A second major weekly decline for the VIX

The October high of VIX 31.06 now looks like it won't be surpassed for some months. With equities breaking new historic index highs, the VIX settled -3.4% @ 14.03. Across the week, the VIX declined by a significant -12.9%.


VIX'daily3

VIX'weekly

Summary

Suffice to say... the second major net weekly decline, but if you include the giant pull back from the spike of 31.06..the VIX has now been cut fully in half.

Now the issue is not so much whether 30s are viable before year end... but if the VIX can push (if briefly) into the low 20s.

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more later.. on the indexes

Closing Brief

US equities ended the week with strong gains, sp +23pts @ 2018. The Dow broke a new historic high of 17395. The two leaders - Trans/R2K, settled higher by 1.4% and 1.5% respectively.


sp'60min

Summary

... and perhaps the most bizarre week in the equity market this year.. comes to a close.
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I could write a lot more.. but I am tired, and I'd like to at least save some energy to post the usual closing updates.

As always... sincerely.......... have a good weekend

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*I hold a tiny option put position across the weekend. The only consolation is my entry (sp'1981) has a chance at recovering in the next retrace.
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more later... on the VIX

3pm update - last hour of a disturbing month

US equities are flat lining, with the sp'500 set for a monthly close above the giant 2000 level, a clear 9% above the low of just 12 days ago. VIX remains broadly flat, which is suggestive of a floor, and a minor equity retrace next week.


sp'60min

Summary

*incoming news about Virgin space plane... the smaller rocket part... crashed.  :(
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I'm tired... and frankly mostly burnt out. I should probably quit my whining though, I know others are in infinitely worse situations.

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*I will hold a tiny short put block across the weekend, seeking to drop on ANY minor retrace next week.
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3.35pm... chop chop.... VIX melting lower... -1.7%... in danger of losing the 14s again... urgh.

back at the close

2pm update - end month stress

US equities continue to hold significant gains. The sp'500 is still to break a new historic high, but with the Dow and Transports both having done so, it bodes well for the bulls into early next year. Metals remain weak, Gold -$25, with Silver -2.3%


sp'60min

Summary

... I could write endlessly about how this is unexpected (I thought sp'1950/60 was a bold 'bounce' target)... but really... today is pretty damn stressful.

Its not even about today though... as I'm sitting on a relatively small loss.. in a tiny little option put block.

It is the thought of what is ahead into year end... but more so.. across 2015.


Just how high are we headed? sp'2100, 2500... 3k....... 4k?

Hey, that might sound crazy, but then... with the Japanese Govt' buying 'the world'... why wouldn't we just keep on rising at an ever faster rate?
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For those who are having an even worse day than me (no doubt.. Gold/miner bugs)... you do have my sympathies.

I can only suggest tea, chocolates...or maybe something stronger.
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back at 3pm.

ps. I do really appreciate all the messages across this week... it has made all the effort worthwhile.

1pm update - equities holding gains

US equities are holding on to most of the gains built across the morning. Only a daily close back under sp'2000 would offer any hope that a retrace (if moderate) is viable next week. Metals remain exceptionally weak, having lost the 2013 floor, Gold -$28.


sp'60min

Summary

Suffice to say... end month afternoon chop... probably.

Even if some late day selling... a monthly close in the sp'2000s will be a huge victory for the bulls.
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October.... what a month.

12pm update - VIX remains the anomaly

Whilst equities continue to hold very significant gains, the VIX remains the anomaly... currently a touch positive in the 14s. An equity retrace is of course going to happen at some point 'soon', but for the moment... the only hint of a turn coming is via the VIX.


VIX'60min

Summary

*note the opening reversal candle in the VIX... they are usually to be taken quite seriously.
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With the Japanese Govt. confirming they are going to ramp up equity exposure - as part of the national pension fund... we're set to close with net monthly gains of around 1-2% for most indexes.

The actual monthly candles are all screaming bullish, with huge floor spikes... suggestive of upside into early 2015.

It would seem the sp'2100s are the natural target, and both Carboni, Riley... and no doubt some others, will be laughing themselves into the weekend.

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re: metals.

With the floor taken out... Gold is effectively in free fall. An all out crash wave is now underway, and that of course has deeply bearish implications for the miners.
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VIX update from Mr T.(date is again wrong, but it is today's)


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time to cook


12.22pm.. VIX creeping higher.. +2.1%... with sp' cooling to 2011

In the scheme of things...still very slight changes though.

11am update - Halloween trick... and then a treat?

US equities are holding significant gains, although there are some signs of a reversal. The VIX has already turned positive (if briefly). Metals remain in collapse mode, with Gold having lost the 2013 low of $1179, currently -$35, with Silver -3.7%. Miners GDX -4.5%.


VIX'60min

GDX, daily

Summary

Suffice to say... a wild way to end the month.

A sig' equity retrace of some degree seems likely. Right now, best downside case would be 1970/50 zone.

Any hopes of sub sp'1900s.... now off the table.

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time to shop... back soon.
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11.20am.. Despite the continued gains... VIX holding just a touch lower.

Regardless of the exact close though, equities are set to close the month strongly.
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Notable weakness, Oil -1.3%

10am update - opening reversal

US equities open significantly higher, with a new historic high of Dow 17355. The sp'500 is yet to follow, although we do have the Nasdaq at new post 2009 highs. VIX is offering an opening reversal....


VIX'60min

Summary

*Chicago PMI, 66 , vs 60 expected. A very strong number, and confirming the recent Q3 GDP data.
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Classic hollow red candle on the VIX... with some black index candles...

