Friday 8 August 2014

Net weekly declines for the VIX

Despite lower lows in most indexes this week, the VIX never could break last Friday's high of 17.57. With equities climbing into the weekend, the VIX settled -5.3% @ 15.77.  Across the week, the VIX declined by a rather surprising -7.4% .





As I noted a week ago...'look for a divergence'. We certainly saw that this week, and it is especially seen on the daily chart.

VIX looks set to slip back to the 14/13s.

The real question remains... can the sp'500 break back into the 1970s. If so.. then new equity highs are due... which would likely equate to VIX in the 11/10s.

more later... on the indexes

Closing Brief

US indexes closed with significant gains (after overnight declines), sp +22pts @ 1931. The two leaders - Trans/R2K, settled higher by 1.3% and 1.0% respectively. Near term outlook is for the sp'1950/60s.



...and another wacky week in market land comes to a close.

I'm real tired...suffice to say.. I think its semi-safe to call a floor at sp'1904.

We should battle into the 1950/60s next week... where we'll probably get stuck.

Whether we then unravel in a stronger down wave.... very difficult to say, although for the first time since summer 2011, the monthly cycles are now turning bearish.

*I hold LONG the indexes across the weekend

Have a good weekend everyone.

*the weekend update will be on the US monthly indexes

3pm update - breaking upward

US indexes continue to build gains, with most indexes offering provisional breaks of the down trend. Perhaps most notable this week, the R2K, which is set for a net weekly gain of around 1.5%. VIX looks set for a net weekly decline of around 5-8%.


R2K, weekly


Suffice to say... I'm tired.....

It does look like we have a key floor of sp'1904 (although yes, I said the same thing at 1911 a few days ago).

*I will hold LONG-index (sp/R2K) across the weekend. Seeking an exit in the sp'1950/60s.

3.19pm.. chop chop.. but price action looks bullish into the close. hourly charts offering the 1930/32 zone into the close.

Regardless of the exact close... I do think we have a clear turn.

3.32pm.. bears appear to be closing out...and this is certainly help end the week on a high.

VIX is -5%... which considering the pretty reasonable.

3.44pm.. welcome back to the sp'1930s.

...back at the close.

2pm update - bouncing into the weekend

US equities are breaking out of the down trend, with the Dow +150pts, and sp +17pts @ 1927. The R2K has broken into the 1130s... opening up 1170 next week. VIX is cooling, -5% in the 15s.

sp'60min'3 - fibs


*more than anything right now... the ultimate question is can the bulls break back into the 1970s...opening up the giant 2000 threshold.. before this entire madness from Oct'2011 is wrapped up?

Monthly cycles suggest NO.
...but a fair number of the better chartists out there are suggesting the 2030/50 zone by late Sept/Oct.

*I remain long from sp'1912...seeking an exit in the 1960s... but clearly. that is going to take some days.

1pm update - Transports sitting on primary support

US indexes are holding minor gains, a weekly close in the sp'1920/25 zone still looks viable.. along with VIX 15s. Meanwhile, Transports is holding the broader up channel that stretches all the way back to late 2012.

Trans, daily


3 hours left of what has been a somewhat eventful week....

We're arguably at a key cycle floor, but the real issue high we will go in the next up wave?

Considering the monthly cycles.... new highs seem.....very difficult, even for the super bullish Transports.

 *notable reversals in the airlines, DAL +0.7%

1.11pm..nano scale baby bull flag on the indexes... sp'1920s look due.. with VIX 15s.

1.20pm.. Dow +115pts.. and bears are on the run... and bull chasers starting to jump aboard. I'll be surprised if this doesn't hold... R2K is close to breaking 1130s.... 1127.. if that can be cleared...then 1170

1.31pm.. R2K 1130... sp'1926..... bears will be getting annoyed with this...not least since we were equivalent of sp'1892 overnight.

VIX rapidly cooling, -6%.. in the 15s.

12pm update - clawing higher

US equities are clawing higher (if slowly).. a daily close in the sp'1920/25 zone now seems likely, which should equate to VIX 15s. Regardless of the exact close, it will have been a second week in favour of the bears.


R2K, daily


*something to watch for...the R2K...a break into the 1130s should be enough to clarify that a test of the 1170 area is due. Right now..considering the broader monthly charts.. new highs do not look viable.

VIX update from Mr T.


Notable reversal in the airlines, DAL.. back to flat, from -2.5%

time for....tea..or something

11am update - making a break for it

Equity bulls are trying to make a break for it... to the sp'1920s. VIX has turned fractionally red, having again failed to break last Friday's high. Metals and Oil are both broadly flat.




*I again highlight the issue of the VIX/equity divergence. Despite breaking new lows..the VIX never could break last Fridays high of the 17.50s.  In some ways, you could call it a 'weeks early warning' of the next equity up wave.

So... 90mins in.. and 1904 has held, and we're trading way above the overnight lows.

I can only note again... cyclically speaking.. we're due a wave higher.

Eyes to the R2K... bulls should be seeking the 1130s to break trend... upside target after that is 1170.

11.18am.. pushing higher... we look set to close in the 1920/25 zone.. which would likely melt the VIX into the 15s.

