VIX cools into the weekend

Despite equities closing a little weak, the VIX still cooled into the close, settling -0.1% @ 12.12 (intra high 12.63). Across the week, the VIX saw a net weekly decline of -11.8% (intra high 16.27). Near term outlook is for renewed equity weakness, which should offer VIX 16/17s.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Little to add.

VIX is back in the sub teens. On any basis, the VIX can't go much lower. It is merely a matter of when the VIX is back in the mid/upper teens in August.

-
*I remain long-VIX from the low 14s, seeking an exit in the 15/17s.

--
more later... on the indexes

Closing Brief

US equities closed a little weak, sp -4pts @ 2104 (intra high 2114). The two leaders - Trans/R2K, settled -0.3% and +0.5% respectively. Near term outlook is for renewed equity weakness, and if the 200dma (2070s next week) can be closed under, there is empty air to the giant 2000 threshold, which would equate to VIX in the low 20s.


sp'60min

Summary

.. and another week at the twisted casino comes to a close.

Suffice to say... a week and month for the equity bulls... but there remain an increasing number of little econ/financial tremors out there.

Market remains paranoid about a rate rise, but if I'm right about equity weakness across the Aug-Oct' period.. the Fed will be too paralysed with terror for even a 25bps increase.

As for next week, well.. I have to imagine the bears have a pretty good chance at testing the sp'2070s again. The bigger weekly VIX chart continues to warn of much higher volatility across the next two months.

-
*I hold long-VIX, and short-INTC, across the weekend.

Thanks for all the messages/email across the week... always good to hear from you.

Have a good weekend
--
*the usual bits and pieces across the evening to wrap up the day, week... and month.

3pm update - weakness into the monthly close

US equities are seeing a little weakness, as the hourly equity MACD cycle finally sees a bearish cross. Regardless of the exact close, all indexes are set for net weekly gains, and most indexes (Trans being the exception) are set for net monthly gains.


sp'60min

Summary

Well, its been a pretty dynamic month. Unquestionably, a week.. and month for the equity bulls.

Despite the gains, underlying momentum..and price structure on most of the US indexes continues to swing toward the bears.

--
special note...

VIX weekly'2

I would prefer to see the MACD cycle turn back to positive by the close. Its not absolutely essential to my broader bearish outlook for Sept/Oct, but it'd be useful to see.
-

3.30pm.. the rats are getting a little twitchy into the monthly close...

A close <sp'2100 would be a bonus.. and is now within range... with VIX 12.60s.
-

3.42pm.. A rough day for the energy sector.   3x bearish.. ERY +6.5%

CHK -2.8%.. .as Nat' gas -2.2%...

Look at those rats jump.. they are wanting to close out for the weekend.  I can't blame them..having seen another dumb bounce from 2063 to 2114.

2pm update - rolling over... finally

After some minor swings this morning, a few hours of chop, the hourly equity MACD cycles are finally in the process of seeing a bearish cross. Underlying price pressure should be increasingly weak into the monthly close, but with the first opportunity of significant downside not until next Monday.


sp'60min

VIX'60min

Summary

So... with two trading hours left of July... we're getting the first proper bearish signal.. with a short term peak of sp'2114, with a VIX floor of 11.82.

notable weakness: oil/gas drillers, RIG/SDRL, both lower by around -5%.. as Oil -2.6% in the $47s.

1pm update - still waiting

US equities are seeing increasingly tight price action around sp'2111. USD has recovered half of the earlier declines, -0.6% in the DXY 96.90s. Metals are holding moderate gains, Gold +$7. Oil remains notably weak, -1.7% in the $47s.


sp'60min

VIX'60min

Summary

*VIX update from Mr T. posted late.. see previous post.
--

A somewhat tiresome end to the week... and month.

Equity price structure is a viable bearish wedge on the hourly cycle, but I realise some would argue against that.

Regardless of where we close today... a bullish week, but with a lower high.. and a lower low - at least for all indexes.. except the Transports.

