VIX back on the rise

With equities back on the slide, the VIX held gains across the day, settling +9.1% @ 28.43. Near term outlook is for an equity retrace to the 1945/30 zone.. which should equate to VIX around 35. From there, renewed cooling to the 20 threshold by the FOMC of Sept'17th.


VIX'60min

VIX'daily3

Summary

Little to add.

VIX looks set for near term upside.. then cooling into mid Sept', before the next volatility explosion into end month/early Oct'.
--

more later... on the indexes

Closing Brief

US equities started the week and closed the month on a rather bearish note, sp' -16pts @ 1972. The two leaders - Trans/R2K, settled lower by -0.8% and -0.3% respectively. Near term outlook is for a retrace of the 126pt hyper ramp... to the sp'1945/30 zone before the Friday jobs data.


sp'60min

Summary

... and August trading comes to a close.

I will post a number of end month bits and pieces in my late day post at 11pm EST.
--

As for today... things were certainly leaning on the bearish side, and there is very high probability that sp'1993 was indeed the first peak of the bounce from the double floor of 1867.

Best guess remains... 1945/30 by Thursday... and then UP.
--

more later... on the VIX

3pm update - weakness into the monthly close

US equities look set for further weakness into the daily/monthly close. It has been a hell of a month for the equity bears, with the giant monthly cycles offering the first sign of an intermediate correction (of the Oct'2011 wave). Meanwhile, Oil is holding powerful gains of 7.4% in the $48s.


sp'monthly3

sp'60min

Summary

*note the bollinger bands on the hourly cycle which have now contracted. If you assume 1993 is indeed a short term top.. the bears should be able to manage 1945/30 zone within the next few days.. BEFORE the monthly jobs data.
-

With grey skies in London (for what seems like 15 of the last 18 days)... I'm not in the best of moods.

As August comes to a close... equity bears have seen the best action in four years. I continue to have hope that once we're past the next FOMC (Sept 17'th).. the market will resume lower.. with a FULL washout into early/mid October.

Best case remains the low 1700s..  but I realise that seems awfully difficult.. even after last week.

--
*I remain on the sidelines.. with eyes on AAPL. I want a long entry <110... for now..its the waiting game.

--
back at the close... unless things get a little exciting with a break under the morning low of sp'1965.

2pm update - weakness remains the threat

US equities see another touch of downside pressure, sp -12pts @ 1976, with VIX +5% in the 27s. Metals are seeing some chop, Gold -$1.. set for a net monthly gain of around 3%. Oil continues to build rather extreme gains, +7.0% in the $48s... the big $50 threshold would be natural resistance.


sp'60min

Summary

Suffice to say... nothing has changed since last Friday.

I'm still seeking a retrace of the 126pt ramp... back to the sp'1945/30 zone.
-

notable weakness, gold/silver miners, GDX -2.3%..despite the metals trading only a little lower.

1pm update - its getting tedious

Today is starting to get real tedious as the market churns largely sideways into the monthly close. Most indexes still look set for net daily declines, but regardless... bears are showing no sustained downside power... despite the VIX holding the upper 20s.


sp60min

Summary

With the lack of sustained downward power.. there is now the threat of another up wave.. although that'd still bode for downside later in the week.

As things are... I've ZERO interest in going long at these levels.

Considering the daily MACD cycles.. I've even less interest in attempting a market short.

So... I'm on the sidelines.
--

notable strength... AAPL

AAPL has fared better than the main market for the last few days...

*have removed fib' retrace... after its made new cycle highs.

12pm update - continued moderate chop

US equities remain moderately weak, in what is so far a choppy final day of the month. VIX remains notably strong in the upper 20s. The 30s look a given, with viable 'brief' upside to around 35. Oil has seen a very strong upside reversal, +3.5%.


sp'60min

VIX'60min

Summary

Little to add.

I've no idea - other than a short-stop run by the algos, for the move to almost green on most indexes.

