Friday 30 January 2015

Volatility climbs into end month

With US equities unravelling into the weekend, the VIX built rather significant gains, settling +11.8% @ 20.97 (intra high 22.18). Near term outlook is offering a possible VIX explosion into the 30s... if a daily close <sp'1970. Across the week, the VIX gained a very significant 25.9%





*I very rarely highlight the giant monthly chart on the VIX. Usually, there is little point... but with the VIX itself becoming more volatile.. I think it is becoming increasingly important.

The MACD (green bar histogram) cycle will turn positive at the Monday (Feb'2) open. The last time that happened was Sept'2011... when the market was being smashed around in the sp'1100s.. with VIX in the upper 40s.

The net weekly VIX gain of 25.9% is certainly significant, but equity bears should be seeking a break into the 30s.. if sp' fails to hold the 200dma (1973 or so) next week.

more later... on the indexes

Closing Brief

US equities saw further swings, but with very significant weakness into month end, sp -26pts @ 1994 (intra low 1993). The two leaders - Trans/R2K, settled lower by -2.3% and -2.1% respectively. Near term outlook looks increasingly bearish.. the door is opening to sp'1920/00 by mid February.



*I bailed on a legacy R2K (long) position into the close. Price action looks stinky, and there seems little point holding across the weekend.

This afternoon was a major failure for the equity bulls, having broken declining trend, but with a clear spike fail on the hourly chart.

Looking at the VIX monthly cycle... I have to say.. it looks like the market might be looking for a full washout to the low sp'1900s before the next multi-week up wave.

Have a good weekend

*the usual bits and pieces across the evening.. to wrap up yet another week...

3pm update - Oil jumps into the weekend

US equities have seen a notable break above declining resistance, but are now slipping again. Meanwhile, far more dynamic, Oil, which just earlier was higher by a rather extreme 8%. Metals are similarly building gains, Gold +$23.


USD, daily'2, rainbow


*first green candle since late November, and infinitely more powerful. Without question... today's upside in Oil is one of the strongest gains in a long while.. although January is still set for net monthly decline of around 10%

As for equities.. it remains a real mess.

We do have a clear break above declining trend... but now its looking somewhat ugly again.

A Friday close <2k would be something of a train wreck for the bull maniacs....

3.11pm... sp'2005.... its getting real edgy... with VIX 20.63.. close to high of the day.

3.22pm.. sp'1999... NEW daily low... and it turns the sp'500 cycle BEARISH.

If we close <2k.. it'll be the first bearish monthly close since Jan'2012.

3.25pm... Even AAPL has turned red (new historic high of $120.00 earlier)...

*to be clear... sp'2002 is the threshold for a monthly bearish MACD cross.. which to the technical maniacs out there... is the one to watch.. into the close.

3.31pm.. back to 2005... it remains pretty wild out there.. with VIX 21s

sp'500 Net monthly decline... -2.6%  biggest since Jan'2014

Notable weakness, airlines, DAL/UAL, both lower by -5%... on the oil jump

3.35pm.. looking at the VIX monthly chart... it will break positive MACD cycle at the Monday open... is suggestive of a full wave lower to sp'1920/00 zone within 1-2 weeks. Make of that.. what you will.

3.43pm.. its getting fast and dirty.. sp'1998.... vix 21s + 15%

3.49pm.. Gold +$25.... almost fully reversing the Thurs' drop... huge monthly gain.... more on that.. later.

Still marginal as to whether we see a monthly bearish close in the sp'500.... need <2002.

3.53pm... ugly close...

*I'm bailing on a legacy R2K position, I'm out....  since the door is now wide open to sp'1920/00.... no point holding across the weekend in my view.

3.55pm... So.. now its a case of sp'1988 double low to be taken out...

Yes..there is support at the 200dma... but price action looks increasingly lousy... and we're set for a monthly BEARISH close.

Bulls failed................ back at the close.

2pm update - almost a breakout

With a spike floor of sp'2000, the market is making another play to break the declining resistance (which will be around 2012/13 this hour). A clear break >2015 would trigger a fair few short-stops... with a marginal net daily gain... not that it will be enough to negate a January net decline.




*Tis a long day... and I'm getting tired.... I'm trying to hold off on the chocolates until late night (.. a Gold Rush night)

Suffice to say... lets see if we get a break...

VIX daily candle... now a black-fail... bodes in favour of the bull maniacs.

stay tuned!

1.58pm... sp'2015... short-stops are clearly getting hit... market pushing here...... to turn green.

R2K is notably weak though, -1.2%... urghh

2.10pm... sp'2016... market starting to break up and away... first upside target is 2035... viable at the Monday open.

2.26pm.. clear break of trend in equities.

What is surprising.. Gold is not cooling, in fact... gaining, +$23, almost negating the Thursday decline (27$)

2.29pm... sp'2021... a full 1% above the low.... 2030s for the close?  VIX set to turn red 

Woah.................... just noticed...... Oil +8%

What the hell ? Did peak oil just get declared... again?

