Thursday 24 July 2014

Volatility manages minor gains

With the main market seeing some mixed chop across much of the day, the VIX managed to push a little higher, settling +2.8% @ 11.84. Near term outlook is for the VIX to slip back into the 10s, not least if market breaks into the sp'2000s.



Little to add. The intraday spikes on the VIX remain embarrassingly small. It took the loss of a passenger jet and Israeli battles just to hold the 15s for a single trading hour...

Q. What will be necessary to get the VIX back into the 20s?

With my broader outlook to the sp'2130s, I'd have to guess we probably won't see VIX 20s again until next year.

Certainly, I have zero interest in going long the VIX for some months.

more later... on the indexes

Closing Brief

US indexes closed with minor mixed chop, sp +0.9pts @ 1987 - with a new intraday high of 1991. The two leaders - Trans/R2K, settled u/c and -0.2% respectively. Near term outlook is bullish into next week.



*earnings due from AMZN

So.. a bit of a choppy day.. but with another new historic high in the sp'500.

I hold moderately long overnight, via the R2K.

*Clown finance TV interview at 5pm EST, Liesman and King O'... the primary topic will be the economy/business.  No doubt the algo-bots will be quietly...listening.

more later.. on the VIX

4.22pm.. AMZN earnings... lousy .. a loss of 27 cents per share....vs. 15 loss .. expected.

It remains a joke of a company, the height of 'crony capitilism', with arguably the worse board of directors in the western world.

Global turnover of $70bn or so, and they still can't turn a profit.

AMZN -5.5%....but.. as often reverses on the day after earnings.

3pm update - upward pressure into the close

US equities look set for claw higher, with a very viable close in the low sp'1990s. Without question, it has been another day for the equity bulls. Metals remain weak, Gold -$14. Oil is similarly weak, -0.9%.



*5/15min cycles look floored, and hence I'm looking for a micro rally into the close.

So.. we've got stuck at sp'1991. There is obvious channel resistance there, but still a new high.. is a new high.

The black-fail candle (8515) on the Transports yesterday is something I am wondering about.. since we got stuck at 8513 today.

Regardless...the bulls managed another new high today.

3.18pm... chop chop... sp'1987...   smaller cycles look floored... 3pts to get a daily close in the 1990s..not that its 'necessary' of course!

Bulls have NOTHING to prove.

*notable weakness. airlines, DAL/UAL, both -2.5%....

that makes for a rather strong reversal.  Black-fail candle at the open... I was 'overly' dismissive.... of one of my own key issues.

3.37pm... indexes trying to claw higher... sp'1990... just about viable.

3.44pm.. some spike floor hourly candles.. for the indexes....bodes bullish for Friday.

2pm update - spooked by a 0.2% down wave?

US equities have seen a micro down wave.. but still price action is not remotely bearish. It remains very bizarre how many get spooked, or overly excited about every micro down wave. Sp'500 still has a high probability of a daily close in the low 1990s.



*R2K slips to 1153...there is gap support around 1150...that would be 'best bear case' by 2.30pm.

Indeed... I am now looking for a key afternoon floor within the next 15/45mins.

Most indexes will likely still see net daily gains.

Notable weakness: QCOM, -6.5%,  DO, -4.5%.. but the latter is recovering from the morning low.

1pm update - afternoon upside bias

US equities remain moderately higher, with the sp'500 battling for a daily close in the low 1990s. Metals are significantly lower, Gold -$14, with the miners ETF of GDX, -1.8%. VIX looks set for fractionally red close.

R2K, daily


*I remain particularly focused on the R2K, since that is the one I am currently long. I am seeking at least a daily close >1160, anything >1165 would open the door to 1170/80 zone tomorrow... where I would exit into the weekend.

Rest of the market looks set to just claw slowly higher into the weekend.

Clown finance TV are getting understandably overly excited at the looming interview between Liesman (such a great name), and King O... the interview (5pm EST) will focus on the economy/business.

VIX update (somewhat late) from Mr T.

stay tuned

1.10pm... and a micro snap lower... hmm.

1.20pm.. gap support on the R2K around 1150.

Here we go again.... on a day when the market broke a new historic high of sp'1991.... the top callers will be coming out again.

Utterly laughable that most are still getting hysterical over micro down waves of -0.25 to -0.5%

1.27pm.. with this micro down wave... market should be floored by the typical turn time of 2.30pm.

Regardless... I'm long, and I ain't concerned... not least on the VERY day when the sp' broke a new historic high.

