Friday 10 October 2014

A hugely important weekly VIX close

Regardless of the strong swings across the week, the VIX broadly climbed, hitting a new cycle high of 22.06, and settling the week +11.5% @ 20.92.This was the first weekly close above the 200 MA since late 2011.




*net weekly gains of a rather extreme 43.8%

Without question, the VIX achieved THREE key things today...

1. A break above the 20 threshold
2. A break above the high from 2013 (21.90s).
3. A weekly close above the weekly 200MA (>17.40s)

It is the third issue that in my view is absolutely major. A number of other chartists/market watchers have also mentioned the importance of the VIX weekly 200 MA.. and we now have a clear signal.


I'm still looking for sp'1904 to be tested early next week, although the VIX probably won't break this mornings high.

VIX to drop across the next few weeks, as equities rally to 1970/90 zone, then the VIX to go nuclear, no later than early November.

more later.. .on the indexes

Closing Brief

US equities ended the week having broken a new cycle low, settling -22pts @ 1906. The two leaders - Trans/R2K, settled -2.0% and -1.3% respectively. Near term outlook is still offering a test of the sp'1904 low.. before a significant bounce.



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

The week opened moderately higher at sp'1977.... but with a new low of sp'1906.. along with VIX 22s, the bears can get rather confident of how the rest of the year will proceed.

...for now.. that will suffice.

The usual updates to wrap up the week... across the evening.

Have a good weekend everyone

3pm update - another week for the bears

US equities look set to close the week on a weak note, but regardless of the exact close, it has been a week for the bears. Most indexes will see net weekly declines of 2-3%, with the Trans 'old leader' lower by a very powerful -5.5%.


Trans, weekly


*I see little point in getting lost in the minor noise for the closing hour.... the weekly charts are all that is necessary.

Big declines for ALL indexes.. with VERY significant technical damage all over the place... as confirmed by a VIX that broke to levels not seen since 2012.

I've not said it yet.... but I will likely make a bold call later this evening...  but more on that... later!

3.08pm.. Rats getting twitchy again... sp'1916.... new lows... viable.

3.25pm.... bull maniacs getting rattled, especially in the tech, Nasdaq -78pts @ 4290s

With VIX in the 20s... this is a CRITICALLY major success for the equity bears.

3.34pm... Fun end to the week huh?

Look at those bull maniacs bail..... ironically, selling a mere 0.5% above what will likely be a key floor anyway.... haha.

3.49pm... see them jump ship..... hahahaha... right at the lows.... this is VERY entertaining end to the week.

VIX +10% in the 20.70s..... a clear 3pts above the level I was seeking (17.40s).. for a critically important signal.

Well done bears!

3.51pm... great end to the week.. seeing the bulls get washed away.

3.55pm.. sp'1907... 3pts to go..... we might even break a little under... not that its important. Weekly charts offer HUGE support around 1900.

back at the close!

2pm update - afternoon chop

US equities continue to see some mixed chop, having broken a significantly important new low of sp'1912.. with the ultimately important VIX 22s. Renewed weakness after 2.30pm seems likely, with a daily close somewhere in the 1925/20 zone.



Regardless... another week for the equity bears... and those weekly charts sure look promising for late Oct/early November.


1pm update - still looking for 1904

This mornings low of sp'1912 is unlikely to be the low of the current cycle. Regardless of how we trade in the remainder of the day, another move lower seems likely early next week, before a floor can solidify. VIX is holding up well considering the current equity bounce.




*now that've seen a few more key signs achieved, I will be starting to post up more targets, especially for VIX.

With 3hrs left of the trading week... bears have achieved a HUGE amount, not least with the VIX.

Will be interesting to see what kind of selling we see in the late afternoon. After all, who will want to be long across the weekend?

Notable weakness: INTC -4.1%  , SDRL -3.7% in the $23s.

12pm update - there is clarity now

With the drop to sp'1912, along with VIX 22s, there is some very significant clarity in the bigger picture. With the bigger weekly/monthly cycles warning of trouble... the bears can start looking forward to the rest of the year.



So... some mixed chop right now, but its not important...

