VIX turns higher into the close

With equities breaking new cycle highs (sp'2111), the VIX was still on the slide, settling -4.5% @ 13.27 (intra low 12.90). Near term outlook offers an equity wave lower, which should equate to VIX 15/16s. Broadly, VIX looks set to remain subdued into early August.


VIX'60min

VIX'daily3

Summary

*closing hour price action in both the VIX and equities was a likely hint of 'Wednesday trouble'.
--

A move higher to the gap zone in the 15/16s looks probable for Wed/Thursday.

The big VIX 20 threshold looks out of range in the near term.. and probably until the latter half of August.
--

more later... on the indexes

Closing Brief

US equities closed moderately higher, sp +9pts @ 2108 (intra high 2111). The two leaders - Trans/R2K, settled -0.1% and +0.6% respectively. Near term outlook is offering a wave lower to around sp'2080... along with VIX 15/16s. From there, renewed upside into next week.. and probably all the way into early August.


sp'60min

Summary

*closing hour, a distinct touch of weakness, offering a hint of tomorrow.
--

For the bears... the fourth consecutive lousy day... with the market having ramped from a double floor sp'2044 to 2111.... and VIX cooling from 20.05 to 12.90. Pretty incredible how fast the market can get super complacent.

Holding to a retracement down to around sp'2080.. with VIX 15s... maybe 16s.. briefly.

-
more later.. on the VIX

3pm update - tedious Tuesday

US equities have managed to claw another point higher to sp'2110. Cyclically, the market is still due to break lower within 1-2 trading hours... with Yellen a very valid excuse tomorrow morning. Regardless of any weakness tomorrow, the broader trend still looks bullish into early August.. before things might finally get 'interesting'.


sp'60min

VIX'60min

Summary

Well.. the market sure is taking its time in exhausting this up wave.

From a pure cyclical perspective.. this market is due to break lower... and by the Wed' close, there will be very strong support around 2080.

--
*I am on the sidelines. having dropped INTC-long near the open. If I'm correct about Wed' weakness... INTC is going to really struggle tomorrow... and if <29.30.. it would bode badly for the market reaction to earnings.
-


3.07pm. sp' 2111... it almost appears we're in algo-bot melt mode.

Regardless... we're still due a down wave... with the Yellen tomorrow.



3.28pm.. Well.. still the same....  VIX is back above 13.00 though... with sp'2111.

Bulls arguably getting an opportunity to exit into strength... ahead of the Yellen.

Downside target remains 2080.. but I realise that is a full 1.5% lower.. and that sure feels a long way down right now.. and probably out of range for tomorrow.

So.. maybe any down cycle will drag out into Thursday.. .before rallying on Friday.
-

2pm update - weakness still due

US equities are stuck around the earlier high of sp'2109.. with VIX in the low 13s. The hourly cycle remains on the high side, and there will be ample opportunity for the equity bears to make an appearance within the next 5 trading hours.


sp'60min

VIX'60min

Summary

Price action is increasingly stuck.. and the hourly equity cycle is due to turn negative in 2-3 trading hours. Certainly, we look set to lose the sp'2100 threshold by tomorrow.

As ever.. Yellen is a wild card...  there is also a Fed beige book at 2pm tomorrow.

--
*I continue to have eyes on INTC, but near term price action - considering the indexes, is particularly weak.

Broader price structure (as I've been droning on about for over a month) is a giant H/S formation.. offering downside to at least 26/25.. ideally $22.50.

I still think INTC is a key signal for the broader market.. and if correct, it bodes for main market trouble this Sept.

--
Meanwhile in London city... approaching grey gloom.. from the west.

Bullish Tuesday rains

--
stay tuned

1pm update - VIX likely clarifying a turn

US equities are holding moderate gains, but look increasingly vulnerable this afternoon, and much more so.. across tomorrow morning. A natural retrace to around sp'2080 - with VIX 15s, looks probable.. with Mr Market using Yellen as an excuse to 'get spooked'.


VIX'60min

sp'60min

Summary

Little to add.

*I do refer anyone to the VIX update from Mr T'... added late in the previous hour.
--

So... I'm expecting a minor net daily decline... 2095/90 zone... with 2085/80 tomorrow morning.

Broadly... the weekly cycle is continuing to suggest upside into early August.. before things 'get interesting'.

--
back at 2pm

12pm update - provisional sign of a turn

The VIX is offering the first sign of a near term floor, having hit 12.98.. along with sp'2108. There is a rather clear gap zone from the 14.70s to 16.80s. A Wednesday washout to sp'2080.. with VIX 15s looks very viable.. before resuming higher into next week.


VIX'60min

Summary

Little to add.

For the equity bears.. its been a rough time since last Friday morning. Regardless of any weakness this afternoon.. and tomorrow morning, the broader trend still looks upward into August.
--

notable strength...TWTR

5min cycle

Rumours of a $31bn buyout offer... but right now... subsequent chatter of denials are flying around.  Crazy.

--
I've eyes on INTC.. perhaps to pick back up tomorrow late morning.. right now the 29.50/30 zone looks viable.

60min

--
VIX update from Mr T. .. better late than never.



--
time for a cool drink

11am update - typical turn time

US equities are due a natural down cycle, having probably peaked at sp'2105.. and VIX 13.06. There is viable downside into early Wednesday - when the Yellen is due to appear, to the micro gap around sp'2080. Metals and Oil are under increasing pressure as the USD is battling to turn back positive.


sp'60min

VIX'60min

Summary

Well, it the usual turn time of 11am... considering the smaller 5/15/60min cycles, I'd be surprised if we don't start seeing some moderate weakness for the rest of today.

A mini washout tomorrow morning to around 2080 would be pretty natural.
--

*I have my eyes on INTC (earnings Wed' at the close)... I'd consider picking it up again.. if 29.50s.. or lower. There seems ZERO hurry though.. not least before the Yellen appears.
--

time for an early lunch
-

11.36am.. