging from a new historic high of 1968 to 1948, and settling -12pts @ 1950. The two leaders - Trans/R2K, settled lower by -0.8% and -1.0% respectively.



...time for another kick off.

Suffice to say, an interesting late afternoon.

That was quite a good reversal, and it does bode for the 1940/35 either tomorrow or Thursday.

Regardless though.. the primary trend remains... UP.

*as for WFM - my personal train wreck, it managed to at least hold the floor, despite the falling market.

more later, on the VIX

3pm update - weakness into the close

US indexes are seeing a little weakness this afternoon, but still holding the short term up trend. However, that seems likely to break late today..or early tomorrow. Mr Market should comfortably hold the 1945/35 zone into the weekly close.



Little to add.

A new high...a reversal (better seen on the daily charts)..and a minor down cycle.

GDP data tomorrow will be a fair excuse for a move into the sp'1940s... problem is.. sig' QE of $3bn....bears...beware!


3.12pm break of trend.... 1940/35

3.21pm.. weak weak weak....  VIX headed for 12s

2pm update - at least I'm not Italian this evening

Whilst the main market has seen a horrendous collapse wave from sp'1968 to 1959.... more importantly, an EU nation is in shock.. Italy get the boot from the World cup by Uruguay. Ohh the humanity!



So.. not only a crash wave this afternoon..but Italy are out. It would seem a Uruguay player was hungry, and took a bite out of an Italian.

Is that bullish $MIB... or bearish?

Finally, something to keep me awake.

time for an icy drink... I need it!

*If WFM can manage to (again) claw back to positive by the close, I might be able to come off suicide watch. URghhhh

1pm update - more of the same sleepy action

US indexes are broadly still holding minor gains, with the sp'500 at 1965. Metals are battling to hold fractional gains, Gold +$1. VIX is in melt mode, -1%, back in the 10s.



*Fed official Dudley is due to speak around 2pm...I'd be wary of that one this afternoon. Market wants an excuse to sell lower.

There really isn't anything much to add.

Hopefully Costa Rica will score... or I'm going to fall asleep.

.. and WFM is back on the slide, breaking the recent low, -0.7%, $38.90s,

Lunch time update from Riley


1.18pm.... ohh the humanity.. the market has slipped to 1960.

First support is around 1955....another 5 entire points lower.

12pm update - moderate gains

Equities are holding moderate gains, with a new historic high of sp'1968. The 1970/75 zone looks viable in the near term, before a moderate multi-day wave lower. Metals are on the slide, with Gold having fallen from +$6 to flat.



Time for another England defeat... this time against Costa Rica!

VIX update from Mr T.

back at 1pm

11am update - bears getting the boot

With the break to new historic highs, what few bears are out there are getting hit on short-stops above sp'1963. Hourly MACD cycle is offering upside into the early afternoon, but there remains increasing probability of a break lower.. not that it is tradeable in my view.



So... new highs in the sp'500..and we're seemingly in melt mode...which looks likely to continue at least a few more hours.

I am aware a fair few are seeking the 1970/75 zone...and I can go with that.

What I don't agree with is the notion that the subsequent down wave is a tradeable one. Overly risky in my view.. with downside perhaps as little as 1%.

I ain't interested in that sort of down move.

Even worse for the equity bears... there is a sig' QE tomorrow of around $3bn. 

Notable strength: FB, +2.5%

11.01am... and WFM turns green..  

10am update - opening minor chop

Tuesday has opened much like Monday...which was much like Friday. US equities look set for further minor chop, but with each passing hour, there remains increasing possibility of weakness. Metals are higher, Gold +$4, which is naturally helping the miners, GDX +1.0%



Best guess... we see some moderate downside... more likely late this afternoon (Dudley comments?).. and early tomorrow.

Right now, the 1945/35 zone seems best case.

To be clear, under NO scenario do I see the big 1900 threshold being broken in the near term.

I suppose I could be somewhat despondent.. but the sun is shining, and I have another England defeat to look forward to this afternoon.

WFM, 60min

WFM remains a mess, so long as it doesn't break that big blue line....in the 38.75 zone, there remains hope the past 7 trading days were just a very severe retrace.

Some could argue its putting in a micro double floor..if so..WFM should turn green later today. 

Momo stocks looking reasonable.. TSLA and FB both +1.5% or so.

10.15am.. Fractional new historic high for the sp'500.

10.30am.. Well, there go a wheel barrow of short-stops... with sp'1965.

Last week, I noted best case upside would be Tuesday afternoon, 1970/75..before some kind of down wave.. I guess it'll be that after all.

I'd understand anyone shorting in the 1965/75 zone... but I shall... refrain.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -4pts , we're set to open at 1958. Precious metals continue to climb, Gold +$6, with Silver +0.9% - and that is helping the miners, GDX +0.4%.


R2K, daily


*we have a fair few bits of econ-data this morning, although I think equity bulls should be especially mindful of what Fed official Dudley might be saying this afternoon.

Best near term downside case is around 1945/35. I certainly can't see the recent low of 1925 being broken.

Indeed, I'd agree with most of the following from Mr Permabull, although I remain skeptical on the sp'2100s this year.

Video update from Oscar


We have another 4 world cup games today, including Costa Rica vs England at 12pm EST.  I actually will be on the side of CR. At least there will be no concern that England will lose on Penalties in this competition.

yours...   bullish Brazil

Good wishes for Tuesday.

Daily Wrap

US indexes started the week with a day of very minor churn. There looks to be a moderate opportunity for a minor down wave to the 1940s this week, before new highs into mid July. Whether the sp'500 can break the giant threshold of 2000 before the next mid-term down wave.. that is almost inconsequential.



So... we now have 11 green candles on the weekly 'rainbow' chart. Unquestionably, the primary trend remains to the upside.

First support is 1900, secondary... 1800. Anyone seriously think the low 1800s are viable any time soon?

Video update from Gordon T Long, with guest Rubino. Highly recommended.

This discussion looks at the US T-bond 'mysterious buyer'. Who is buying the US bonds via Belgium? The Fed? The ECB, or someone else? One thing is for certain, it sure isn't Belgium! Regardless of who it is, the bond buying remains an ongoing issue, and one that is certainly help prop things up.

Looking ahead

There is a fair array of housing data in the morning, along with consumer confidence, and the Richmond Fed.

Traders should be mindful that Fed official Dudley is on the loose at 2pm, and Dudley's comments are often taken as an excuse to move. A late Tuesday down wave seems very viable - ahead of Wed' morning's GDP data.

*next sig' QE is on Wednesday

Who wants some fresh bread?

Yours truly sure knows how to dig himself into a hole. I remain long the Whole Foods Market (WFM). The one solace about today.. well, at least WFM appears to have found a floor. With last Friday being quad-opex, maybe that was indeed a capitulation sell down as sometimes happens.

WFM, daily

I'd like to see the $41s this week, but that is probably an overly bold target considering the recent weakness. I like the company, and from a pure chart/price perspective, the $48/50 zone would be the obvious target zone.

Thank the gods I have the World cup football as a distraction from this nonsense!

Goodnight from London