Friday 18 July 2014

Volatility smacked back down

With US indexes building gains across the day, the VIX was knocked down from the open, settling -17.1% @ 12.06. Near term outlook is for the VIX to slip back into the 10s, and single digit VIX is possible if sp'2000 before months end.




Across the week, the VIX declined by -0.2%, and clearly, the giant spike is a pretty bearish candle.

Despite the brief Thursday climb into the 15s, VIX looks set for lower levels in the weeks ahead. The big VIX 20 threshold looks unlikely to be tested for some months.

more later..on the indexes

Closing Brief

US indexes ended the week on an especially positive note, sp +20pts @ 1978. The two leaders - Trans/R2K, settled higher by 1.3% and 1.6% respectively. Near term outlook is for renewed upside across next week, with the sp'1990/2000s very viable.



..and another week comes to a close.

Certainly, for the bears, it was a dire end to the week, almost completely reversing all of the Thursday declines. Considering the bigger weekly/monthly cycles, the sp'1990/2000s look on track before end July.

Thanks to all those who said hello this week.. makes all the difference.

Have a good weekend everyone!

*the usual updates across the evening to wrap up week.

The weekend update will be on the US weekly indexes

3pm update - ending the week on a positive note

US indexes look set for minor opex chop into the weekend, having built rather significant gains across the day. Most notable, the sp'500 has come within just 0.3% of breaking a new historic high. VIX is at risk of a weekly close in the 11s.



...long week...not least after yesterday.

I realise for many... this is a dire end to the week. After all, everything seemed so lousy of sp'1940s, 30s...I even saw a few seeking the 1920s within 'a few days'.

Here we are.. with the 1990s viable next week, and a VIX that is once again crushed back down.

I sure didn't pick up a long-index block this morning - having failed to see a secondary down wave, but hey... at least I'm not short. There will be fair chance of a minor down wave on Monday, but that might be after a gap higher.

updates ...into the close...

3.14pm.. a weekly close in the low 1980s would be pretty spiteful to the bears, but then...when isn't the market that way?

VIX -16%... 12.20s.. and the 11s look likely in the closing minutes.

3.45pm.. minor chop continues..still a high chance they'll whack the VIX lower in the closing minutes.

back at the close.

2pm update - afternoon opex chop

US indexes are a little below their intraday highs, but still... the short term down trends have been decisively broken (not least in the R2K), and the underlying strength is pretty clear. Metals are weak, Gold -$10, whilst the VIX is crushed, -15% in the low 12s.



There is not much to add.

What is pretty incredible is that some of the indexes are set for net weekly gains. If were you reading around the various finance sites yesterday, you'd have probably assumed this was a pretty poor market week...

but no.... the reality is that the broader upward trend continues.

Update from Riley


*I am content to stay on the sidelines, having failed to see a minor down wave this morning. I'll merely look to go long on the next hourly down wave...which could indeed be on Monday, but I don't expect any new lows.

stay tuned!

2.30pm Even to me, sp'1977 today is kinda stupidly strong.

Oh well, it is what it is.

Been through it a hundred times since doubt.... we'll go through this again...many...many more times.

1pm update - where are the doomers today?

US equities continue to build gains, with the sp' +15pts at 1975, a mere 0.5% from breaking a new historic high. What remains utterly incredulous, where the hell are all those who were touting the doom yesterday? Are they still trying to short this market?



Today is unquestionably an utter failure on the part of the bears. Last Thursday's low of 1952 is now a clear 1% lower, and its laughable how we are now within a single trading day of breaking a new high on the sp'500.

I have seen a lot of chatter about 'hey, are you not looking at how bearish the R2K is?.... do you not seen how it put in a double top?'

...and here we are...and the market is closing the week on a pretty strong note, and many indexes will have net weekly gains.

*as for me...I'm not interested in chasing the market higher into the weekend. Will look to go long on any Monday pull back...if not....... at least I'm not short.

 awaiting lunch.

12pm update - equity bears fail to show up

US equities continue to push higher, with most indexes breaking out of the down trends. Even the R2K is now significantly higher, +1.3%, first key target are the 1170s. VIX is getting crushed, -15% in the 12.20s.. a weekly close in the 11s is now likely.




So... we're higher, and the bears are getting ground down once again.

Complete bear failure to contain the bounce at the hourly 10MA of sp'1970... and we're now within range of breaking new highs early next week.

R2K looks especially strong.

VIX update from Mr T.


time for lunch...or something.

