Tuesday 19 August 2014

Yet another daily decline for the VIX

Volatility declined for the 7th day of 8, settling -0.9% @ 12.21 (intra low 11.91). Near term outlook is for VIX to remain relatively subdued. Even if the market is briefly spooked post Jackson Hole (Friday), VIX is unlikely to break any higher than the mid 15s.



Little to add.

VIX is certainly low, but could remain in the sub teens for some days to come.

At best, equity bears might see VIX 15s.. if sp'1950/45 zone early next week, but there is low confidence in such a scenario.

On no outlook do I have any interest in being long the VIX for at least another month.

more later..on the indexes

Closing Brief

US equity indexes climbed for the sixth of eight trading days, sp +9pts @ 1981. The two leaders - Trans/R2K, settled higher by 0.1% and 0.3% respectively. Near term outlook offers the 1995/2000 zone, before some degree of post FOMC (or Friday Jackson Hole) downside.



There is little to add on what was a rather typical day of low volume algo-bot melt.

It is truly tiresome..and for many, this is not even a market worth watching.

*I am content on the sidelines, with zero interest in chasing the market higher at these levels. 

more later.. on the VIX

3pm update - renewed upward melt

US equity indexes see a further micro wave to the upside, with the sp +10pts @ 1982.. a mere 9pts shy of the 1991 historic high. The upward channel from Aug'7, offers the 1995/2000 zone for Wed' afternoon.



So...a few more points higher...and we're now getting damn close to breaking new highs.

Equity bears have little hope until at least tomorrow's FOMC minutes (2pm). A more viable 'downside break' appears possible with Yellen on Friday morning.

Problem is of course... the next down wave might be starting from 2000... rather than 1980.

Right now...1950/45 zone seems the very best downside case... post Yellen...early next week.

On ANY basis..this is no market to be shorting.

*I am content on the sidelines...and would only consider a long in the 1960/50 zone... but that seems unlikely until next week...if at all.

Notable strength: coal miners, BTU +3.0%

3.26pm... it remains tedious. Micro cycles offer 1980/78... but..its all noise...and nothing for the bears to get interested in.

back at the close....

2pm update - 90mins... 1 point

Market has effectively flat lined (are we actually still open?)... trading within a 1pt range for the past 90 minutes. Metals remain weak, Gold -$3, whilst Oil has snapped significantly lower, -1.3%.



An incredibly tight trading range...and there is little reason to expect anything to change until tomorrow at 2pm.

Notable strength, coal miners, BTU +2.8%, ANR +4.6%

2.28pm.. ohh lookie...shorts getting stopped out...and we're melting higher again... 1982...

0.4% shy of a new high.

Crazy market....

1pm update - call me when the melt ends

The slow grind continues, and we're now in the sp'1980s.. a mere 0.5% from new historic highs. The hourly cycle will be offering 1995/97 tomorrow afternoon. In theory, if Mr Market likes the FOMC minutes, then 2000s are briefly viable.



Little to add.

It would seem to be a case of how high will we melt to...by tomorrow afternoon.. and then...what degree of down wave could we get.

Friday morning... bears need to just break 1975 to cause some trouble.

Notable gains...AAPL, +1.3% in the $100s. Many seem agreed...$110s now viable within 2-4 weeks.

1.28pm...  one full hour..... a 1pt range.


12pm update - grinding the bears to dust

Today is day'8 since the sp'1904 low, and it makes for a gain of 3.5%. There is nothing of significance due to stop the melt until the FOMC minutes (due Wed' 2pm). Metals remain weak, Gold -$4, whilst Oil is -0.4%.



Little to add, on what is a very subdued day of algo-bot melt.

time for lunch

12.11pm... AAPL hits $100.... and VIX slips into the 11s.

It sure is quiet out there.....

12.27pm.. No VIX update from Mr T. Is optionmonster crew all on holiday?

I'm seeing some good finance videos, will highlight them later in the evening.

Notable strength: AAPL +1.2% @ $100.30

12.33pm... and here are the 1980s...urghh

In theory... hourly cycle is offering 1990s at the Wed' open..and 1995 by the FOMC minutes.

