Wednesday 17 September 2014

Volatility continues to fall

With the FOMC announcement out of the way, the VIX was knocked lower, settling -0.6% @ 12.65, although with an intraday range of 14.53/11.73. VIX looks set to remain in the 14/10 zone for the next 3-5 weeks.




*a notable spike at the time of the FOMC announcement - back to the opening Tuesday level.. but it lasted just seconds.

Little to add.

VIX remains low, and with indexes set to climb, the VIX will remain subdued.

more later... on the indexes

Closing Brief

US equity indexes saw morning weakness, with an FOMC announcement spike low of sp'1993. There was some distinct strength in the late afternoon (intra high 2010) but settling  sp +2pts @ 2001. The Dow and Transports broke new historic highs of 17221 and 8695 respectively.




Without question, another day for the equity bulls, and with the FOMC out of the way, the road is clear into October.

It looks like we're headed at least to 2030, if not the 2050s in October.

I'd guess we might open a touch lower tomorrow, sp'1998/96.. before resuming higher...

I will look to go long early tomorrow, no later than 11am.

more later.. on the VIX

3pm update - battling into the close

US equities remain moderately higher - if somewhat choppy. The spike floor of sp'1993 looks unlikely to be broken in the near term... with the hourly/daily charts both offering 2010/12 in the immediate term. VIX is confirming a somewhat 'placated' market.



So...we're higher.. and with the Dow breaking a new historic high, I think no one can justifiably get bearish in the near term.

We look headed for the sp'2030/50 zone... perhaps 2060/70 in October. DIfficult to be more precise at present.. but regardless...

We ain't headed lower.. are we?

3.01pm... another nano cycle upward... a daily close around 2010.. very viable.

I've only just noticed, not only has the Dow broke a new historic has the Transports.

3.10pm... sp'2010.... Dow 17200s....quite..a.... sight!

3.14pm  VIX -7% in the 11s... utterly reflecting a market that is afraid of nothing. After all, everything is protected by the Fed, yes?

Notable weakness, coal miners, BTU -1.6%... but then, that sector has been crushed since spring 2011.

3.23pm... 5/15min cycles rolling over... equity bulls only need hold >1995... plenty of buffer zone.

3.27pm.. Thank the gods... Yellen has finally stopped.... having refused to offer her view on the Scottish vote, lol.

bullish independence?

3.34pm... minor wave lower... we look set for 1998/96 zone... early tomorrow. That would make for a fair entry....

..and I will consider picking up an index-long tomorrow.

3.37pm.. rats are selling into the close... kinda interesting...VIX might even close green, hmmm

3.48pm... sp'1999.... another 2-4pts... should

BACK at the close.  :)
*ps. hello to the person in San Diego... I see you out there Ms. C (I guess its you ;)

2pm update - time for QE taper seven

US indexes continue to melt moderately lower, ahead of the FOMC announcement at 2pm. Market is expecting QE taper'7, taking the monthly QE fuel down to $15bn from Oct'1st. The only uncertainty is what Yellen might mutter in the press conference.



I realise some will be looking for a major wave lower starting this afternoon.. and eventually taking out the recent sp'1978 low... but really.. weekly cycles look fine.

Depending on price action after the 2pm announcement, I might pick up another long-index block...

Right now, target entry is the 1995/90 zone.

I'll be real surprised if we fall into the 1980s today.

updates across the rest of this afternoon... not least if we get some more dynamic price action!

2.03pm.. QE taper... CNBC liesman says 5bn... I think he can't count.


still seeking 1995/90

2.04pm.. CNBC finally realise... $25bn  -10bn  = $15bn net.

2.08pm.. Well, we hit right in the middle of the target box 1993....

I'm still waiting for things to settle down a bit...

VIX briefly hit 14.53 - yesterdays opening level

2.11pm.. Price action remains twitchy.. and with Yellen still ahead.... there remains possibility of another minor wave lower..if only to re-test 1993.

Regardless, I ain't interested in buying at these levels....just before Yellen.

2.14pm.. sp'2005.... breaking out.... and I ain't chasing it. Oh well, at least I'm not short!

2.19pm.. hourly/daily charts offer 2010/12 by the close of today.

Yellen due around 2.30pm... maybe she'll keep her mouth shut on the issue of rate increases?

2.27pm.. Well.. we're continuing to push higher...

*Dow at new historic high..

time for the little old woman to start telling us how things are 'on track'...

2.29pm. VIX in the 11s... sp'2007.... new historic highs coming....