11am update - battling to hold moderate gains

US indexes are battling to hold moderate gains, with the sp +9pts @ 1967. Considering the recent weakness though, there remains very significant likelihood of a further down wave.. if only to test the Thursday low.




*I remain on the sidelines, and I ain't chasing on the long side from these levels.

VIX price structure is a pretty clear bear flag, but the MACD cycle is already pretty low.

Right now...

can't go long...
..and most certainly.. ZERO inclination to short whilst the bigger weekly/monthly cycles are outright bullish.

Notable strength: Airlines, DAL +2.5%, UAL +2.0%

Yours....trying to be patient.

11.01am. Market at first resistance, hourly 10MA.. .sp'1970.

11.06am.. typical turn time ..11am....equity bulls getting a valid chance to exit/tighten stops...

high chance of a reversal here....

Eyes on the VIX !

11.40am.. Equity bears fail to show up...

Indexes breaking up and out of the down trend....

10am update - morning gains... to fail

US equities open moderately higher, but there seems a very high chance that the main indexes will turn a little lower within the next few hours. Last weeks low of sp'1952 is a key level... and should just about hold.




*I will be focusing on the VIX today...

I'm seeking to go LONG-indexes, but I'd rather do that on another minor VIX spike. However, I do not expect the Thursday high to be surpassed.

So...lets see how high the VIX can get on the next minor up wave....

10.17am... chop chop.....equities want to rollover again....

I sure don't fancy buying with this setup...

VIX clawing upward....although the 15s would be surprising to see again.

Pre-Market Brief

Good morning. Futures are a little higher, sp +3pts, we're set to open around 1961. Precious metals are weak, Gold -$10. Equities have a fair opportunity for a net daily gain, and resume the broader upward trend across next week.



So..we're currently set to open a little higher, although that could easily change within the hour.

*I am seeking to go long-indexes this morning. The R2K 1130s are a very attractive level, I don't see much real chance of <1125 (although I did say the same in the 1150s).

Doomer reporter... Hunter.. on the weeks news


Good wishes for Friday trading.

9.23am... I'm suspicious that the opening gains will not hold....with a re-test of yesterdays low...if not last Thursdays low of sp'1952.

Certainly, I'm not much in the mood to chase this market higher. Still seems likely chance for a minor down wave at some point today.

9.36am... minor opening gains.... waiting for another micro down wave.

9.46am.. watching the VIX...

I will look to go LONG-indexes, on the next small VIX up wave...which will likely be a lower low... <15.30s.. probably within 2-3 hrs.

Friday black candle watch

US equities saw some significant declines, along with a VIX that exploded +41% to the 15.30s, yet was this merely another minor washout, before the next equity up wave? The broader upward trends for most indexes remain intact.



So..lets start with the sp'500 weekly chart... and despite the sig' Thursday declines, we still don't have a red candle. Indeed, the weekly 10MA - currently 1942 is first key support.

Now.. the weakest index...

R2K, weekly

We have two consecutive significant weekly declines, and the R2K has retraced over half of the gains from the powerful ramp of the 1080s to 1213. As many recognise, 1080 is the last sand line. Personally, I think 1130/20s will be a key floor before renewed upside.

Looking ahead

Friday is opex.. so expect some chop. We have 2 pieces of econ data in the morning, consumer sentiment and leading indicators.

*next sig' QE is next Wednesday.

Seeking to go long

I have eyes to pick up a long-index block tomorrow morning...probably the R2K, via IWM option calls.

R2K, 60min

Best guess for Friday? I will be on the look out for a black-fail candle on the VIX hourly/daily cycle by 10am.- along with corresponding reversal candles in the main indexes. Perhaps we'll open in the sp'1950/45 zone, with VIX 15/17s, and then a sharp turn begins.

No doubt though, the Malaysian jet story will rumble on for some days, but its not like we've not been in this market situation a hundred times before.

Goodnight from London

Daily Index Cycle update

US indexes closed significantly lower, sp -23pts @ 1958 (intra low 1955). The two leaders - Trans/R2K, settled -1.4% and -1.5% respectively. The VIX reflected a moderately spooked market, +32% @ 14.54.





So... some rather significant declines for the US market, unquestionably a result of the Malaysian commercial plane loss, and the continued conflict in Israel

The R2K remains especially weak, but the rest of the indexes are still holding within very strong up trends.

All things considered, I'm still guessing the broader market will resume the upward trend, with sp'2000s before end month.

Closing update from Riley


a little more later....