Tuesday 15 July 2014

VIX lacks any upside power

With equities slipping lower in late morning, the VIX spiked, with gains of 4%. With a rather typical latter day equity recovery, the VIX cooled back down, settling +1.2% @ 11.96. Near term outlook is for VIX to slip into the 10s, if not the 9s.



Little to add.

VIX remains unable to break and hold even the 13s. The mid teens look out of range, and the big 20 threshold.. looks almost impossibly out of range until (dare I say)... next year.

It remains a market that has ZERO concern about anything, whether it is economic growth, inflation, interest rates... or least of all..... middle east turmoil.

more later.. on the indexes

Closing Brief

US indexes closed above their late morning lows (intra floor sp'1965), settling -3pts @ 1973. The two leaders Trans/R2k, settled +0.4% and -1.0% respectively. Most notable today, new historic highs in the Dow & Trans.



...and another day comes to a close.

Without question, the new historic highs in the Dow and Transports this morning were very important, and such achievements negate the borderline significant weakness seen in the R2K.

Indeed, the R2K broke the 1150 level - breaking the recent Thursday low..and the 50 day MA. Yet...the daily close was somewhat back within the safety zone.

Just something I was listening to, from Harrold.

Certainly, position sizing is a key trader issue, although far more bemusing was the CYNK trade.

more later... on the VIX

3pm update - clawing higher into the close

US equities look set to claw higher into the close. With new historic highs in the Dow/Trans earlier this morning, equity bears have little to tout, not least with a VIX that is set to close moderately lower. Notable weakness in Oil and the precious metals.




*VIX is a bit of a mess, but looks to close somewhere in the 11s.

Today has been arguably just another minor tease to the bears. Opening minor gains.. a little down wave to the typical floor time of 11am... and then some degree of latter day recovery.

With the Dow/Trans breaking new highs earlier today, I won't take ANY weakness seriously..

Notable strength: DAL, +1.9%, but more on that one..after the close.

3.20pm.. very minor chop..with some inclination to the upside.

Dow is green, with a VIX +1.5%.. but the latter is still highly susceptible to being whacked lower in the closing minutes.

3,34pm.. .baby bull flag on the micro 5/15min cycles.... bullish into tomorrow... the setup is just like yesterday.

2pm update - battling upward

US indexes are battling pretty hard for a positive daily close, although that will be especially difficult for the R2K. VIX continues to reflect a market that has no concern of anything, and will likely close in the red.

R2K, daily


*Notable weakness in Oil, -1.4%, whilst Gold is -$10

So..2 hours to go, and that is plenty of time for net daily gains.

Again, it is highly important to keep in mind that the Dow and Trans broke new historic highs earlier this morning. On no basis can today be called as anything other than another bullish victory.

Notable strength, DAL +1.3%

Very strong across the year so far.

1pm update - latter day recovery

With Yellen out of the way, equities look set for a rather typical latter day recovery. Hourly index cycles are highly suggestive that a floor is in, although it is notable that the R2K briefly broke below 1150. Metals and Oil both remain especially weak.

R2K, daily


So...lets see how high we can push.

Equity bulls should be seeking an R2K close in the 1160s. A net daily gain...looks difficult, but not impossible. Plenty of times we've seen such upward swings into the late afternoon.

VIX set to turn red.

1.19pm.... indexes jump... VIX turns red.

For the bears.. this is no doubt just annoying day, almost as bad as last Thursday.

12pm update - the Yellen continues

Fed chair Yellen continues to offer her 'wisdom and economic understanding' to the US Senate. Meanwhile...outside of Disneyland, the US indexes are battling to hold the key floor of the R2K 1150 level. All things considered...it should hold.

R2K, daily



*notable weakness in Oil, -1.8%, and the metals... Gold -$9

Perhaps more than anything morning, despite the equity weakness... the VIX is NOT showing any upside kick.

Equity bears have an opportunity to exit here.

VIX update from Mr T.

back at 1pm.... unless we break <1150

12.01pm.. FAIL.  R2K 1149... breaking last Thursdays low, and the 50 day MA.

VIX jumps.. +4.8%..... hmm...equity bears need 13.30s to confirm something 'new'.

12.07pm.... finally Yellen concludes...

Maybe the indexes can rally from here. ?

looking at the daily/weekly charts..next key support is 1950/45.

Regardless, the VIX is not displaying any real upside power.

12.45pm.. R2K back on the rise.... now that Yellen is out of the way.

11am update - R2K on the edge

Whilst the Dow and Trans broke new historic highs, and with the market breaking moderately lower, the R2K is on the edge of taking out the Thursday morning low of 1151. Any break <1150 would be a problem.

R2K, daily



Personally, I think the weakness is nothing of significance.

Certainly, the VIX is not supporting ANY major drop..barely +2% ...in the low 12s.

It is almost 11am.. a typical flooring time...and my best guess....

We've filled a gap in the sp'1970 zone... with the R2K testing the 50 day MA.

In theory...we should stabilise here.

The micro 5/15min cycles are offering a turn at almost precisely 11am.

11.04am.. It sure is a borderline situation.. at least for the R2K, but I'd guess it holds the 1150s.

R2K, 15min

Call it a double floor.. but so far.. it is holding. Certainly, VIX does NOT support a major drop.

11.08am.. another spike floor candle... and we're building a secure floor at R2K 1151..with sp'1971.