Broadly, we should still fall across the next few days... ahead of the jobs data.
-

EU market monthly closes

A few of the strong net monthly declines..

As usual, I will cover the EU.. and other world market monthly cycles this coming weekend.
--

VIX update from Mr P.


--
time for tea... or something stronger

11am update - morning chop

US equities remain moderately weak, with an early low of sp'1965 and VIX 29.37. Regardless of further chop, there still looks to be increasing downward pressure across today.. and into Tuesday. Metals are somewhat weak, Gold -$5, with Silver -0.8%.


sp'15min

GLD, daily

Summary

*Gold is set for a net monthly gain of around $30 (3%).. and remains within a broad downward trend.
--

Little to add.

Relative to last Monday of course, today feels pretty dull... even with VIX in the mid/upper 20s.

-
notable rebound in AAPL, having already turned positive to $113.45.

I'd only consider an entry <110.. otherwise, I'll leave it alone.

10am update - increasing weakness into the monthly close

US equities open moderately weak, with the hourly cycle offering increasing downward pressure into the Monday/monthly close. Primary downside target is the sp'1945/30 zone.. which will equate to VIX back in the 30s. For the bull maniacs... it has been a rough month.


sp'60min

Summary

*Chicago PMI 54.4... non-recessionary, and nothing for the macro-bears to get excited about.
--

Suffice to say..  hourly MACD cycle is set for a bearish cross within the next hour or two.

--
I've eyes on AAPL

*yes, the fib retrace on the chart is unconventional, but I think its more fitting.. and ignores the opening Monday flash crash print.
-

60min

I'd like to go long in the 109/108s. That seems possible, despite AAPL holding up relatively well so far.
-

time to cook

Pre-Market Brief

Good morning. Equity futures are moderately lower, sp -13pts, we're set to open at 1975. A natural retrace of the hyper bounce (1867/1993: 126pts) remains the 1945/30 zone... which looks probable by Tue/Wed.


sp'15min

spmonthly3b

Summary

Regardless of any retrace in the first half of this week, a more important issue is that August is set to close seriously bad for the bull maniacs.

The sp'500 is set for a net monthly decline of 5-7%... with a red candle on the Elder chart. Unquestionably... we have a turn on the grand monthly cycle. A hit of the lower bollinger in the low 1800s looks a given in Sept/Oct.

Increasingly.. the low 1700s look viable by mid Oct. First things first though... lets close out the month.

early movers

AAPL -0.8% @ $112.30s
NFLX -2.6% @ $114s
-

Update from Mr C.



--
Overnight China action: yet again, the Shanghai comp' struggled across the day... and then a rather strong late day ramp, settling -0.8% @ 3205. It looks like the SSEC is headed for the 2500/2000 zone by end Oct... and that will no doubt infuriate the communists overlords.

The China SWAT teams are increasingly raiding anyone who dares suggest the market can go down. Does the UK have an extradition treaty with China?

yours... ready to repel borders.
-

8.00am ... sp -11pts, 1977.

meanwhile...

--
Indeed, I am bullish VIX for Sept/Oct. :)

Weekend update - US weekly indexes

It was the wildest trading week in years, with net weekly gains ranging from 2.6% (Nasdaq comp'), 0.9% (sp'500), to 0.4% (NYSE comp', Trans). Near term outlook offers a brief retrace to the sp'1945/30 zone, before resuming higher into mid Sept' to the 2050/70 zone. A break under the recent double floor of 1867 is highly anticipated.


Lets take our regular look at six of the main indexes

sp'500

The sp'500 opened Monday limit down... with an ES futures low of 1831... but with the actual index flooring at 9.35am @ 1867. After some truly wild swings, the sp'500 formed a secure double floor of 1867 at the Tuesday close, and then launched into a 126pt (6.3%) hyper ramp into Friday afternoon.