-
notable weakness: oil/gas drillers, RIG -3.3%, SDRL -4.0%


1.32pm.. Bearish MACD cross on the hourly cycle... imminent.

12pm update - awaiting a break lower

US equities remain very choppy, and that could easily remain the case into the Friday/monthly close. The hourly cycle setup still favours the equity bears.. with a down cycle due. VIX looks floored in the 11s... the bigger weekly cycle will be offering the 16/17s next week.


vix'60min2

Summary

A pretty messy day to end the month.

Re: precious metals. Gold has certainly seen some swings today.. from -7 to +12... but now cooling.. just +$7. For July, Gold is set to close net lower by around $70 or so.. and still on track for the psy' level of $1000.
-

*Considering the current equity price action, I'll hold long-VIX, and short-INTC across the weekend.

---
notable weakness, AAPL.

A break under the recent $119 low would be pretty important.. and bodes for broader market weakness. INTC is similarly looking weak... but more on that later.
-

VIX update from Mr T.



--
time for a cool drink.

11am update - moderate gains

US equity indexes are moderately higher, with particular strength in the second market leader - R2K, +0.9%, higher for the fourth consecutive day. Metals are cooling from the earlier 'USD smack down' inspired highs, Gold +$5, with Silver +0.7%. Oil remains notably weak, -1.4% in the $47s.


R2K, daily

sp'60min

Summary

Little to add.

The opening reversal has itself reversed.. and here we are with gains across all the main indexes.. if minor.

A pretty choppy morning.. with notably weakness in energy/resource stocks.

I am still seeking weakness... but for now... we're still awaiting the hourly equity cycles to get a bearish MACD cross. 
--

time for an early lunch

10am update - opening reversal

US equities opened a little higher to a new cycle/bounce high of sp'2113, but then see a rather clear reversal back lower - as also reflected in the VIX. USD remains beaten down though after weak employment cost data. Commodities are mixed, Gold +$9 (from -7), with Oil -0.7%


sp'60min

VIX'60min'2

Summary

*CHICAGO PMI 54.7... a clearly non-recessionary number, and much better than the market expectation of 50.0.
--

The final day of the month is proving to be pretty wild already... we have a long day ahead!

It remains the case that from a pure cyclical perspective, we're due increasing weakness into the weekend... and probably.. next Monday.
-
notable weakness: BABA -1.2%

TWTR -1.8%... with the psy' level of $30 within range... and it won't likely hold.

LNKD, -9.6%... utterly hillarious reversal from the AH gain of 12%.
-

Hourly equity/VIX cycles are set for bearish/bullish crosses respectively.. by lunch time.... so.. we should in theory see increasing weakness across the day.

All thats missing is a 'spooky' Greek news headline.
-

10.01am.. consumer sentiment 93.1.... broadly inline...


10.06am.. Eyes on AAPL.. if it loses the $119 low... that is a major signal

. watching
-

notable weakness, XOM and CVX, both -4.5%... on lousy earnings


10.32am.. chop chop.... eyes on AAPL... already hitting $120s.

Pre-Market Brief

Good morning. Futures are a little lower, sp -2pts, we're set to open at 2106. USD is cooling, -0.2% in the DXY 97.30s. Metals are ending the month on a negative note, Gold -$7, with Silver -1.1%. Oil is similarly weak, -1.7% in the $47s.


sp'daily5

VIX'weekly'2

Summary

Well, its the end of another month.. and for the chart maniacs out there.. how we close the month is always an important issue.

