Volatility continues to cool

With US equities climbing for the second consecutive day, the VIX continued to cool, settling -10.8% @ 17.33. Near term outlook is highly uncertain whilst the broader market remains within a relatively tight trading range. If sp' can battle >2064, then VIX will slip to the low teens.


VIX'60min

VIX'daily3

Summary

Little to add.

The key 20 threshold will be re-taken on any move back under sp'2000, but that looks increasingly doubtful in the immediate term.

With a daily close above the 50dma of sp'2044... any hopes of VIX 30s.. is now off the menu.
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more later... on the indexes

Closing Brief

US equities saw a second day of gains, sp +29pts @ 2050. The two leaders - Trans/R2K, settled higher by a rather significant 1.5% and 1.8% respectively. Near term outlook remains highly uncertain, whilst market remains under key resistance of 2064.


sp'60min

Summary

*another strong closing hour, with a key close above the 50dma of sp'2044.
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**awaiting earnings from DIS, CMG.
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Frankly, a tiresome day. I had been seeking to launch an index short position, but price action/structure simply looked too bullish.. so I'm on the sidelines.  Sure, we might get stuck in another day or two... but today sure didn't merit any attempt to short this nonsense

It is notable that despite another day of gains, the bigger monthly cycle remains bearish.

Have a good evening
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more later... on the VIX

3pm update - a second day of gains

US equities look set for a second consecutive day of gains, and the sp'1980 floor now looks a long way lower. VIX is confirming the equity gains, having slipped from the 22s to the 17s. Gold remains weak, -$12, whilst Oil holds powerful gains of 6.2%.


sp'60min

Summary

Regardless of the exact close... equity bulls have clawed well away from the danger zone of 1980/70s.

*it is notable that despite two days of gains, the giant monthly cycle for the sp'500 remains bearish.
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Notable gains, TWTR +7%... breaking the $40 threshold
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back at the close

2pm update - building gains

The equity bears are getting routed, with the market seeing another micro cycle into the mid sp'2040s. A break above the 50dma (2044) would be very significant, and open up a test of the key resistance at 2064 before the weekend. Metals remain weak, Gold -$10, whilst Oil is soaring +6.4%


sp'60min

Summary

Suffice to say... who the hell will want to be short now?

Not only a break of the down trend, but price action looks pretty strong. Whether we close above.. or below the 50dma shouldn't be a major concern for the bulls today.

Personally, I'll have no part of this madness today... there is no clarity right now.
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Notable strength... TWTR

With earnings at the Thursday close... this crazy momo stock could be some 20/25% higher by the Friday close.

12pm update - holding the gains

US equities are holding rather significant gains, with the sp' in the 2030s, along with VIX 18s. As confidence returns to the market, metals are weakening, Gold -$14. Oil is helping to inspire the equity rally, +2.0%


sp'60min

GLD, daily

Summary

*the decline in Gold is rather interesting, a break under 120 on GLD will confirm problems ahead
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There is little to add. Clearly.. unlike yesterday.. the opening gains are holding... and we have a clear break above the recent down trend.

Bulls should be seeking a daily close above the 50dma of sp'2044.. but that simply isn't necessary today.

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VIX update from Mr T


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time for lunch.... back at 2pm

11am update - utter mess

US equities remain broadly higher, having earlier hit sp'2040, a full 3% above the Monday low. VIX is in melt mode, -4% in the 18s. Metals continue to slide.. as confidence returns to the market.. Gold -$15. Oil is holding gains of a rather significant 2.6% in the $50s


sp'60min

sp'daily5

Summary

*the downside targets on the daily chart now look stupid, unless market closes red today.. they'll get removed.
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With the continued ramp from sp'1980 to 2040.. I am pretty much aghast at this latest nonsense.

If you ignore the brief break under the double floor of 1988... we remain stuck in tight trading range.. under key resistance of 2064.
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Frankly.. my near term confidence is LOW. Until we're above 2064... or under 1980... who wants to get involved in this crap?
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Notable weakness, FB -1.3%. 

10am update - bear train wreck

US equities have managed to ramp almost 60pts across just six trading hours. VIX is reflecting the move, having swung from 22s to 18s. Metals are cooling as market confidence returns, Gold -$10.


sp'60min

sp'weekly2

Summary

*especially concerning.... the weekly candle has flipped from red to outright bullish green.
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So.... all that is left now is the 50dma of sp'2044... then declining resistance (daily cycle) 2050... and finally 2064.

Utterly tiresome.... who the hell wants to short against this?  Bears really needed to hold the bounce to 2025.... total FAIL.

Notable gains...... well, just about everything.

10.01am... factory orders -3.4%... a clear miss

Pre-Market Brief

Good morning. Futures are moderately higher, sp +6pts, we're set to open at 2026. Metals are weak, Gold -$3. Oil is still bouncing, +2.0% in the $50s.


sp'60min

Summary

*awaiting factory orders data at 10am
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So.. with Oil continuing to bounce, the market is set to break into the 2030s...  full 50pts above yesterdays low. It sure remains volatile out there.

Frankly, I'm starting to get real tired with this market again. Two full months of messy chop, and now we're just 3% from new highs again.
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*I was considering picking up a short index position, but now, I might just sit this out for some time.

A snowy night in the city...  and other parts of the UK.. see... HERE

Too many boats?

Whilst equities saw some rather dynamic swings to start the week, one of the older measures of economic strength/activiity - the Baltic Dry Index, broke a new multi-decade low, settling -6.5% @ 590, well below the 2008/09 collapse wave low of 663.


BDI, monthly

Summary

So... now the BDI is in the 500s.

I sure can't say its a bullish sign, but then... the BDI is an indicator that is greatly influenced by the number of transport ships in the world.

What can be agreed upon though... the BDI peak of 2008 - in the 12000s... looks infinitely out of range for some years.


As for equities...

An interesting day to start the month, with a closing hour ramp as a truck load of short-stops were no doubt hit.

sp'monthly'1

Unlike October.. the equity bears finally managed a bearish monthly closing... with a bearish MACD cross. For those not particularly 'technically' minded, it might seem like a minor issue.

Its not.

... and could be the preliminary warning of a multi-month down wave... in the manner of summer/autumn 2011... something the bears (myself included) have been seeking for a good three years.
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Looking ahead

Tuesday will see Factory orders data.

*there are two fed officials on the loose, notably Bullard, whom caused havoc for the bears in October.
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Goodnight from London

Daily Index Cycle update

US equities saw some rather dynamic swings across the day, with the sp'500 settling +25pts @ 2020 (range 2021/1980). The two leaders - Trans/R2K, settled higher by 1.5% and 0.9% respectively. Near term outlook is increasingly bearish, with viable downside to sp'1920/00, along with VIX in the 30s.


sp'daily5

Dow

Summary

Suffice to say.... despite the Monday chop (although it was a rather wide range of 30pts)... the market still looks set for renewed downside.

Today the Dow lost (if briefly) the 200dma... the sp'500 -along with other indexes, look set to follow within the next few days.
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Closing update from Riley


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a little more later...