The closing weekly candle is suggestive of further upside into September. There are multiple aspects of resistance from the psy' level of 2000 to the 2050/70 zone. Sustained price action >2080 looks highly unlikely for some months.

Indeed, a particularly bearish scenario is that the move to 1867 was merely a sub'1, wave'A (or however you want to name it), a bounce is now underway, with an equally severe down wave in late Sept'/Oct' to at least test the Oct'2014 low of 1820.

For those who recognise the trend break of the giant wave from Oct'2011 (1074) to May 2015 (2134)... a realistic 38% fib' retrace would suggest the 1725/00 zone as viable.


Nasdaq comp'

The tech' hit a low of 4292, before settling higher by a rather significant 2.6% @ 4828. There will be VERY powerful resistance at the giant 5K threshold, which is around 4% higher... equating to sp'2040/50. Renewed downside to the 4100/3900 zone looks possible in Oct'.


Dow

The mighty Dow opened lower by over 1000pts at the Monday open, and saw some extreme swings across the week, settling +1.1% @ 16643. There is now powerful resistance (once key support) at 17k. Sustained action >17500 looks extremely unlikely. Broader downside to the 15000/14300 zone looks viable in Oct'.


NYSE comp'

The master index managed to scrape a net weekly gain of 0.4%, having opened Monday at 9509, well below the Oct'2014 low (9886). There will be core resistance around 10600, and renewed downside to 9200/9000 looks possible.


R2K

The second market leader settled +0.5% @ 1162, having hit 1102. There will be strong resistance around the 1200 threshold in Sept'. Renewed downside to test the Oct'2014 low of 1040 looks possible. Sustained price action under the giant psy' level of 1000 looks unlikely in even the most bearish scenario.


Trans

The 'old leader' broke a new multi-year low of 7452.. breaking the Oct' 2014 low (7700). Near term outlook is bullish into mid Sept'.. with key resistance in the 8000/300 zone. Renewed downside to the 7000 threshold looks highly probable in Oct'.


Summary

Without question, it was a week of extreme and repeatedly wild swings.

Equity bears gave the bull maniacs the biggest scare since the collapse wave of August 2011. Despite all indexes managing net weekly gains, the technical damage done to the weekly and monthly cycles is rather monumental.

Frankly, sp'1867 makes little sense as a key low for the year, and I expect it to be undercut in late Sept/Oct'. To me, the only issue is whether we'll see the low 1700s, before a late year rally into Christmas and early 2016.

--

Looking ahead

The coming week will largely center around the monthly jobs report, and what that might imply for the next FOMC (Sept'17th).

M - Chicago PMI
T - PMI/ISM manu, construction
W - ADP jobs, productivity/costs, Factory orders, Fed beige book (2pm)
T - weekly jobs, PMI/ISM service sector
F - monthly jobs

*it is notable that Monday is end month.. so price action will likely be somewhat dynamic with higher vol'.. not least as many will be anticipating the next FOMC.

--
Back at the Monday open :)

The wildest trading week in years

It was unquestionably the wildest trading week since at least August 2011. With the sp'500 collapsing to 1867 (with VIX 53s), a successful re-test at the Tuesday close, and then seeing a hyper ramp of 126pts (6.3%) to 1993. The coming weeks.. and perhaps months, will offer more powerful swings.


sp'weekly6

sp'weekly8

Summary

Suffice to add, it was an incredible week to be part of... and I expect more wild action in Sept/Oct... regardless of whether the Fed raise rates. In many ways.. they are arguably in a lose-lose scenario.

I remain open to a much deeper intermediate correction to the low 1700s.
--

Bonus chart to end the week

More than almost anything right now, the following chart should be a stark reminder to those believing we will just push straight up to new highs for the remainder of the year.

Dow, monthly'2

With one trading day left of the month the Dow is net lower by -1046pts (5.9%). I'm guessing Monday will be a net daily decline, so that closing month number sure ain't going to be pretty.

