Friday 1 August 2014

Powerful VIX weekly gains

The VIX managed a new cycle high of 17.57, settling +0.5% @ 17.03. VIX saw powerful net weekly gains of 34.2%. Equity bears should be seeking a close above the weekly 200 MA - currently in the 17.70s.. to offer hope the equity rally from Oct'2011 is over.





*I should note.. just two days ago, I was seeking a VIX weekly close in the 10s.. along with sp'1980/90s.

With the major trend break on Thursday, a great many of the broader cycles have changed in outlook. If the sp'500 can back test to 1955/65 next week, then VIX will likely cool to the 14/13s...before another viable snap higher.

Those equity bears who believe sp'1991 is a key mid term top, should be seeking an August break <sp'1900, along with VIX 18s.. if not a more significant target of the 22s.

more later.. on the indexes

Closing Brief

It was a second day of weakness for US equities, with sp' flooring at 1916, and settling -5pts @ 1925. The two leaders - Trans/R2K, settled -0.2% and -0.5% respectively. Near term outlook offers the sp'1955/65 zone.. before more significant downside.



*a moderately weak closing hour, but still 9pts above the earlier low.

...and a rather important trading week comes to a close.

Without question... after four weeks of chop.. yesterdays break below 1960 was a rather key trend change.

The big issue now is whether the market will get stuck in the 1955/65 zone... and then rollover to break <1900, or whether we are yet to break the giant 2000 threshold.

Considering yesterdays price action...I'm guessing we will get stuck.. and roll lower.

Have a good weekend everyone.
more later... on the VIX

the weekend update will be on the World monthly indexes

3pm update - upside into the close

With a break above the hourly 10MA of sp'1930, equities look set for slight upside into the close. Indeed, hourly cycles are offering broad upside across Mon-Wed, to the 1955/65 zone... where a 'classic back test' is viable against the old busted support floor.




*hourly MACD cycle is primed to break higher next Monday.

It has been one hell of a week, with Thursday offering the first decent bearish price action since February.

There are a number of very bearish outlooks now viable, but first...lets see if we can get a back test of broken support.. and then break below 1900.

A key level is the sub-cycle high of 1897. If that can be broken at ANY point this month, then the broader trend will have decisively turned bearish.

*I will seriously consider a short of the market next Tue/Wed. in the 1955/65 zone.. which should equate to VIX 14/13.50s. Until then....I'm content to watch.

3.07pm... micro bull flag on 5/15min cycles.....bears...beware!

3.22pm.. market trying to close green.... here come the 1930s..

3.34pm.. minor chop.. but the earlier low of 1916 is a fair way lower.

Notable strength: TSLA +5%

3.54pm.. urghh.. rats selling into the close... 1923... with VIX 17.15

2pm update - a break above hourly 10MA?

US equities are yet again attempting to rally.. this time from sp'1916.. with a VIX peak of 17.57.  Metals remain strong, Gold +$11, whilst Oil is -0.4%. Next looks to be a critical week, with key support in the 1900/1895 zone.




*eyes on the hourly 10MA.

If market can break >1930 or so.. then the down trend is probably over.. in the immediate term.

VIX <16.50 will confirm it.

I will consider an index short next Tue/Wed. in the sp'1955/65 zone, with VIX 14/13.50.

2.19pm...initial turn... break above the 10MA .. on our way to 1955/65

1pm update - weak weak weak

US indexes remain very weak, and there is now a high threat of a weekly in the 1905/00 zone. Metals are strong, Gold +$12, whilst Oil is -0.5%. VIX +3% in the mid 17s.




*next downside target is the 200 day MA on the Dow, 16320s

It remains a real mess in market land, another 0.5% or so lower.. and things will be on a cliff edge for next Monday.

*There is a lot to say on the bigger cycles - all rolling over, but... I will cover that later this evening.

Intra update from Riley

stay tuned

1.30pm.. another attempt to floor... sp'1923... VIX is flat... @ 17.00


12pm update - no buyers

US indexes have utterly failed to build a floor, and with sp'1925 breaking.. we have another snap lower into the 1910s. VIX is pushing higher into the mid 17s.... and now the issue is... does this really just keep falling away?




..back from a minor shopping excursion..

An ugly morning for the market... no buyers...and we just keep on slipping.

The Dow 200 dma is next obvious target, in the 16320s.


VIX update from Mr T

time for lunch

11am update - battling to push higher

US equities continue to see some chop, but the sp'1925 low is holding so far. VIX continues to cool, -5% in the low 16s. Metals are strong, Gold +$12, whilst Oil is again weak, -0.6%. First upside target remains the sp'1955/65 zone, with VIX 14/13s.



So... some Friday morning chop....

With yesterdays big break of support.. there are some huge issues to consider this weekend...

A major problem for the bulls are that the monthly cycles are now rolling over..and the Dow is now negative MACD cycle... first time since late 2012.