For me... I want to see the VIX climb into the weekend, and see the weekly MACD (blue bar histogram) turn back positive. A neg' monthly close certainly doesn't negate hope of equity downside into Sept/Oct, but I'd sure feel better about things if we do close back above the zero threshold.
-

*awaiting Chicago PMI, market is expecting 50.0. Anything in the 49s.. or certainly 48s will again be a warning that things ain't so great out there.
-

early movers...

oil/gas drillers, SDRL -2.4%.. as Oil resumes lower

EXPE +8.3%... post earnings

LNKD -5.8% @ $214.. which is a rather severe reversal from the initial earnings reaction of +12%.
--

Overnight China action... China ended the month on a negative note, settling -1.1% @ 3663. The monthly decline (will post more on it later)... confirmed the big turn in June. Further weakness to the 3200/3000 zone looks a given. Considering its only July.... with a 'window of weakness' into Sept/Oct... I'd not be surprised to see 2500 before the retail-gambling madness resumes higher into next year.
-

Have a good Friday.
-

8.02am... XOM earnings... clear miss... EPS @ $1.... a year ago.. it was earning over $3 per quarter!

initial stock reaction.. a little lower, -0.9% @ $82.00

 --
meanwhile... others are getting credit for my messages...

Bearish media hack interns.
-

8.25am... Energy stocks having real problems... XOM -1.8%... CVX -1.1%.. the latter has earnings at 9am
-
Indexes cooling, sp -4pts... 2104.

Equity bears need to see a break <2090 today.. with VIX 14s.... that will offer clarity for next week.


8.31am.. and futures jump from -4 to +1pt..... on 'employment cost' data, +0.2%... lower than expected... hence market looking for less chance of rate hike in Sept'


8.34am. CVX..  EPS 30 cents.. vs $1.16 estimate..   another huge miss.....   CVX -1.6%...

--
With the employ' cost data... USD has snapped lower, -0.7%... which is helping Gold/Oil recover.

The bigger data point remains PMI... due at 9.45am.
-

USD smack down... -0.9% in the DXY 96.60s.... but still net higher on the month.
-


8.43am.. Well... its an old fashioned 'dollar lower... everything else UP' situation... USD -1.0%.. with sp now +3pts... 2111.

Gold reversing from -7 to +2.     Even Oil is back to -1.1%
-

9.00am.. With 'bad news is good news'... sp +5pts... 2113...  a mere 1.1% from a new historic high.

Barring an opening reversal.. this is starting to look ugly for the equity bears... as USD rapidly cools.
-

9.33am.. shaky opening gains..... eyes sharp for reversal candles......

9.35am.. black-fail candles appearing all over the place..

notable weakness: INTC -0.3%.... not looking pretty.


9.45am.. CHICAGO PMI 54.7.... a clear beat.... and out of recessionary territory.

Now the market will be concerned about rate rises again, lol

The Mighty Dow is weak

The Dow is weak, and this is increasingly apparent on the giant monthly cycle. Despite a marginal new historic high of 18351 in May, the Dow has effectively been flat lining since February. A Friday/July close under the monthly 10MA - currently @ 17733 would offer another indication of 'trouble into the early autumn'.


Dow, monthly'2

Dow, weekly'1b

Summary

A fifth consecutive blue candle on the giant monthly 'rainbow' chart... with price action looking like a flat top.

I will be looking for a monthly close <17733 at the Friday close.

As for the weekly chart, despite the current net weekly gain, we did see a break of trend on Monday, and for now... the closing weekly candle will result in a lower high.. and a lower low.


--
Looking ahead

Friday will see Employment cost, Chicago PMI, and consumer sentiment.

*since it will be a weekly and monthly close, expect increasing vol' in the afternoon. As is generally the case, higher vol'.. will very likely equate to lower prices.
-


Somewhat less cautious

Today, after some further consideration, I picked up a secondary short-term trading block. I went short INTC.. which is a stock I've been bearish about since it maxed out at $35 in early June. I am increasingly seeing individual stocks with increasingly bearish price structure. As ever, I will try to trade in/out of positions as best I can, but wish to be broadly short the US market into early October.

Goodnight from London

Daily Index Cycle update

US equities closed moderately mixed, sp +0.1pts @ 2108. The two leaders - Trans/R2K, settled u/c and +0.2% respectively. Near term outlook is offering renewed side, but the equity bears really need some sustained price action under sp'2090 to offer clarity that the Wed' high of 2110 was just another marginally lower high.


sp'daily5

Dow

Summary

Suffice to say.. broadly, it was a day of moderate chop for the US indexes.