Goodnight from London
--
*the weekend update will be a full review of US weekly indexes

Daily Index Cycle update

US equities closed moderately mixed, sp +1pt @ 1988 (intra high 1993). The two leaders - Trans/R2K, settled higher by 0.5% and 0.8% respectively. Near term outlook is for a retrace to the 1945/30 zone, before renewed upside to 2050/70 zone, into the week of the next FOMC (Sept'17).


sp'daily5

Dow

Summary

Suffice to note... a truly wild week in the US equity market, with the sp' having seen a clear double floor of 1867.. then a hyper ramp to 1993. A retrace appears underway to the 1945/30 zone by next Wed'. From there, upside into mid Sept'.. to 2050/70.

Broader downside into Oct'... the low 1700s remain a viable prospect in the next down wave.
--

a little more later...

VIX cools into the weekend

With equities closing moderately mixed, the VIX was unable to hold afternoon gains of around 10% (intra high 29.20), settling -0.2% @ 26.05. Near term outlook is for the sp'1945/30 zone, and that should equate to VIX in the 30s.. before cooling back to the 20 threshold by mid Sept'.


VIXdaily3

VIX'weekly2

Summary

*a net weekly decline of -7.1%
--

As is often the case, the VIX was knocked lower into the weekly close..

5min

--
It was the wildest week in the VIX since the equity collapse wave of August 2011, with the highest VIX print since Jan' 2009 of 53.29.
--

more later.. on the indexes

Closing Brief

US equities closed moderately mixed, sp +1pt @ 1988 (intra high 1993). The two leaders - Trans/R2K, settled higher by 0.5% and 0.8% respectively. Near term outlook is for a retrace to the 1945/30 zone, before renewed upside to 2050/70 zone, into the week of the next FOMC (Sept'17).


sp'60min

Summary

*closing hour.. a fair bit of moderate chop... but managing a broadly flat close.
--

... and one of the wildest trading weeks EVER... comes to a close.

Congrats to all who survived it!

It does look like we'll fall to 1945/30 next week.. before pushing above the big 2000 threshold in early September.

Broader outlook... sp'2050/70.... then downside (at least) to the Oct'2014 low of 1820. The 1725/00 zone looks possible in Oct, which would make for a natural 38% fib' retrace of the gains from Oct'2011.

*thanks for all the messages/emails this week, it has meant I've not slept as much.. but I think that is what weekends are for.

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

3pm update - weakness into the weekend

US equities remain moderately lower, and with the hourly cycle set to see a bearish MACD cross at some point next Monday, there should be increasingly downward pressure into the weekly close, not least after a giant hyper ramp from 1867 to 1993. Equity bears need sub 1970s for a net weekly decline.


sp'60min

Summary

*note the lower bollinger on hourly chart.. currently at 1881.. and rising rapidly. That will probably be around the 1940/30s by next Tue/Wed.
--

All things considered, the market should see lower levels in the closing hour.

After all, how many bears are there left to cover? Instead, I'd imagine some of the rats will want to make a run for the exit door.

stay tuned


3.17pm.. chop chop.. sp'1983... 0.5% below the earlier high.

The sp' is set for a net weekly gain of around 0.5%.. which is a pretty bizarre thought, considering the Monday and Tuesday carnage.


3.30pm.. We've spent the better part of two days stuck around sp'1980.

As things are... outlook remains unchanged... increasing weakness.. with downside to 1945/30 in first half of next week.

... yours truly will have eyes on AAPL... 109s... the 108/107s would be a bonus entry.
-

3.35pm.. notable gains in the VIX, +10% @ 28.71... . kinda crept higher without me noticing.


3.37pm.. sp'1979..a few of the rats are starting to JUMP.


3.44pm.. A weekly VIX close in the 30s now looks due... with sp'1975/70.

Overall.... an incredible week.................. back at the close.