Ugly chart.. to start the month.

11.34am.. so much for 1925.....   with 1923 and VIX 17s.

Bad end to July for the bulls.... August isn't starting so great. 

time to shop...........

10am update - morning reversal

US equities open a little lower, but there are early signs of a major reversal underway from an intra low of sp'1925. VIX is cooling, -5%, and a classic back test to the low 1960s - with VIX 14/13s seems very probable.




There is a lot to say about the broader trends - which ARE showing initial signs of a major roll over, but suffice to say... yesterday was a key break (esp' in the Dow)... and things could be getting real interesting across the next few weeks.

For me, its now a case of whether we get stuck in the 1955/65 zone... or can somehow magically keep climbing.

Right now.. the 2000s.... look real difficult to envision... but more on that bigger issue later.

10.21am... messy chop.... I'd be surprised if we take out 1925.

Notable strength: Gold +$12... having had a pretty lousy July.

10.43am.. indexes still battling for a floor, but it looks okay... 1955/65 zone is target...but that will take some days.  VIX continues to cool, -6%

Pre-Market Brief

Good morning. Futures are again weak, sp -12ps, we're set to open at 1918. Metals are a touch lower, Gold -$1, whilst Oil is moderately lower, -0.5%. Equity bears are starting the month in a pretty fierce manner, adding to Thursdays smack down.




*monthly jobs data: 209k net gains, headline rate: 6.2% (previous 6.1%).

Welcome to August.... and we have some real issues this morning.

The 200 day MA on the Dow - 16300s is going to be a major target... along with sp'1900 threshold.

Good wishes for Friday trading

8.33am... with the jobs data... indexes bouncing.... sp -2pts... set to turn green.

No doubt.. this turn is going to really annoy those who are short (via options) and are unable to exit until the official open.

Notable strength: LNKD +8%... on earnings.

Metals bouncing... Gold +$5, but with the July monthly decline, metals look suspect for August.

8.41am.. R2K actually turned green +0.2%....  sp -5pts ...

Hourly cycles remain offering a rebound... best bull case.. by mid next week... 1955/65

8.50am... So.. indexes now set to open moderately higher.. with a major turn on the jobs data... an excuse.

Problem for the bulls.. even a move into the 1950s does little to negate yesterday, and a back test in the low 1960s... would be natural.. before more serious trouble.

*primary target for the bears should be lower weekly bollinger... currently in the low 1810s.

9.03am.. sp -6pts... so that is 1924.... just 1.2% from breaking the 1900 threshold. Hmmmm

9.26am.. So.. we're set to open moderately lower, but with high risk of a rebound today.. and into next week.

The real issue is the market going to get much above 1960 next week? If It can't... then...major downside across August.. with VIX 20s.

Notable weakness: GPRO, set to open -10%.. after 'better than expected earnings'.

9.38am... ... a clear reversal underway....bears...beware!

A rather obvious back test target... in the low 1960s... before more serious market carnage.. possible.

Equity bears seize July

Equity bears managed (surprisingly) to turn July from what had looked to be a moderate net monthly gain, to somewhat significant monthly declines. The sp'500 declined by -1.5% across July, the first monthly fall since January.


Dow' monthly


I'm tired... and although I can think of a hundred charts I'd like to highlight to end the month.. two will have to suffice.

First, we have the sp'500, with the first monthly decline since January. Of course, the decline is only -1.5%, not exactly a huge move, but its a start. Equity bears will need to make good use of August, and should be aiming for a break <1900.

As for the Dow, the broader up trend is in real trouble now. Any break <16300 would take out multiple aspects of support, and open up a huge down wave.. but one which would likely take a few months to fully develop.

Other things this month.... USD gained around 2%, Oil lost 7%, Copper managed the third consecutive (if minor) monthly gain. BDI (Baltic Dry Index) declined for the fourth consecutive month, -11%.

Looking ahead

Friday will see the monthly jobs data, market is expecting net gains of 233k, with a static headline jobless rate of 6.1%.

There is also an array of econ-data, but without question, the market will almost entirely be focused on the jobs data.

*next QE-pomo is next Monday, but that will only be around $1bn

Goodnight from London

Daily Index Cycle update

US indexes closed sharply lower, sp -39pts (-2.0%) The two leaders - Trans/R2K, settled -1.6% and -2.3% respectively. Near term outlook offers chance of a back test to the 1955/65 zone.. before more downside becomes viable.





Suffice to say... the daily charts are starting to look somewhat ugly.

We have clear breaks on all indexes - R2K remains the weakest, but even the Transports now looks headed for a test of its broader upward channel.

The monthly trends remain intact, but with the Dow seemingly headed for a test of the 200 dma in the 16300s... the bulls have a real problem looming in August.

Closing update from Riley

a little more later... to wrap up the month.