2.43pm... twitchy Oil cools 1% or so... sp' back to red.. but still.. we have broken resistance... 

12pm update - still weak

US equities continue to struggle, unable to break declining resistance (currently sp'2020). VIX is confirming some mild concern, +10% @ 20.66. Metals are still building gains, Gold +$18. Oil is holding gains of 1.5%. A monthly close under sp'2k would be a fairly important victory for the equity bears.




For me, how we close the month will be particularly important.

Monthly MACD (blue bar histogram) is on the threshold of settling the month with a bearish cross.. something not seen since Jan'2012.... THREE full years ago.

A close <1999/98 would probably do it... with MARCON 6... and starting Feb' at 6. could say... I am 'moderately concerned'.

Notable strength: AMZN +13%.. as the momo shorts get nuked

VIX update from Mr T.

time for lunch... back at 2pm

11am update - it remains messy

US equities see renewed weakness, with an apparent morning low of sp'2002, with VIX 20.49. With a little market concern, the metals have built gains, Gold +$12. Oil is holding sig' gains of 2.0%, but will still settle January with a net monthly decline of an extreme -15%



So far then.. bulls have been unable to break declining resistance.

At the close of today, resistance will be around 2012. Any net daily gain would bode bullish for next week, but still... this remains a bit of a mess.

Notable gains: AMZN +11%

A mere PE of somewhere around 150... clearly... 'cheap', urghh

10am update - spike floor

Equities opened moderately lower, but price momentum is building to the upside.. with a rather clear hyper-spike floor hourly candle. A break >sp'2025 will open up 2045/50 zone... which would be on crazy way to end the month. Metals look vulnerable, Gold +$3




*opening black-fail candle on the VIX.... bodes in favour of the equity bulls

So.... the opening declines are much less than expected... and now its a case of whether the bulls can break declining trend... and battle into the 2030/40s by the close.

Considering the market mood.... a move to sp'1970s now looks... unlikely.

re: econ-data

GDP was clearly a miss at 2.6%.. but the Chicago PMI of 59.4 is pretty damn good, and well above the recessionary threshold of 50.0.

Notable gains, V +5.9%.... accounting for roughly 100pts on the Dow (yeah... such a balanced index).

10am.. Consumer sent' 98.1.... powerfully bullish... no doubt, largely due to lower gasoline prices.

Equities want to turn net positive today.... eyes on a break >sp'2025.

Pre-Market Brief

Good morning. Futures are somewhat lower (ahead of GDP data), sp -13pts, we're set to open at 2008. Metals are seeing a minor bounce, Gold +$5. Energy is mixed, Nat' gas -2.4%, whilst Oil is +0.8%.



*awaiting key GDP data

The last trading day of the year.... whether we close above sp'2000 is very important... it will determine whether we get a closing monthly MACD bearish cross.. something not seen in a full THREE years.

more on that later though...
Notable gains, AMZN +11% on earnings. At $2 EPS a year... the PE is only 150 or so now.  What a bargain!

Visa (V), +4%, earnings... with a 4 for 1 stock split. Everyone loves a stock split, right?

8.31am Q4 GDP: 2.6% growth, but that is a fair bit below expectations.

Equities a little weaker, sp -14pts @ 2007 (briefly -20pts)

8.52am.. Market remains weak, sp -17pts,  2004.

next up... PMI at 9.45am

9.42am.. sp -6pts... and far better than most expected.... won't take much to turn market positive.

9.45am.. PMI 59.4... pretty damn good... and negates worries about GDP...

Hyper-spike floor hourly candle on the indexes... bears beware!

Two months in a row

With just one trading day left of the month, US equities are set for the second consecutive net monthly decline. Even if the sp'500 can rally 1% on Friday (which won't be easy), it would still result in a red January.


Dow, monthly'2


*Its been a tiresome day... I'll keep this short.

Suffice to say, a second month of declines, but overall.. it is NOT significant, and the primary upward trend remains intact.

Looking ahead

Friday is rather important.

US GDP Q4, market is expecting 3.2% growth. Clearly, any number in the mid/low 2s would be a real disappointment. Personally, I'm expecting something in the 3s,, but as ever... this will only be a first reading... and subject to some possibly major revisions.

Also due, Chicago PMI, employment cost, consumer sent'

Goodnight from London

Daily Index Cycle update

US equities closed moderately higher, sp +19pts @ 2021 (intra low 1989). The two leaders - Trans/R2K, settled higher by 0.6% and 1.3% respectively. Near term outlook is uncertain, with threat of a hit of the 200dma of sp'1973... before renewed upside.





*Trans - 'old leader', is particularly interesting, since it is bouncing off rising trend.

The sp' and most indexes though, look a bit of a mess. Market has been broadly stuck since early December. Until we're back above sp'2064.... market is vulnerable to more considerable downside.

a little more later...