12pm update - pushing higher

US equities are inexorably pushing higher, after the latest brief little tease to the bears. A daily close in the sp'1990s seems probable, with the 2000s next week. Metals continue to slide, Gold -$15.



Little to add. Price action remains the same... micro down waves...within a broader up trend.

In theory...if 2100s... we should see general upside to 2050/75 by September.. and then the next minor multi-week drop.


time for lunch

11am update - morning chop

US equities have seen a minor wave lower, but the price action sure does not look at all bearish. With sig QE today, the market will surely rise into the afternoon. Metals are weak, Gold -$13, and that is hurting the miners, GDX -1.3%



Its another case of 'don't get lost in the minor noise'.

Morning chop..but price action does NOT support any near term bearish outlook. Indeed...we'll likely be in the 2000s next week..and what then? Ohh yeah...the more and more are increasingly recognising.

yours... long the R2K (of all things!).

Notable strength, airlines, UAL,

Yes, its a big black-fail candle, but its earnings, and I think that could be argued to dismiss it. UAL looks headed for the big $50

10am update - welcome to the 1990s

US equities open with a little chop, but the broader trend is very much still to the upside. Most notable.. a new historic high for the sp' in the 1990s. I have no doubt given a few weeks..I'll be able to say.. 'welcome to 2014'



....lets start with this...



Kinda interesting that the weekly candle is still blue..even though we've broken into the 1990s. Regardless... we're headed into the 2000s... and beyond.


I am naturally focused on the R2K...which looks fine for the 1170s...


A great many major stock moves already today.. hard to choose what to highlight here.

Notable weakness in the oil/gas drillers, DO -6% or so on earnings... RIG/SDRL being dragged moderately lower.

10.21am.. minor chop... but broader price action does NOT favour the bears.

Keep in mind, sig' QE today... will be very strong upward pressure into the late afternoon.

VIX seeing a minor spike +4% at 12.05.   

10.34am. .just look at the tick by tick action..... it is NOT bearish.

Seeking sig' latter day upside....esp' in the R2K....just need >1165 for a major jump.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +3pts, we're set to open at a new historic high of 1990. Metals are a little weak, Gold -$6. With sig' QE of $3bn today, equity bulls have everything on their side.


Summary come the 1990s.. with the giant 2000 level due next week. Weekly charts will actually be offering the 2020s next week, although daily cycle will be restrictive to 2000/2005.

Update from Carboni


Notable early movers - post earnings

FB +9% in the $77s... yeah...9%,
T -1.5%
QCOM  -4.9%

I will note, I am a major fan of QCOM, its results were good (on first look)... should be fine in the mid term.

Good wishes for Thursday trading.


9.23am... Notable strength in the airlines, UAL +6.5%....

Sp' set for the 1990s... R2K has a fair chance at the 1170s by the close. 

9.45am.. A great many sig' price moves this morning...hard to know where to start.

R2K battling for the mid 1160s...momentum looks fine.

Upside into the late summer

US equities achieved another pair of new historic highs - sp'1989, Trans'8515. The sp'2000s look due next week. There looks to be reasonable upside to the sp'2050/75 zone by late September.



So.. another pair of new highs for the Transports and sp'500, and unquestionably, it should mute anyone talking about 'significant downside in the near term'

Yes, we still have a blue candle on the weekly 'rainbow' chart, but with new highs... no one should be bearish right now. Price action remains broadly strong, and this is reflected in the VIX, which is crushed in the 11s.

Looking ahead

Thursday will see jobless claims, PMI manu', and new home sales data. Overall... not much of significance. Mr Market will be free to dwell on continuing earnings reports.

*there is sig' QE-pomo of around $3bn... bears beware!

Holding long

I remain moderately long the market, via the R2K index. I'm seeking an initial exit in the 1170s by late Friday afternoon (I'd go long again on any minor Monday down wave). That doesn't seem overly bold a target, with the 1200s very viable in early August.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately higher, sp +3pts @ 1987. Most notable, new historic highs in the Trans/SP'500. The two leaders - Trans/R2K, both settled higher by around 0.2%. The sp'2000s look due next week.





Once again, we saw another pair of new historic highs.

The broader upward trends remain intact, and there looks to be easy upside into the FOMC of next Wed' July30'th... which should equate to the sp'2000s.

*I will be seeking a weekly close for the R2K in the 1170s, which should confirm a new multi-week up wave is now underway.

Closing update from Riley

a little more later...