2pm update - short term top of 1993

With a break of the upward trend from the Tuesday close of sp'1867, we have a short term top of 1993. There looks to be increasing downward pressure into the weekly close. Equity bears need a close <1970 for a minor net weekly decline. Primary retrace target, the sp'1945/30 zone... by next Wednesday.


sp'15min

sp'60min

Summary

*note the spiky candle at sp'1993
--

At the current rate of decline, the hourly MACD (blue bar histogram) cycle will see a bearish cross at the Monday open.

I would be bemused if the market can somehow break higher from here. In theory, there should be at least some making a run for the exit door into the weekend.

--
meanwhile in London city, another day closer to the end of summer...

.. and I sure ain't happy about the looming winter.
-

stay tuned

1pm update - awaiting a trend break

US equities are a touch lower, sp -2pts @ 1985. If sp'1993 is a short term peak of the hyper bounce from 1867, a 'fair and realistic' retrace would be to the 1945/30 zone, no later than Wednesday. VIX is holding minor gains of 1.6% in the 26s. A move back into the 30s looks due in the first half of next week.


sp'15min

Summary

Little to add.

There is a clear upward trend, as of 1pm.. market just needs to break <1985 to break trend.

--
time for some sunshine...


1.30pm... provisional BREAK of the upward trend.

A move under the morning low of 1978 would confirm it.


1.37pm. NEW lows... solidifying 1993 as a short term top.

More the cautious bear money will start shorting now.

--
yours.. waiting for 1945/30 to go long   (yeah... I realise the irony.... but I am holding to my rules!)

12pm update - marginal new cycle high

US equities manage a new cycle high of sp'1993.. making a hyper bounce gain of 126pts (6.3%) since the Tuesday close of 1867. Hourly cycle continues to threaten of increasing downward pressure into the close.. and across Monday. A natural retrace would be to the 1945/30 zone.


sp'15min

sp'60min

Summary

Despite a marginal new cycle high... I'm still leaning for a down wave.

Policy 1, can't short.. whilst daily cycles pushing UP.

2. Will go 'moderately' long... next Mon/Tuesday.. if 1940/30s.

Holding to a broader bounce into FOMC week... 2050/70 zone... which would certainly merit being long.. if correct.
--

time for tea

11am update - remaining somewhat weak

US equity indexes remain moderately weak as the market is battling it out into the weekend. The longer the bulls are unable to break new bounce highs >sp'1989, the more probable it is that we have a short term high and are merely seeing some churn before a snap lower... before the close.


sp'15min

sp'60min

Summary

Little to add.

Hard to discern whether a short term top is in... market looks stuck right now... with the hourly cycle offering increasing downward pressure into the weekly close.
-

I've eyes on AAPL, -0.7% in the $112.10s.  I've no interest in picking up again unless 109s.

notable strength: INTC, +2.6% @ $28.45...
-

11.30am.. marginal new cycle highs.. .so... the retrace clock resets...124pts.. and rising

10am update - opening weakness

US equity indexes are a little weak, with the hourly cycles offering increasing weakness into the weekly close. A 'fair' retrace of the 122pt ramp from the Tuesday close remains the sp'1940s. USD is battling to hold minor gains +0.2% in the DXY 95.80s.


sp'60min

Summary

The quietest open of the week, and frankly... this sort of open would generally favour the bulls.

As it is, I will stay focused on the hourly cycle, which is suggestive we'll see increasing weakness into the weekly close.

I sure don't believe it merits taking a short position, but for those wanting a more reasonable entry level to go long... it looks better to just sit back and start afresh next Monday.

--
Something to reflect on...

AAPL, 60min

Like the broader indexes, from a pure cyclical perspective, the hourly MACD cycle is on the high side, and is in cooling mode. At the current rate, the MACD will see a bearish cross late today.. or Monday.

