Tuesday 12 August 2014

Volatility fails to hold gains

Despite US equities closing moderately lower, the VIX was unable to hold minor gains, settling -0.7% @ 14.13. Near term outlook is for the VIX to continue declining into the 12/11s. The 10s.. even 9s are briefly viable if sp'2000s.




*a notable third consecutive daily decline for the VIX

Price structure is a bear flag on the hourly chart - as a near mirror of the bull flag on the hourly equity charts. VIX looks set for further downside... whilst the indexes push another 1-2% higher

more later.. on the indexes

Closing Brief

US equities closed moderately mixed, sp -3pts @ 1933 (intra low 1928). The two leaders - Trans/R2K, settled u/c and -0.8% respectively. Near term outlook is for the sp'1950/55 zone, with slight opportunity of a straight run to the 1965/70 zone.



*I added a fib' extrap - linking the 1904/44 zone, best case for the bulls is probably the 1965/70 threshold, but that seems 'difficult'.

..and a somewhat tedious day in market land comes to a close.

There really isn't much to add.

A two day bull flag... and we're set for the 1950s tomorrow.

*I hold long overnight, seeking the 1950s.

more later.. on the VIX

3pm update - structure remains a bull flag

US indexes remain moderately weak, whilst overall price structure remains a bull flag. Primary upside target remains the 50 day MA of sp'1955.. which seems very viable for Wednesday.



Today has no doubt really frustrated and bored many...

Two up days...
A day of chop...

Wed/Thursday, a push into the 1950/60s.

The bigger issue is what happens then.. but more on that later...

*I will hold long-indexes overnight, seeking an exit in the 1950/55 zone.

3.20pm  a close around1933/35 seems probable.. VIX could still close red.

back at the close...

2pm update - tedious weak chop

US equities remain moderately weak, but price structure remains a very clear bull flag on the smaller hourly cycle. VIX is not reflective of any sig' market concern, and market looks set to climb into the sp'1950s tomorrow.



...little to add.. on what is a very quiet day.

Today is a good opportunity for anyone to re-position..whether.. long or short. There can be no excuses for complaints tomorrow!

Notable strength in the Ocean transports, DRYS +3%, EGLE +9%,

1pm update - still waiting

US equities remain seeing minor weak chop,  sp -4pts @ 1934. Despite the weakness, VIX is already close to turning red. Metals are holding moderate gains, Gold +$5.



Price structure is a bull flag... we're still set to proceed higher.

VIX is due to close red.

*I will certainly be content to hold long overnight... seeking next exit in the 1950/55 zone.

12pm update - awaiting renewed upside

US equities are attempting to rally from a morning low of sp'1929. Despite the minor declines, VIX remains weak, and will probably turn red this afternoon. Metals are holding moderate gains, Gold +$6.



Suffice to say.. minor chop... upside into the 1950s looks likely tomorrow.

Price structure is still a bull flag...now spanning a good 7/8 trading hours.

VIX update from Mr T.

time for lunch

11am update - minor chop

US equities are seeing minor chop, but with the bears looking powerless, it seems just a matter of when we'll be in the sp'1950s..rather than if. Metals continue to build gains, Gold +$7, whilst Oil is still sliding, -0.7%.



Seen on the bigger daily cycle, first target is pretty obvious, and whether today..or later this week, we'll surely be in the 1950s.

Notable strength: DRYS +3.7% @ $3.07  (see my 'fair value' post from yesterday).... a break much above 3.10/20 would be significant.

11.27am... everyone getting a chance to add/re-position...

Worse case seems 1920/15 zone.....but still... 1950s look fine....

*despite the weak indexes, VIX is only +1%....won't take much of an equity turn for that to close red.

10am update - opening reversal

Equities open a touch lower, but we're seeing a rather clear reversal to the upside. First target remains the 50dma of sp'1955.. that is certainly viable today. Metals are moderately higher, Gold +$5, whilst Oil is -0.5%



So.. an opening reversal.. and the bull flag remains intact.

A break >1944 will confirm the 1950s are due in the immediate term.

10.20am.. chop chop... no downside pressure...   we'll surely resume higher..just a matter of when.

..yours... not in a particularly patient mood.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1938. Equity bulls need to break the Monday high of 1944, which will open up the 1950/55 zone. Metals are trying to bounce, Gold +$3. Oil is weak, -0.4%.



As noted yesterday, price structure is a rather clear bull flag. I'd be very surprised if we break lower this morning. In theory, we should break above the flag this morning, into the 1950s.

*I am long..and will look to exit somewhere in the 1950s.

Update from Mr C.

Good wishes for Tuesday trading.

9.18am.... indexes turning red.. . sp -3pts.. so.. 1933.

Regardless...daily charts are pushing UP... 

9.38am... spike floor 5/15 min cycles... market wants to climb.

A bounce or new up wave?

US equities closed higher for the second consecutive day, and the issue now is whether the market will put in a lower high (<sp'1991).. or whether this is merely the start of another multi-week up wave. Best guess....sp'2030/50 zone in September.




So...a second day higher, and we're on our way to the first target zone of the 1950/60s. The big issue is whether...

1. we get stuck 1950/60... fail....and break a new low <1904
2. we get stuck...   fail..... but put in a higher low >1904...and break 1970s on 2nd attempt
3. we just push right through into the 1970s

Personally...I'd guess, scenario '2'.

Chart daily'3 is a simple Fibonacci 1.6x extrapolation... it might be overly bullish, but if the giant sp'2000 threshold is breached, a further 2% wouldn't be that much to expect.

Looking ahead

There is nothing of any real significance tomorrow.

*next sig' QE is Thursday

Video from Gordon T Long - Tops are a process

*The following was posted on youtube over the weekend, but was originally released for Mr Long's subscribers in June.

Interestingly, downside to the low 1600s I'd agree with, along with a subsequent major bounce.. perhaps to a new high. As ever, always worth seeing.

I'm trying.... really

So... I exited this morning at sp'1941.. and long again this afternoon from 1937. Hourly cycles are offering a bull flag..and frankly.. the sp'1950/55 zone looks a rather easy target. The only threat is a sporadic news story, but hey, isn't that always the case?

Right now, I'm trying to be careful, make some gains on the long side, and be mindful that the bigger monthly cycles are rolling over. A peak in the low sp'2000s next month looks very viable, and would make for one hell of a level to short the market from.

Goodnight from London

Daily Index Cycle update

US indexes closed higher for the second consecutive day, sp +5pts @ 1936 (intra high 1944). The two leaders - Trans/R2K, settled higher by a borderline significant 0.8% and 0.9% respectively. Near term outlook is for the sp'1950/60s.





The more significant strength in the two leaders - Trans/R2K, is especially bullish for the rest of the market this week.

With the break into the 1130s, R2K looks set for the 1160s...the 1170s is first key resistance, and we'll probably get stuck there...if only for a minor retrace.

Closing update from Riley

a little more later...