Volatility continues to decline

With US equities resuming the climb, the VIX was naturally lower for the fourth consecutive day, settling -8.7% @ 12.90. Near term outlook is for VIX 12/11s. If sp' can break the giant 2000 threshold - whether late Aug or in September, VIX 9s still look viable


VIXdaily3

Summary

*not surprisingly, the VIX was whacked a little bit lower in the closing minutes.
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Little to add.

With the market flooring at sp'1904 last Thursday, the VIX continues to slide, and daily MACD is offering another 2-3 days lower.
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more later.. on the indexes

Closing Brief

US equities closed moderately higher, sp +12pts @ 1946. The two leaders - Trans/R2K, settled higher by 0.7% and 0.8% respectively. Near term outlook is for a break through the 50 day MA of 1955.. which will open up the 1965/70 zone by the Friday close.


sp'60min

Summary

*price structure on the hourly chart is a baby bull flag (not labelled). Market looks set to cruise higher across tomorrow morning.
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So.. the third net gain of the last four days... not too bad a performance from the bull maniacs.

Certainly, the bigger daily/weekly cycles are offering the low 2000s within the next week or two. Although, I'd guess that giant threshold won't be hit until September.

*I hold LONG overnight...seeking an exit 1955/60..tomorrow.
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more later.. on the VIX

3pm update - minor upside chop into the close

US equities look set for the third gain in four trading days. A daily close in the sp'1945/50 zone looks likely, along with VIX in the 12s. A break >1955 will open up the 1970 threshold later tomorrow.. which will not likely be broken through on the first attempt.


sp'60min

Summary

Suffice to say...baby bull flag on the smaller 60/15min cycles.

Considering the daily MACD cycles, we're set to climb tomorrow.

After some thought, I will hold LONG overnight, seeking an exit in the 1955/60 zone.
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Notable strength: airlines, UAL +3.1%


3.20pm... sp'1945 with VIX 13.10s....

Price structure looks a pretty reasonable bull flag...which will be offering 1955 at the open.. if the EU indexes are not spooked by various GDP data.

Metals/Oil, both set to close higher by around 0.2%

2pm update - the little blue candle

However you might wish to count this nonsense, the current blue candle on the weekly 'rainbow' chart should greatly concern those still holding short. Based on the past few years... we have a clear floor of sp'1904.. and we're headed above the 10MA.


sp'weekly2

Summary

*a somewhat tiresome day, and for this hour.. a bare bones weekly chart.

The blue candle should concern those still seeking a break <1900.

Note the upper bollinger.. offering the 2010s in the immediate term
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VIX is reflecting a market that is once again slipping into utter complacency mode... a weekly close in the 12/11s now looks likely.
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**I remain long. I had intended to exit today... but as ever...I might change my mind.

1pm update - afternoon melt

US equities are holding moderate gains, with the sp' above the Monday high of sp'1944. A daily close in the 1945/55 zone looks highly probable, with VIX in the 12s. Metals and Oil are seeing minor chop.


sp'daily5

Summary

Suffice to say... bull flag played out... and we're still on track for the first attempt to clear the 50 day MA of 1955.

If that is cleared early tomorrow..a weekly close in the 1965/70 zone is possible...before the first sig' retrace.
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I'm tired.... back at 2pm.

12pm update - battling to the 50 day

US equities break above the Monday high of sp'1944.. and are proceeding higher (having confirmed what was indeed a bull flag). Metals are seeing minor chop, whilst Oil remains weak, -0.3%.


sp'60min

Summary

...things look okay...although I remain not in the best of moods (post full moon depression?)

Best case for the bulls in the current wave... sp'1965/70 zone.. where there will be very strong resistance.
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VIX update from Mr T.



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time to cook

11am update - clawing upward

US indexes are holding moderate gains, with the sp' still to break the Monday high of 1944. First upside target remains the 50 day MA of 1955, where there are also other aspects of resistance (notably the weekly 10MA).


sp'daily5

Summary

Maybe its just me, but this morning feels more tiresome than yesterday.
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Suffice to say... near term trend looks okay into the 1950/55 zone by late today. I suppose it could drag out into tomorrow, but as noted earlier,... I am not particularly in the mood for holding long overnight.