I remain seeking to re-long AAPL, but unless I see the 109s.. I ain't interested, not least ahead of the weekend.

So, I'll just sit back until Monday.
--

stay tuned
-

Ohh.. and if we break new highs today.. then I'll just start the 'retrace clock'.. at whatever level we get stuck at.. which clearly.. could be the big 2000 threshold.

Way risky for anyone to be shorting this madness.. and besides.. who isn't tired after this week?
-


10.13am.. it remains borderline situation

15min cycle

Viable downside to around 1960 in immediate term... which would offer 1940s late today or Monday.

.. considering the daily cycles though.. it looks overly risky on the short side.

Pre-Market Brief

Good morning. Equity futures are moderately lower, sp -10pts, we're set to open at 1977. There appears a distinct threat of another strong (if brief) move lower to the 1940s - whether today.. or Monday, before breaking above the sp'2000 threshold later next week.


sp'15min

sp'60min

Summary

So, we're set to open somewhat lower, and if things quickly unravel, there is indeed threat we'll end what has been a wild and crazy week, on a somewhat bearish note.

If the ABC theory (see 15min cycle) is correct, we'll see a washout somewhere in the 1945/35 zone complete by early afternoon, with some degree of recovery into the weekly close.

The fact the hourly MACD (blue bar histogram) cycle is ticking lower certainly adds some credence to the notion that we need to marginally break the Thursday afternoon low before the market can break above the big 2000 threshold.

early movers

AAPL -0.5% in the 112s
DIS -0.7% in the 101s
FCX +13% in the 11s... as the stock has garnered attention from Icahn.
NFLX -0.9% in the 116s
--


Doomer chat from Hunter


--

Overnight China action: Very similar to Thursday, with the Shanghai comp' struggling across the day, but then a powerful late day ramp,  settling +4.8% @ 3232.  Again, the speculation in the mainstream is that the Chinese leadership are adamantly propping up the market ahead of some WW2 event, Sept' 3rd I believe.

Have a good Friday

7.05am sp -16  1971... almost half way to target

8.00am. .sp -11... 1976

meanwhile.. concluding the week....

yours... no fan of the meddling monetary gods at PRINT HQ
-

9.36am.. So much for the weak open... almost net positive !

In any case, the hourly cycle is still ticking lower.. and threatens weakness as the day proceeds.. and possibly into Monday.

For those looking to go long - myself included... I don't see a reason to hurry.



9.42am.. Hmmm.... so... right now.. minor chop.... and it seems to be a case of 'sit it out' until next week.

AAPL -0.6% in the $112.20s....  I really ain't interested unless 109s

The wild swings continue

US equities built broad gains into the afternoon, but then saw another crazy roller coaster ride from sp'1989 to 1948, but then surging back upward to settle at 1987. Further swings of this strength look due in the days, weeks.. and probably months ahead.


sp'weekly

Dow' weekly

Summary

It is notable that the current weekly candle is a net gain for most indexes (The two leaders - Trans/R2K, are the exceptions).
--


Update from Oscar


--


Looking ahead

Friday will see pers' income/outlays, and consumer sentiment.

*It will be day'2 of the Jackson Hole meetup... no doubt, that will get some coverage on the clown finance TV.
--


A bearish Friday?

With a 4% round trip in the late afternoon, the notion that tomorrow we could be trading in the sp'1950/40s should not be seen as 'crazy talk'.

If you agree that the hourly cycle remains over-stretched - and it clearly IS, then so long as we don't trade in the 1990s tomorrow morning, there is high threat of a sig' wave lower tomorrow. Whether you want to call it an 'ABC retrace' of the 122pt ramp from the Tuesday low of sp'1867.. really doesn't matter.

What does matter is that we recognise the market is likely to remain volatile for some considerable time.
--

*I am on the sidelines overnight, and will look to pick up AAPL in the $109s tomorrow. If that price is now available, I'll sit it out until next week.

Goodnight from London