Thursday 17 July 2014

VIX explodes.. to the mid teens

The VIX was fractionally lower in the early morning @ 10.85... but with news of the downed Malaysian jet.. the VIX surged, and built gains into the late afternoon (intra high 15.38), settling +32% @ 14.54. Weekly cycles are offering the 17/18s in the immediate term.





Perhaps even more interesting than the daily net gain, is the trend on the weekly VIX chart. As I noted a few weeks ago, the underlying MACD (blue bar histogram) cycle is suggestive of some upside. There is currently viable upside to the 17/18s in the immediate term.

It is notable that even though the VIX saw a net daily gain of a VERY significant 32%.. we're still only looking at VIX 14s.. which is historically a very low VIX.

Special note...

Equity bears should be especially mindful of a very possible black-fail candle at the Friday open - much like last Thursday.

I do not see the VIX holding the upper teens in the near term for more than a few hours. On any basis... equity bears are getting the opportunity to exit after a relatively sharp upside spike.

more later.. on the indexes

Closing Brief

US equities closed significantly lower, sp -23pts @ 1958. The two leaders - Trans/R2K, settled lower by -1.4% and -1.5% respectively. Most notable, the VIX gained a powerful 35% to the 14.80s (intra high 15.38). Metals built gains, Gold +$19.




..well, today started quiet.. but it became the most dynamic price action we've seen in a fair while, not least in the VIX, which swung from the 10s.. to the 15s.

*I will be seeking (unless style of price action changes) pick up an index long tomorrow morning... very likely the R2K.

the usual updates across the evening.

more later.. on the VIX

3pm update - weakness into the close

US indexes look set for some further weakness, with a daily sp'500 close in the 1965/60 zone. VIX has broken into the 13s, the 14/15s look briefly viable at the Friday open. Metals are holding sig' gains, Gold +$17.




*VIX takes out the Thursday spike high.

So, we're still moderately lower, and indexes look set to close negative.

Certainly, a day for the bears, but considering the news, its very bemusing that we're not lower by at least 1.5% or so.

*I will be seeking to pick up an index long... tomorrow morning.

3.18pm VIX +28% in the 14s.... kinda big move..but then..14s is STILL a low VIX.

Weakness into the close....tomorrow morning/Monday will be prime buying least to me.

3.34pm. . VIX +33%...14.70s. .. sp'1959s....


3.46pm... VIX +39% in the 15s.... now its getting interesting.

2pm update - a daily close in the low 1960s?

Considering this mornings dramatic news, there is likely further downside into the close. A daily close in the sp'1965/60 zone looks a valid target. Gold is holding sig' gains, +$17, whilst Oil is +1.5%. VIX is still battling to retake the low teens.



So..we're looking weak.... and now its a question of whether the Thursday low of 1952 will hold in the current down wave.

*as things are...I will be looking to pick up an index-long tomorrow morning... in the R2K no less.

Gods help the bulls now.

1pm update - busy afternoon ahead

US equities are having to cope with what is a rather serious incident in the Ukraine. Yet so far, the indexes are comfortably holding above last Thursday's low of sp'1952 (along with VIX 13.20s). Gold is holding sig' gains of $19.



So..we're still lower, but there just isn't much down side pressure out there.

Unless last Thursdays low fails.... bears can't get confident of any sig' downside.

Update from Riley

I'm with Riley on this, and I'd guess this nonsense will recover, and break new highs next week.
stay tuned....

12pm update - market rocked by Malaysia plane crash

Equities were marginally weak this morning, but with the tragic loss of another Malaysian airliner, stocks have snapped (if moderately) lower. The R2K is now testing the 200 day MA in the low 1140s, whilst the VIX is making a play for the mid 12s.




Well....the bad news is certainly a very valid excuse for the market to sell lower, although in the scheme of things, we're not even -1%.

Thing is... if it was a missile strike (seems likely).. then this story is not going to end today.

VIX update from Mr P.

time to cook.

12.03pm... market seeing further weakness... and the VIX is on the rise.. +16% ...12.70s.

A VERY busy afternoon ahead...

12.08pm.. VIX looks headed for the 13s...current momentum is offering the 14/15s by late afternoon.. which would equate to sp in the 1950s....

Bears are getting a 'bonus' opportunity to exit... the bigger picture remains unchanged.

12.30pm.. VIX stuck in the 12.80s....but still... looks to be viable further upside later today.

This airline story is going to rattle a fair few for a fair while..