Based on the bigger weekly/monthly cycles, the US market looks increasingly vulnerable into the early autumn.
--

Closing update from Riley


--
a little more later...

VIX building a floor

Having been briefly knocked to 11.85 at the FOMC announcement, the VIX spent Thursday in floor building mode, settling -2.2% @ 12.22 (intra low 12.09). Near term outlook offers renewed equity downside, which should equate to a VIX weekly close in the 13/14s.


VIX'60min

VIX'daily3

Summary

Suffice to add, market is back in complacency mode.. but broadly... I remain expecting much higher volatility levels as we proceed into August.. and all the way into early October.

*I hold long-VIX from the low 14s.. seeking my next exit in the 16/17s.
--

more later... on the indexes

Closing Brief

US equities closed moderately mixed, sp +0.1pts @ 2108. The two leaders - Trans/R2K, settled u/c and +0.2% respectively. Near term outlook is offering renewed side, but the equity bears really need some sustained price action under sp'2090 to offer clarity that the Wed' high of 2110 was just another marginally lower high.


sp'60min

Summary

Not the most exciting of days... indeed, with the morning spike from 2094, it was a pretty frustrating day for those in bear land.

Yet.. from a pure cyclical perspective, the setup does favour the bears into the weekly/monthly close.

I would be surprised if we don't see a monthly close <sp'2100.. along with VIX 14s.

--
*I hold long-VIX, and short-INTC overnight.
-

more later... on the VIX

3pm update - continued chop

US indexes look set to close moderately mixed, with the sp' having bounced from a Monday low of 2063 to 2110. Equity bears need a daily close in the 2080s - along with VIX 14s to offer clarity that this recent move was just another bounce.


sp'daily5

VIX'60min2

Summary

A daily close <sp'2100 looks difficult, but regardless of the exact close... market looks tired.. and set for some weakness into the weekend/monthly close.

notable weakness, miners, FCX -4.8%,    GDX -3.6.. as Gold -$9... falling into month end.. as is typical.

-
*I will hold long-VIX, and short-INTC overnight..
-

A reasonable day in the city...

Not exactly warm though.. just 60f.
--

updates into the close..

2pm update - market looks tired

With the FOMC and GDP data out of the way, the market should (in theory) be able to more easily pick a direction.. and run with it into August. The hourly cycle setup continues to offer renewed equity weakness.. into the Friday/monthly close.


sp'60min

VIX'60min'2

Summary

Well... this market sure looks tired.... yes?

Equity bears could do with a daily close <sp'2100.. along with VIX in the 13s. Considering we had both of those targets this morning... it is not an overly bold hope.

--
*I remain long-VIX, and short-INTC (from an hour ago.. $28.90s).

As things... I am more than content to hold both of those trades into next week, but if there is some sig' downside tomorrow.. I'll likely drop both into the weekend.. as I try to do for any option positions.
--

back at 3pm

1pm update - equities look vulnerable

US equities are trading broadly flat, having filled the opening gap to sp'2107. VIX looks set for another attempt to break.. but more importantly.. hold the 13s. USD is building strong gains, +0.8% in the DXY 97.80s. Metals are under natural pressure, Gold -$8, with Silver -0.4%


sp'60min

VIX'60min'2

Summary

So... the question I'd ask anyone is... '...would you expect VIX to be sustainably trading under the FOMC spike low of 11.85?'.

Personally, with the VIX at these levels... it seems just a matter of a few days before the VIX is back in the mid teens. Once the Monday high of 16.27 is held above... then the low 20s will be viable... and quickly.

--
*after some consideration, I am SHORT-INTC, from the $28.90s.

INTC, weekly

I have an initial target (as I have had for over a month) of the 26/25s by early Oct. However, the H/S scenario is suggestive of $22.50.