A market test of 2000 tomorrow at 2pm...and then a sub'2 wave into early next week?

11am update - tedious melt mode Tuesday

The market is in classic melt mode, clawing higher...if extremely slowly. The sp'500 is a mere 0.7% from breaking a new historic high, and considering the Nasdaq (leading the way)... looks set to follow.



*notable weakness, metals and Oil, both moderately lower

Already, its become a pretty tedious day.

Next opportunity for a down wave... the FOMC minutes, but those aren't due until 2pm tomorrow.. and we could be in the 1980/85 zone by then.

By late Friday, the rising channel will have a floor of 1980..so the bulls have to keep pushing... not that the broader trend is in any trouble.

Anyone still think sub 1904 is viable in the near term?

10am update - opening minor gains

US equities open a little higher, but the 15/60min cycles are offering an opening reversal. There is 'best bear case' downside to sp'1965/60... before renewed upside to challenge the historic high of 1991. Oil continues to slide, -0.2%




*VIX is a more strong indicator right now...  two minor gaps...the 15s won't be easy to hit...not least if we only trade down to sp'1960.

So...lets see if the bears can knock things lower from the opening high of sp'1976.

**I remain on the sidelines, would consider going LONG @ 1965/60

Notable strength: DRYS +1.5% @ $3.30... continuing on its way to the $4 threshold.

10.22am.. so much for an opening reversal.. VIX failed.. and we're back to melt mode.

Oh well... no shorting this market... I think most can agree on that much.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +3pts, we're set to open at 1974. Metals are trying to climb, Gold +$2, whilst Oil is +0.3%. Underlying price momentum continues to swing back in favour of the bulls.. with the sp'2000s due.



*awaiting CPI data

Certainly, the hourly cycle is offering an initial sign of a rollover, but we'll surely just put in another higher low... probably in the 1965/60 zone, whether today, tomorrow.. or later in the week.

It really makes no difference.

Most seem quite resigned to the sp'1980/90s..., and eventually, given a few weeks, the 2000s.

*I'd consider going long in the 1965/60 zone..unless I see that... I'm content to sit on the sidelines.

Bulls back in full control

Equity bulls are back in full control, with all the bigger cycles now back to outright bullish for most indexes. The weekly 'rainbow' candle is confirming sp'1904 as a key floor, with viable upside to 2020/30 in early September.



*first, I'll start with reference to last Friday. Price structure was a baby bear flag, and there was indeed viable downside to the sp'1930s, with VIX 15s. As I noted at the time though, I have ZERO interest in attempting to trade the short side, whilst the primary trend is UP.

So.. I have missed out on gains today (closed LONG Friday morning at 1962)...but at least I'm not losing on the short side.

Looking ahead

Tuesday will have CPI data and housing starts. That should be enough to give the market an excuse to move in the early morning.

*next sig' QE is Thursday

Waiting for a far better top to short

The recent down wave from 1991-04 was marginally interesting, but I continue to have no interest in trying to trade such tiny down waves. They are overly difficult to trade in my view...and simply not worth the effort.. or risk.

Instead, I remain looking for a key multi-month top, the following remains something I am keeping in mind...

sp'weekly9 - fib levels

Underlying MACD (green bar histogram) will likely tick upward for another 4-6 weeks, and then start to level out. So.. I'll only be interested in attempting to short the indexes/long VIX in mid/late September.

As ever, I'll endeavour to keep an open mind, and will adjust the outlook as I see fit in September.

Goodnight from London

Daily Index Cycle update

US indexes started the week with significant gains, sp +16pts @ 1971. The two leaders - Trans/R2K, settled powerfully higher by 1.7% and 1.5% respectively. Near term outlook is for the sp'1980/90s..with the 2000s no later than early September.


Nasdaq Comp'


Most notable aspect, the Nasdaq, which broke new post 2009 highs with a 1.0% net daily gain. The 4600/700s look viable into early September.

Dow looks set to follow into the 17200/300s. Indeed, only the R2K looks set to struggle to break new historic highs.

Closing update from Riley

a little more later...