The damage has been done to the giant wave from Oct'2011... key bearish signs/signals are going off all the place.. multiple indexes, VIX... etc etc.

After some real twist and turns across the week... there is now clarity about where we are broadly headed.


VIX update from Mr P.

time to see what the cheerleaders on clown finance TV are saying. I will say, they have been pretty entertaining this week, as they continue with their 'buy mantra'.

11am update - VIX breaks the 2013 high

The VIX (if briefly) breaks to 22.06, surpassing the 2013 high. Many are now starting to realise 'something new' is underway. A VIX weekly close above the 200 MA in the mid 17s - now seemingly a given, arguably confirms the equity wave from Oct'2011 is.... complete.

VIX' weekly



Well, I've seen more than enough now... I could reel off a long list of reasons... but if you're a regular reader.. you know what I'd say anyway.

Suffice to say... on the next bounce... somewhere from 1910/00... to 1970/90..... I think it will make for the best re-short since July 2011... and we know what happened there, right?

time to cook

10am update - opening chop

US equities open with some moderate chop, but clearly breaking the sp'1925 floor.. Equity bulls might see a little bounce into 11am, before the selling resumes. After all, how many of the momo chasing rats will want to be long across the weekend?




Certainly, I think yesterday was the biggest down day we're going to see in the current down cycle.

Targets remain unchanged... it is really just a case of seeing how low we can push into the weekly close.

*equity bulls should be seeking a VIX weekly close above 17.50... which would make for a huge technical achievement.

Notable weakness: oil/gas drillers, RIG -2.5%, SDRL -3.6%

...time to shop... back soon

10.37am.. back from the store... with a wheel barrow of essentials (but no wine)...

So.. sp'1912..... 8pts to go.. with VIX 20s....

WELCOME BACK VIX 20s....  ;)

Pre-Market Brief

Good morning. Futures are moderately lower, sp -7pts, we're set to open at 1921, breaking the key double floor of 1926/25. A key hit of the lower weekly bollinger in the low 1910s looks a given today... which might equate to VIX 19/20.



So.... we've taken out the key low... and we're continuing on our way lower.

Primary target looks to be the 200 day MA on most indexes, certainly sp'1904 looks viable today.

To be clear..... I do not expect a sustained move under 1900 in the current multi-week down wave.

Update from Oscar.. who is back to bearish

This is 'something different' Mr C notes... yes... and that is EXACTLY what I've been noting for some time. This is especially the case on the bigger weekly/monthly cycles. Price action/structure IS different from anything we've seen since late 2011.

Good wishes for Friday trading

8.56am.. Futures turn back to flat.... sp'1928... but still... there seems little reason why we won't fall another 1% at some point today.

Indeed, to hit 1904, just need a daily fall of 1.2%.... VERY viable... and that would make for a floor...before the earnings really start to flood in next week.

The bigger cycles remain key

Whilst many market watchers get lost in the minor intraday, or day to day noise, there is infinitely better clarity in the bigger weekly/monthly cycles. At no point this week did the weekly cycles turn bullish (even at the Monday sp'1977 high).

sp'weekly7a - H/S scenario

R2K, monthly3 - fib levels


We continue to hold the second red candle on the weekly 'rainbow' chart, and look headed for a hit of the important lower weekly bollinger.

Yes... the H/S scenario is just one way things could pan out.. .but still.. its a personal favourite

As for the R2K... it is completely broken.. headed for 1000.. if not the low 900s.

Looking ahead

Import/export prices, and US Treasury budget, but who cares about those?

There are 4 fed officials due to speak... and perhaps that will cause more upset for Mr Market.

*next QE is Tuesday

Goodnight from London

Daily Index Cycle update

US equities saw very significant declines, sp -40pts (-2.1%) @ 1928. The two leaders - Trans/R2K, settled lower by -2.4% and -2.7% respectively. Near term outlook is for a full test of the August low of sp'1904... which should equate to VIX 21/23s.





*I'm tired... so.. suffice to say...... outlook remains bearish... at least to sp'1910/00 zone. The 200 MA (sp'1904) will now be a key target for bears to exit.. and many will likely be going long there.

Closing update from Riley

a little more later... to close the day.