11am update - minor chop

Equities are seeing very minor chop, although yet again, the more notable weakness is in the R2K. The sp'500 will likely close around 1975.. the 1960s...will not be easy to hit. VIX is battling to claw higher, +3% in the 11.40s.



A somewhat quiet morning, although in some ways, that is a good thing.

Remember, just a week ago....and we were sp'1952 then.. with VIX 13.20s....

Given a few weeks...the sp'2000s look relatively easy.

11.24pm... VIX... +8%... next resistance 12.10....


11.32am... Kinda interesting... VIX 12.40s.....

Equity bears need to take out sp'1952... with VIX 13.20s......and that looks out of range.

11.40am.. market spooked by this ?  Plane down in Ukraine @ BBC news

10am update - opening reversal

Equities open moderately lower, but there are already numerous signs of a reversal, not least in the VIX which looks set to turn red. There is notable strength in the metals, Gold +$6, whilst Oil is +1.1%.



Minor chop... nothing of any significance. With QE this morning... bears face the usual problems.

R2K, offering a reversal...

Equity bulls need a break back into the 1170s to decisively end the slide from 1213.
stay tuned

10.02am.. ..and the VIX turns red.

*phil fed came in a fair bit better than market expected, so everything is fine again, ha.

Pre-Market Brief

Good morning. Futures are moderately lower, sp -7pts, we're set to open at 1975. Metals are a touch higher, Gold +$2. Equity bulls have $2bn to help negate what sell side volume there is today.



So... we're set to open a little lower, but as ever...this is likely just another tease to the bears.

There are multiple aspects of  support in the low 1960s, but even more important, the weekly 10MA. .currently in the mid 1940s.

*I will very likely pick up a long index block, in none other than the R2K... tomorrow. The 1150/40s is a very tempting area, having pulled back from 1213. For today, I'm a watcher, but not a fallen angel/rock monster. (you've seen the movie Noah, right?).

Good wishes for Thursday trading.

Go stare at this for an hour.. or more

All US equity indexes continue their broad upward trend. Even the weaker R2K remains a very significant 6% above the mid May low. What remains bizarre is how many are still getting wrapped up in the minor down waves... and completely missing the bigger picture.



*the above chart highlights a key Fibonacci upside target, in the sp'2130s. I realise that to some it might seem a bold target, but really, we're only talking about another 7% or so higher.

Since waving the white flag last summer in the sp' almost 25% lower, what has never failed to bemuse me is seeing the continued (and overly confident) bearish chatter across the many blogs, and even some of the bigger finance sites.

Naturally, many of the doomers have used Geo-political issues such as Syria, Ukraine, Iraq (almost any country will do) as reason that a big collapse wave is coming.

Even I've posted future scenarios offering a grander retrace to the 1625/1575 zone, but I sure haven't traded it... not whilst the current price action remains unchanged.

Dow in the 17100s, headed for the 18000s

If you're on board with the sp'2100s outlook, then you have to also be looking for the Dow to keep on pushing into the 18000s.

Dow, monthly'2, rainbow

We have the first green candle on the monthly chart since last December, as price momentum swings a little more in favour of the bulls. Whether the Dow can manage 18k this year..or not until early 2015.. really should make no difference to those on the long side.

Looking ahead

One upside to Thursday..there is no Yellen. Instead, the market can focus on a few pieces of econ data - jobless claims, housing starts, and phil' fed.

Fed official Bullard is speaking in the early afternoon, and I'd expect some of his comments to get the markets attention.

*there is sig' QE of around $2bn, ...bears beware!

Did you stare?

So... yours truly is still touting much higher levels, and in many ways, there is little more to say. I certainly won't be trading any short side positions any time soon, and instead, will merely look to pick up an index long.. or individual stock.. when the mood takes me.

I'm aware of some taking short positions across the past few days. To me, it makes zero sense, and I can only suggest... (as politely as I can)... go stare at the monthly charts for an hour.

If you're still not convinced.. go stare for another hour. Repeat as necessary.. until mindset changed.

Goodnight from London

Daily Index Cycle update

US indexes closed generally moderately higher, sp +8pts @ 1981. The two leaders - Trans/R2K, settled +0.6% and -0.2% respectively. Near term outlook remains bullish, with the sp'500 within range of the 1990/2000s.





First, I'll start with the weakest index.. the R2K, which again broke below the 1150 threshold this morning - where the 50 day MA is lurking.

I realise some will be getting overly focused on this weaker index (and I'd still indeed call it the second market leader), but the new highs in the Dow/Trans outweigh the R2K.

The broader market is very much still climbing, and the idea of attempting to short this market, seems ludicrous to me.

a little more later...