Notable strength: AMZN +3.6%. I guess everyone is looking forward to the huge loss for Q3 earnings, yes?
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11.15am.. With the break >1944.. .things are pretty straight forward...

Headed to the 50 day MA @ 1955.... probably within a few hours.

10am update - breaking higher

US equities open moderately higher, and we're close to breaking the Monday high of sp'1944. The 1950/55 zone seems likely by early afternoon, at which point we'll probably get stuck. Metals are trying to build minor gains, Gold +$3


sp'60min

sp'weekly8b

Summary

*for me, most notable...the weekly cycle.. where we now have a blue candle. A weekly close >1955 would be VERY bullish, and suggestive of a straight run into the 2000s.
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So, we're higher, with a break outside of the bull flag.

Lets see where we are by 11am.... bulls should be aiming for a break >1945...this morning.
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Notable weakness: M -4.5%, but offering an opening reversal candle.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +9pts, we're set to open at 1942. Equity bulls just need to break through 1944, and that should then lead to the 1950/55 zone. Metals are weak, Gold -$2.


sp'60min

Summary

So.. we're set to open close to the Monday high, and considering the smaller 15/60min cycles, we'll likely break through 1944.. and keep on climbing into the afternoon.

How the market copes with the 50 day MA at 1955.. that is the big unknown.
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*I am long, and am seeking an exit today..in the 1950/55 zone. I do not particularly wish to hold overnight into Thursday, with German GDP due tomorrow morning.
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Hunter with the dollar doomer... Schiff



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Notable early strength: F, +1.6%, DRYS +1.3%

I would look for particular strength in the Transports today, as it will likely break through the 50 day MA.

Good wishes for Wednesday trading :)



9.09am... sp +6pts... 1939.

Notable mover: Macys (M) -4%.. on earnings miss.

Awaiting the sp'1950s

The market has rallied for two days, and seen what was arguably a natural pause day. Equities still look set for further gains, with the 50 day MA now the primary target for most indexes. The more critical upside target remains the sp'1970 threshold.


sp'weekly8b

Summary

Yesterday morning saw the weekly 'rainbow' candle flip from red to blue... but we're currently back to red.

Equity bulls should be seeking a weekly close in the 1940s, that will provide a blue candle for this week, and offer upside to the 2000s in September.

Just consider that the upper bollinger on the weekly cycle is offering the 2010s in the immediate term. This 'best bull case' target is supported by both the daily and monthly cycles. Equity bears need to be VERY mindful that this market could just keep on climbing straight into the 2000s.


Looking ahead

Wednesday will see retail sales and business inventories. Also notable, two fed officials on the loose.

*next sig' QE is Thursday
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Tedious Tuesday, a more dynamic Wednesday?

So.. today was not exactly exciting, but then...it is the sleepy month of August. Things really won't get going until after Labor Day (Sept'1st).

I'm a little bit edgy about holding long into Thursday, when we have the German GDP data. DAX is hanging around the 9k level, and if the data is bad..there is the threat of prices breaking lower.

DAX, monthly, 20yr

As I've been noting for many months, 8k would be the natural downside target - an effective back test of the double top from 2000/2007.

So.. lets see if the market can manage to claw higher by at least 0.8% by late Wednesday..into those 1950s. There are multiple aspects of resistance in the 1950/60s... it sure won't be easy to break into the 1970s.

Goodnight from London

Daily Index Cycle update

US indexes closed moderately lower, sp -3pts @ 1933. The two leaders - Trans/R2K, settled u/c and -0.8% respectively. Near term outlook is for further upside into the sp'1950/60s.


sp'daily5

R2K

Trans

Summary

Suffice to say... two days up...a day of chop.. and considering the hourly index cycles, we're set for further gains tomorrow.

What happens when the market attempts to clear the 50 day MA of sp'1955.. that is a key  issue... and is very difficult to answer right now.

Bulls could easily fail on the first attempt.. but succeed next week.. with a key break into the important sp'1970s.

Best guess... sp'2000s in September....and thus I am holding LONG.
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Closing update from Riley



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a little more later...