Wednesday 16 July 2014

VIX resumes the slide

Having seen a minor gain on Tuesday, the VIX is back on the slide, not least helped lower via new historic highs in the Dow/Trans. VIX settled -8.0% @ 11.00, having seen a brief opex morning low of 10.59.




Little to add.

VIX looks set for a weekly close in the 10s... and single digit VIX can't be far away now.

more later.. on the indexes

Closing Brief

US indexes closed with moderate gains, sp +8pts @ 1981. The two leaders - Trans/R2K, were mixed, settling +0.6% and -0.2% respectively. Near term outlook remains bullish, with the sp' set to break into the 1990/2000s.



...and yet another day in rainbow & unicorn land comes to a close.

More than anything, it was just another daily tease to the equity bears. Opening gains, but with the R2K turning moderately lower...flirting with the 1150 threshold.

Overall...the broader trend is absolutely bullish, and its just a matter of when the sp' will break the giant psy' level of 2000... not if.

With sig' QE tomorrow... the bulls look fine for the sp'1985/90 zone.

more later.. on the VIX

3pm update - another day of new historic highs

US indexes look set for minor chop into the close, but far more notable.. the Dow/Trans both set new highs. The R2K remains comparitively weak, but is still a clear 6% above the early May low. Oil and the precious metals both set to close with gains.



Somewhat tired of so many people getting wrapped up in the minor chop.

Broader trend is absolutely clear.... bears are being teased day.. after day..... after day.

Notable strength: RIG +1.8%, breaking above a bull flag, but more on that one..after the close.

3.27pm.., minor chop, with sp'1980.... R2K is back to red.... the grand picture... just another day to the bulls.

2pm update - R2K set to close positive

Whilst the broader market is holding moderate gains, even the R2K is battling for a positive close, above the rather important 1150 threshold. Underlying price action remains outright bullish, not least with new historic highs for the Dow and Transports.

R2K, daily


*fed beige book due at we might see a reaction..if very slight, to that.

Aside from that, its merely another day for the bulls.

VIX is in melt mode..-5% in the 11.30s.    A weekly close in the 10s looks likely.

1pm update - melting higher

A minor up wave for the US market has driven the sp'500 to within 0.2% of breaking a new historic high. With sig' QE tomorrow morning, equity bears face further problems. Gold is holding moderate gains of $6, whilst Oil is +1.1%.



Little to add.

Equity bulls should seek a daily close for the R2K in the 1160s, that would help calm down the maniacs who are still touting major downside.

As noted earlier, I'm seeking vastly higher levels in the R2K... initial target is a monthly close (whether July...or August) in the 1220s..... and then 1280s.

The 1300s are my grander target..and that would equate to sp'2100s.

12pm update - market churn

US indexes are mostly holding moderate gains, with notable weakness still in the R2K. The sp'500 has fair opportunity of a daily close in the 1985/90 zone, but that currently seems more unlikely until at least tomorrow. VIX remains crushed in the 11s.



Suffice to say... minor chop..but we do have gains for most indexes, and with new historic highs..the bears have nothing to get excited about.. and that includes the R2K.

VIX update from Mr T.

time to cook

12.35pm.. market in melt mode.. sp'1981.... a new high would be pretty bullish... along with R2K 1160s.

*I was just pondering on the R2K upside target...1280s would be a minimum.. 1300s seem pretty reasonable.

Great huh?

11am update - R2K remains a little shaky

Whilst the Dow/Trans have again broken new historic highs, the R2K remains notably weak, hovering around the 1150 threshold. Gold is holding gains of $7, whilst Oil is pushing higher, +1.1%. VIX is crushed, having slipped into the 10s at the open.

R2K, daily



So...almost an exact replay of yesterday...although the broader market is somewhat stronger.

The weakness in the R2K... I am largely dismissive of.

Yes, there is a reversal candle in the VIX, but then...a rally from the mid 10s, is not exactly anything for the equity bears to get excited about.

Notable strength: INTC +6.1%.... very impressive company...still 'cheap' relative to the main market.