10am update - opening chop

US indexes open a touch higher, but the gains look very shaky. Bulls need to break into the sp'1920s to have any hope that the current down wave is exhausted. Metals are seeing minor chop, Gold +$1.




*hourly MACD cycle is due a wave higher.

Again, its another open that looks prone to reversing lower at any point.

Daily 10MA @ 1937...there is a lot of overhead resistance... esp' the 1950/60s. Considering the monthly cycles - all rolling over, how are we going to break into the 1970s again?

Notable weakness, airlines, DAL & UAL both -2.4%

re: VIX, bulls need a break below 15.50. That is possible today, but.. like yesterday, it will only take one news story to spook the market...

Eyes to the R2K, bulls need the 1130s... which would be a minor break of the down trend.. which is now SIX weeks in duration!

10.07am... Maybe its just me, but I feel like I've been a washer dryer on medium spin for the last day or so.

Right now...I am still looking for a break to the 1960s... what happens then.. well, that IS the ultimate issue now.

10.25am.. its kinda weird how narrow the trading range is right now.

Cyclically speaking, we should break higher from here... but it remains a real choppy mess overall.

10.45am.. micro bounce...bulls just need 1920 to break trend...which would start hitting a lot of short-stops. VIX turning red.

Pre-Market Brief

Good morning. Futures have swung higher from overnight lows (sp -17pts, 1892), we're set to open a touch higher, +3pts @ 1912. Metals are similarly moderately higher, Gold +$4. Equity bulls should be desperate to hold the sp'1900 threshold.



*as for the count on the hourly chart.. I only have 'moderate' confidence in it. Cyclically speaking, we're due an up wave.. to the 1960s. As ever though, geo-pol issues can invalidate any 'natural waves'. 

... so, I go to sleep to a red screen.. and 7 hours later......I awaken to moderately green.

For me, this market is starting to get real messy, and I'm starting to get rattled.

Update from Mr C


For those of you who are in a particularly doomster mood... here is Hunter, with an end week report on all the geo-pol issues.


Best guess on today?

Purely on a cyclical basis, we're due to push back upward... but many seem resigned to the sp'1880s.. or even the 60s - where the 200 day MA is.

Personally, I'm starting to wonder - not least when I reflect upon the monthly cycles, if there is any real chance the bulls can break >1991 in the rest of the year.

Good wishes for Friday trading.

8.37am.. sp +6pts @ 1915... but as noted yesterday, until we're back in the 1930s, bulls have little to be confident about.

Those who think the sp'1880s .. or lower are due, should be seeking VIX >17.60 this morning.

9.49am.. opening equity gains, but its looking a real mess....somewhat understandably, some will be shorting this opening micro bounce.

Still awaiting a turn

US equities broke another new low today of sp'1904. Yet the VIX shouldn't overly inspire the doomer bears, and remains stuck below last Friday's peak of 17.57. All things considered, the market is still due to turn upward.. if only to the sp'1960s.

sp'weekly8b - bullish outlook

VIX, weekly


The bigger weekly cycles are starting to look kinda ugly. Unless we get a major rally tomorrow into the 1930s, we're going to close the week with a red candle.. and we've not seen two consecutive red candles since late January.

It remains notable that despite another new cycle low in equities, the VIX has not been able to break above last Fridays high of 17.57. With each passing day, such a divergence is increasingly bullish for the market.

The German DAX turns bearish

For you regular readers out there, you know how I tend to obsess over the weekly or monthly cycles more than the 'minor noise'. It is a pretty rare event to have a MACD cross over on the monthly cycle.... the DAX is currently seeing one..

DAX, monthly

Most notably.. the two previous bearish MACD crosses, Aug'2011, Jan'2008. If I didn't know any other markets data... I'd be real bearish right now.

*DAX is notably now at MARCON 6, the first real warning of trouble.

Looking ahead

Econ-data - productivity/costs, and wholesale trade data. In the scheme of things, most won't give any attention to those.

*next sig' QE-pomo is next Thursday.

King O' gives the bears a late night gift

As of 10.45pm EST, US airstrikes on Iraq are now due... and futures are naturally already 0.6% lower, sp -13pts, that will offer 1896 at the open. A weekly close in the 1900s now looks doubtful. After all, if we're sub 1900 tomorrow morning, why the hell would it stop there?

For those of you who think sp'1991 is indeed a key multi-month high, then the natural target should be the lower weekly bollinger...

sp'weekly8c - bearish outlook

...which is currently all the way down at 1817.

With the latest geo-political developments, no one will be able to complain that Friday will boring.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately lower, sp -10pts @ 1909 (intra low 1904). The two leaders - Trans/R2K, settled -0.2% and -0.5% respectively. Near term outlook is for renewed upside, at least to the sp'1960s.




So... a day for the bears, and with a new cycle low of sp'1904, we remain within a near term down channel.

Equity bulls need to break into the 1930s to have any confidence that the current down wave has concluded. Even then, there will likely be VERY strong resistance at the old busted support - now resistance, in the sp'1960s. It is going to be tough for the market to break into the 1970s.

As for the Dow, not surprisingly, it has fractionally broken the 200 day MA, but then it did that in early February... and most should remember how things went from there.
a little more later...