So... Mr Cautious is getting somewhat less so....

12pm update - battling it out

US equities remain moderately weak, as the market is battling it out around the sp'2100 threshold.. where the 50dma is also lurking. With the USD +0.6% in the DXY 97.60s, commodities remain under some pressure, Gold -$5, although Oil is now +0.2%.


sp'60min

VIX'60min

Summary

*I see that the infamous Gartman is no longer bearish. Well... there is your sell signal.
--

For the equity bears its somewhat frustrating... as for now, there is no significant downside power.

Now its a case of whether we'll see some stronger downside action into the weekend/monthly close. 

The setup still favours the equity bears.

--
VIX update from Mr T.


--
time for lunch

11am update - weak chop

US equities are seeing some weak chop, with an early low of sp'2094. It remains the case that with the VIX already low, how are equities going to be able to push higher into August? Cyclically, the setup favours the equity bears into the Friday/monthly close.


sp'daily5

VIX'daily3

Summary

*note how sp'2090 is kinda an interesting level on the sp'500 chart. If we see any price action in the 2080s.. it'd be suggestive of 2050s.. if not a lot lower in August.
--

Despite the recovery/bounce, we do have a break of trend.. in both equities and VIX.

Daily MACD cycle on the VIX is offering a warning that despite a two day equity bounce... we're so low on the cycle.. there really is only one way for the VIX to go from here...  UP.

*I remain long-VIX, and have little interest in exiting until at least the 16s.
--

notable weakness:  FB -4% in the $93s.
-

Someone just reminded me of this...

INTC, daily

Today's candle sure ain't pretty... another fail on trend... at the old floor of $29. Target remains 26/25.... H/S would suggest $22.50

--
time to shop... back soon

10am update - opening weakness

US equities open moderately lower, as Q2 GDP (2.3%) marginally disappoints the mainstream. With the USD +0.6% in the DXY 97.50s, commodities are under pressure. Gold -$12, with Silver -0.7%, whilst Oil is -0.5% in the $48s.


sp'60min

VIX'60min2

Summary

*I do like my 'rainbow' Elder impulse charts.... we have a nice green candle on the VIX hourly to start the day :)
--

Well, we're in the tail end of the month... and as I noted last night.... the monthly closes will be rather important.

As it is... the sp'500 should comfortably hold above the 10MA (2066)... but other indexes are already busted.
--

notable weakness: AAPL -1.0% in the $121s.. a loss of 120 would be a major warning of trouble for the broader market into August.

FB -4% in the $93s.. as the Cramer can't believe how cheap it is, lol

-
stay tuned!

Pre-Market Brief

Good morning. Futures are a touch lower (ahead of GDP data), sp -2pts, we're set to open at 2106. USD is building early gains, +0.4% in the DXY 97.30s. Metals are weak, Gold -$10, with Silver -1.0%. Oil continues to climb, +0.4% in the $49s.


sp'60min

VIX'60min'2

Summary

With the FOMC out of the way until mid Sept', the way forward is a little simpler from here.

Now it is simply a case of whether we see new highs in 'some indexes'... before breaking lower... or see another failure in the near term.. and then take out the recent key low of sp'2044.

It remains notable that a number of indexes recently broke the equivalent level of sp'2044. Then there are the trend breaks on the bigger weekly/monthly cycles, but few seem to have noticed that rather important development.

*I remain long-VIX... and frankly, considering we're now already in the 12s.. how much lower could it go anyway?

Hourly equity/VIX cycles continue to threaten an equity down wave into the Friday/monthly close... the setup does NOT favour the equity bulls across the next two days.
--

Early movers...

FB -1.4% in the $95s.. post earnings depression

WFM -14%, after a marginal earnings miss, back to the low from last Oct',  $35s.

GDX, -2.4%, as the precious metals continue to weaken, Gold is headed for the giant $1000 threshold.