11.09am.. R2K trying to rebound from the 1150 level. A daily close in the 1160s would be pretty important...and offer the sp'1990s.

11.12am... In more bullish news...

Yellen admits the Fed will backstop the the right circumstances.

How many years until the Fed start buying student debt?  3, 5, or 10? 

10am update - here she comes again

US equities open moderately higher, with another set of new historic highs for the Dow and Transports, sp'500 will likely follow this morning, into the 1985/90 zone. Gold and WTIC Oil are both higher by around 0.7%



*yes, opening candle is a bit spiky, and I suppose we might fall again, but regardless, any down wave won't last long.

Without getting lost in the minor noise, the upward pressure is there for anyone to see.

*equity bears should be mindful of sig' QE tomorrow, which will further help prop this market up into the weekend.

Time for'2.

Notable that the VIX flashed lower for VIX opex... 10.59

10.21am.. minor chop... 1979/80....and anyway..we have new Dow/Trans highs.

Yes, the R2K is flat.... and again, it needs to at least close above the 1150 threshold.

10.34am.. micro down wave to R2K 1151.... teasing the bears.

Yeah...its just another tease.

Meanwhile, its again dawning on me, we've a good 7 years more of this woman droning on about how the Fed is going to save us all. Urghhhhh

10.42am.. Ohh gods help us now... Maxine Waters is asking questions.

Comedy gold though...every word.....

Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open at 1980, a mere 5pts shy of a new historic high. Precious metals are similarly higher, Gold +$4, whilst Oil is trying to retake the $100 threshold, +0.7%



The setup is VERY similar to yesterday.

Not only do we have a small bull flag on the micro 5/15min cycles, but we're due to open moderately higher, and Yellen is due at 10am.

It is really quite like Groundhog day.

As follows, a rather typical 'dollar doomer' interview, Hunter and some guy called Egon (sadly, not a ghostbuster).

I completely disagree with the notion of a USD collapse, which is completely implausible, since most other currencies are weaker. As ever, make of it what you will.

Notable early strength: INTC +4.7%, on earnings.

Good wishes for Wednesday trading

New historic highs verses the weak R2K

There is a somewhat growing disparity between a few of the equity indexes in recent days. Whilst new historic highs have been achieved in the Dow and Transports, the R2K has again been noticeably weak, briefly breaking below the 1150 threshold today.

Dow, weekly

R2K, weekly


So, we have another set of new highs for the Dow and Trans, and the sp'500 came within 3pts of the recent 1985 high. Yet, the R2K is currently lower for the second consecutive week, and is now below the weekly 10MA - the equiv' of sp'1945 or so.

On balance though, new historic highs are far more important than the weakness of one index. Further, the VIX remains unable to break & hold the 13s, and is utterly reflective of a market that has very high confidence in itself.

Certainly, broader market price action does not support any short, mid,  or least of all, a long term bearish outlook. I won't be shorting the indexes, or long VIX, any time soon.

Looking ahead

Wednesday will see the Yellen make another appearance, this time in front of the US congress. That will be the focus of the market tomorrow, and will likely last around 2-3 hours.

There are also a few pieces of data, most notably, industrial production. At 2pm, the latest Fed beige book is released and that will likely focus market chatter as to what Q2 GDP might be (due July'30).

*next sig' QE is Thursday.

Video from Gordon T Long and Smith

*I didn't use parental discretion whilst viewing. was that.. bad?

Goodnight from London

Daily Index Cycle update

US indexes saw a latter day recovery after late morning weakness (intra low 1965), sp -3pts @ 1973. The two leaders - Trans/R2K, settled +0.4% and -1.0% respectively. Near term outlook is for the sp'1990/2000s.





Most notable today, new historic highs in the Dow and the Transports. Without question, a new historic high is to be treated with high respect, and even though we saw the R2K briefly slip under the somewhat important 1150 level, the new highs are far more important.

Broader trend remains to the upside, and I expect the R2K to be breaking into the 1220s within the next 2-6 trading weeks.

Closing update from Riley

a little more later...