2.35pm.. Are we feeling better now, that Yellen is telling us its ALL fine?

Indexes vulnerable... but I don't expect the 1993 low to be broken now.

2.43pm.. Yellen sure is talking about interest rates a lot!

Indexes remain twitchy... sp'2004...... vulnerable to losing 2000.. not that it really matters.

2.47pm.. Equity bulls have little to be concerned about, unless <1995 at the close.

1pm update - awaiting the Fed

Mr Market has continued to very slowly slip... into the sp'1990s, with VIX moderately higher in the low 13s. Things will likely get more choppy with the Fed announcement, but more so... the Yellen press conference.




Little to add, a quiet hour is ahead.

Right now, at best, the equity bears might see 1995... 1990 looks a stretch.

Certainly, no matter what the printing maniacs put in their press release, the recent low of sp'1978 should hold for some weeks (perhaps months)... to come.

*I am on the sidelines..seeking to re-long later today...

1.32pm..  .. indexes still slowly melting this rate, we'll floor at the announcement, rather than briefly after.


12pm update - the chop continues

Equities continue to see minor weak chop ahead of this afternoons FOMC announcement (2pm). No doubt the fed will announce QE taper'7, but.. will the Yellen say something stupid about interest rate policy?

sp'15min'2, H/S formation scenario


Little to add...

Possible H/S formation setting up. If so.. primary target is around 1995.

Best guess... 1995/90 zone later today.. before more upside.

time for lunch

12.40pm.. With the break to 1997.. it invalidates the H/S scenario.

So... back to the original ABC outlook...

11am update - minor chop

US equities appear to have seen an early morning peak of sp'2004. A move lower to sp'1995/90 seems very viable later today.. which might equate to VIX in the mid 13s. Oil is weak, -0.5%.



Right now, there is little to add.

There is a possible micro H/S formation.. if we can slip to 2000 within the next hour....

Regardless, most will be sitting on the sidelines until Yellen has stopped talking.. but that might take us to 3.15/30pm.

*seeking to go re-long later today

11.35am... indexes set to turn red...   VIX +3%...

10am update - minor wave lower into the afternoon

Equities open moderately lower, but there would seem pretty high probability for an intraday pull back... into the afternoon. A brief fall to the sp'1995/90 zone would be somewhat natural.



*I exited a small index-long at sp'2003.. will seek to re-long later today... certainly, the 1995/90 zone would be a far better place.

So.. long day ahead...

The Fed decision will no doubt be to cut QE again, but...will the fedspeak placate..or annoy the market?

There is a press' conf' with Yellen, and there is always risk she will say something stupid about int' rates that might briefly upset the market.

Regardless, the broader trend IS up.


...back to green.  The 2030s look a pretty easy target within 2-3 weeks.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at the 2000 threshold. Metals are higher, Gold +$2. Equities look set for further gains today, first upside target is around 2010/12.



Suffice to say.... we have an interesting day ahead.

Update from the Permabull

Good wishes for Wednesday

9.40am.. EXITED spy-index long...  from sp'2003.

Will look to go heavy long.. on the next pull back...whether late today..or Thur/Friday.

Rough day for the bears

Despite equity indexes closing with just moderate gains, with the break of the short term down trend, it was a particularly disappointing day for the equity bears. The fact the Dow broke a new historic high of 17167 only added to the dismay.

Dow, weekly



Without question, the new historic high in the Dow is a real warning to the equity bears that the rest of the market will likely follow in the days ahead.

The current weekly candle on the sp'500 'rainbow' chart remains blue, but another day higher.. and it will likely turn green. That would bode for a straight run to the 2030s by end month.

Looking ahead

Wednesday will be mostly about the FOMC, although I sure don't expect any surprises there. Market is expecting QE-taper 7, taking the monthly QE fuel down to $15bn as of Oct'1st. There will be a press conf' with Yellen around 2.30pm.

There is also CPI, housing, and current account data.

*next sig' QE is Thursday, but that will be a mere $0.3bn or so.

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately higher, sp +14pts @ 1998. The two leaders - Trans/R2K, settled higher by 0.6% and 0.4% respectively. Near term outlook offers new historic highs for most indexes - although the R2K remains a particular laggard.




*the Dow was a notable index today in that it broke a new historic high of 17167.

The daily charts for most indexes are offering rather clear bull flags spanning the past few weeks.

Whether you want to label/count the recent wave as a 2, B, or whatever, we look to be in a new up wave..which in theory.. should be stronger than the move from 1904-2011.

Closing update from Riley

a little more later...