--
Update from Oscar



-
Overnight China action: The volatility continues. with the Shanghai comp' seeing a lot of chop.. but then a sharp sell down in the late afternoon, settling -2.2% @ 3705. The recent low of 3373 really isn't more than 1-2 trading days of declines away.
-

Have a good Thursday

*standing by for Q2 GDP data - due 8.30am EST.
-

8.31am GDP 2.3% , vs prev' +0.6% (revised from 0.2%)

Broadly.. a 'bearable' number for the market... not great... but not dire either. Further, the revision for Q1 negates the recessionary threat.

Equities weakening... .sp -6pts @ 2102
-

Metals under increasing pressure as USD claws upward, Gold -$14.
-

Equity bears should remain seeking a daily close back under sp'2100....  along with VIX 14s.. for the weekly/monthly close.


9.13am.. sp -8pts.. set to open at the 2100 threshold.... that will probably equate to VIX 13s.

A daily close <2090 would be useful... with VIX 14s.. but I realise most would argue that is out of range.
-

9.38am.. VIX making an initial break above hourly 10MA.... hmm    with sp'2101


9.44am.. Clear breaks all over the place.. VIX 13.18...   with sp'2097. 

Mining stocks imploding. GDX -3.7%.... 100% horror.

How will the month close?

It was a second day of gains for the US equity market, sp +15pts @ 2108. A more important issue though is how will the month close? Will there will be further upside.. with a sig' net weekly gain - making for another monthly close above the key 10MA (2067)... or will the market unravel into the weekend?


sp'monthly1b

Dow, weekly1b

Summary

A monthly close under the 10MA on the sp'500 looks very difficult.. unless the market gets badly spooked by GDP data tomorrow.

re: Dow... despite the current net weekly gain of 1.0%, we did have a break of trend on Monday, and until the Dow is breaking new historic highs in the 18400s.. the bull maniacs can't get overly confident of the autumn.. and winter to come.
--


Looking ahead

Thursday will see Q2 GDP data, market is expecting growth of 2.9%, which to me seems overly optimistic.

Other data, weekly jobs.
--


Eyes still on the VIX

I remain (perhaps overly) focused on the VIX, but for me... that is where I believe the 'big money' might be made across the next few months.

VIX' weekly'2

With further weakness today, the MACD (blue bar histogram) cycle saw a bearish cross on the weekly cycle.  I want to see the VIX pick back up by the Friday/monthly close into the 14s. That would negate the cross... and keep the original scenario intact.

Goodnight from London

Daily Index Cycle update

US equities closed broadly higher, sp +15pts @ 2108. The two leaders - Trans/R2K, settled higher by 1.7% and 0.5% respectively. Near term outlook is mixed, with the hourly cycles offering a down wave across Thurs/Friday, but the daily close >sp'2100 (where the 50dma is lurking) is a rather bullish signal for early August.


sp'daily5

Trans

Summary

*the market laggard - Trans, has seen a rather decisive break above declining resistance/trend. Right now, it the most bullish break of trend that I'm aware of.
--

The sp'500 close above the 2100 threshold.. and the 50dma was particularly bullish, and offers broader upside into August.
-

a little more later...

VIX crushed for a second day

With equities climbing for the second consecutive day, the VIX continued to get crushed lower, settling -7.0% @ 12.50 (intra low 11.85). Near term outlook is mixed, with the hourly cycle offering a VIX rally across Thurs/Friday, but with sp'2100s closed above... the broader equity trend looks bullish into August.


VIX'60min

VIX'daily3

Summary

Suffice to say, I'm surprised.. and bemused to see the VIX back in the 12s... even flashing lower to the 11s on the FOMC announcement.

All things considered, VIX is now on the very low side.. as some might say... the only way from here is up...yes?

-
*I remain long VIX from the low 14s.. which now looks a fair way higher! I am confident though I'll claw my way out of that position though.. net higher.

I remain seeking to be broadly long-VIX into Sept/Oct.

--
more later.. on the indexes