It is suggestive of a reversal.... but I've low confidence in almost anything right now (aside from metals/miners).

A retrace of 'some degree' is of course going to happen, but I'm concerned we'll still manage another few days of gains.. before cooling lower.

Anyway... eyes to the VIX... lets see if it can climb across the morning.


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*I'm still looking for a retrace, but right now... at best... 50dma... in the low sp'1970s... in early November.

Considering the price action... and the bigger monthly cycles - now turning bullish, the notion of <1900... seems completely out of range for some months.

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Meanwhile.. there is utter carnage in the precious metals.

Gold -$32, with Silver -3.6%

This is naturally leading to a continued outright crash in the mining stocks. The ETF of GDX -4.5%


GLD, weekly

The 2013 floor is taken out.... next level is 95... equating to spot Gold $1000
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10.10am.. VIX turns positive.... confirming the opening reversal candle.

Now.. don't get me wrong... new high in the Dow... post 2009 high in the Nasdaq.. this sure as hell doesn't mean some major drop is now due...

but a retrace into mid 1900s seems viable..if not 'natural'.
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10.42am.. VIX remains a bit twitchy... but is still suggestive a key reversal is in.

Oil remains notably weak, -1.0%

Pre-Market Brief

Good morning. Futures are sharply higher, sp +23pts, we're set to open at 2017, just 2pts shy of a new historic high. The Dow is set to open up 175pts, which will be a new historic high in the upper 17300s. Precious metals.... continue to collapse, Gold -$24.


sp'daily5

Summary

Well, without question, its white flag waving time.

The 'old leader' - Transports, broke a new high on Tuesday, a new historic high for the Dow looks set at this mornings open.... with the sp'500 set to follow.

VIX will no doubt drop into the 13s.. if not the 12s.
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re: Metals.

Gold has taken out the June 2013 low of $1179. There is now empty air to the giant $1000 level.. which is possibly as early as next week.

Miners are naturally continuing to crash, in early trading, the ETF of GDX -3% in the mid $17s... headed for 15/14.

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Update from Carboni



No doubt Oscar is (justifiably) very pleased with himself, and his original target of the sp'2100s are again viable by year end.
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Well... with the down wave from 2019 t0 1820.. bears had a chance. A bounce into the mid 1900s was expected. We saw that... but it has just kept on going. This morning we're set to break new highs... and without question... its white flag waving time.

For the equity bulls, this is one hell of a Halloween treat.
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8.48am... Metals continue to weaken...  Gold -$32, with Silver -3.7%     Miners GDX' -3.9%

sp +20pts... 2014
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Notable weakness, Oil -1.4%... but then.. that is bullish US economy/consumer..right?


9.21am.. sp +25pts.. we're set to break a new historic high at the open of 2019/20.

Gold -$34.... miners GDX -5.0%.....
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9.39am.. Opening reversal candle on the VIX..... interesting... 

End month trick or treat?

With just one day left of the month, equity bulls have achieved an incredible ramp from sp'1820 to a new cycle high of 1999. On any basis, equity bears must achieve some significant Halloween weakness, back into the 1960s, otherwise it will bode for upside across November.


sp'monthly

Summary

It is pretty clear... if we don't close tomorrow, with the sp -25pts.. back under 1970...the monthly close will be a pretty damn bullish spike-floor candle.. suggestive of upside into year end.
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Looking ahead

Friday will be pretty busy.. with Fed official Williams speaking in South Africa, although it s very hard to say if any comments might be market related.

In terms of econ-data, pers' income/outlays, employment costs, Chicago PMI, consumer sent.
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*I am short from sp'1981, and will seek to exit into the weekend... although considering today's closing level, even the low 1970s look somewhat difficult to reach.
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Crazy market... what else is new?

Yesterday, I was seeking a micro double top of 1990/91. This morning, the market opens a little weak....and on a minor bounce...I short, the market quickly falls to 1974.. before a rally into the afternoon.

All things seemed 'tolerable', until that headline flashed over the Nikkei wires... yet it was a two week old story. How in the hell could the market seriously ramp on that? Having had some hours to reflect on this afternoon... I still can't make any sense of it.

This market is rarely boring. There is always something of interest going on. Friday will be no different. The key issue is whether bears can achieve a significant daily decline to offer some hope for next month.

I see a fair few people touting the sp'2100s, or at the very least, the 2025/50 zone before year end. I could counter and highlight the weakness in Oil, Copper, precious metals, miners... it could be a very long list. Suffice to say, new equity highs simply do not make sense right now, not least with QE having ended.

Goodnight from London

Daily Index Cycle update

US equities closed somewhat mixed, sp +12pts @ 1994 (intra high 1999), with the Dow +1.3% @ 17195. The two leaders - Trans/R2K, settled -0.9% and +0.8% respectively. Near term outlook is still offering a retrace to the sp'1930/25 zone.


sp'daily5

Dow

Trans

Summary

*this afternoon was offering a micro double top in the sp'500 of 1991, but that level was surpassed, arguably due to a story that flashed over the Nikkei news wires... a TWO week old story.
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The break to a new cycle high of sp'1999, with the Dow 17200s is a significant victory for the equity bulls. All that is left for the bulls to achieve now are new historic highs.. and we're only 1% away.

The 'old leader' - Transports, did close lower for the second consecutive day, but still.. equity bears can get confident at all.

There is currently no sign of a turn... and until the VIX is back in the 20s... it remains a very tricky market to play on the short side.
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Closing Brief from Riley



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a little more later...