Equity bears had their 'fun for the day'....time for the latter day recovery.

11.12am... R2K snaps higher....bears on the run. We have a floor.. at the typical turn time of 11am.  Never fails to surprise me.

11.14am.. time for a somewhat early lunch... back in 15/20

11.29am... From a pure cyclical perspective... we should rally to at least 2pm....which will get all indexes back to positive.. making for a rather big spike floor on the daily charts.

Equity bears should be mindful of sig' QE on Thursday.. Right now, we look set for the sp'1990s... but hey, that is not too far to go.

Notable weakness: CHK -3%... and I'm not sure why. Oil/gas price falls?

11.41am.. chop chop... near the floor... not exactly surprising. 

11.50am.... This sure is a close thing.. R2K 1152.. a mere 2/3pts from breaking a key level.

If R2K 1150 were to fail.. there is a clear 10pts further downside to the 200 day MA at 1140.. that'd be suggestive of the sp'1960/55 zone.

10am update - awaiting the CEO of print central

US indexes are seeing another morning of moderate gains, and its enough to break another set of new highs for the Dow and Trans. Sp' could follow today, with a close in the 1985/90 zone. Oil is notably weak, -1.4%



*The baby bull flag played out very well.

Little to add. I don't expect any sig' break lower today..why would we?

So long as Yellen is careful on the issue of interest rates, we'll surely hold the gains, and just keep on pushing.

More than anything, with new historic highs...I can't take ANY bearish talk seriously.

time for Yellen.................

10.16am... and indexes turn red............

don't get lost in the downside hysteria ;)

Its a buying opportunity, lol

First downside target is the gap of 1970... a mere 0.3% lower... not exactly huge.

10.38am.. R2K is close to last Thursday mornings low.....so long as it holds....no problemo.

...eyes to the R2K

10.42am.. gap fill coming at sp'1970.

VIX +2%.. at 12... not exactly thrilling.

10.44am.. R2K 1153...... the floor is 1151.     Bull maniacs need to start appearing... but then we are at typical floor time of 11am...

10.52am.. I'm calling a morning floor, with the sp' around 1970.. and R2K at 1151.

Certainly, a few bulls will be spooked, but.. price action is NOT bearish, as reflected in the VIX.

Pre-Market Brief

Good morning. Futures are fractionally higher, sp +1pt, we're set to open at 1978. Metals are seeing a minor bounce, Gold +$3. Mr Market will be focused on what Yellen has to say, not only today, but also tomorrow.



*retail sales due at 8.30am

Well, the morning will be consumed with what Yellen says to the US senators.

As noted yesterday afternoon, price structure - seen better on the hourly cycle, is a baby bull flag, and is offering the 1985/90 zone today....bears beware!

Good wishes for Tuesday trading

8.31am.. retail sales +0.2%... kinda disappointing (expectations 0.6%), but hey, its not negative,right?

Indexes clawing higher, sp +3pts... that takes us to 1980...  just 5pts shy of a new high.

sp'1990/2000s are coming this month.

I do realise the irony

US indexes started the week on a positive note, with the sp +9pts @ 1977. The 2020s look viable by end month. The weekly trends remain broadly bullish, but it will be somewhat important to hold above the rising weekly 10MA, currently in the 1940s.



So, the week begins with moderate gains. Far more notable though, we saw new historic highs in the Dow and Trans. With those two breaking higher, I can't imagine the sp'500 not breaking into the 1990/2000s within the very near term.

Price action is most certainly bullish, and with a VIX that can't even hold the 13s for more than an hour, the equity bears still look utterly powerless. Sure, we will get minor pull backs, but it should remain clear to most out there, we are continuing to just put in higher highs...and higher lows.

Looking ahead

Tomorrow will likely be more dynamic. We have a quartet of data, retail sales, empire state', import/export prices, and business invent'.

However, far more important, Fed chair Yellen will be giving testimony to the US Senate. No doubt, that will get the markets full attention across the morning, and will receive blanket coverage on clown finance TV from 10am onward.

*next sig' QE is Thursday

More upside to come

So...another week is underway, and I realise the irony that I continue to tout much higher index levels. Yet... I'll keep on calling it as I see it. It is not exactly easy, not least since I understand that some of you only want to hear 'doomer talk', but no..I won't be spouting that for the sake of attracting attention.

It would seem the sp'2100s remain on track, the only issue is whether that is hit this year...or early 2015.

I was looking at a great many individual stock charts today, and many of them have bullish price structure. Here is an 'old favourite'....

RIG, weekly

Price structure is a large multi week bull flag, and there looks to be reasonable opportunity for $48/50 by September. Certainly, if earnings come in okay, and the market continues to push higher into the sp'2000s, I'd guess RIG will be in the upper 40s.

I could reel off a hundred similar looking stocks.. but for today... that will have to suffice.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately higher, sp +9pts @ 1977. The two leaders - Trans/R2K, settled higher by 0.7% and 0.5% respectively. Near term outlook is bullish into the sp'1990/2000s.





Today saw notable new historic highs for the Dow and Transports, and the sp'500 looks set to follow in the near term.

Daily charts are currently restrictive to the sp'1985/90 zone... the 2000s look out of range until next week. Regardless.. the primary trend remains to the upside.

Closing update from Riley

a little more later...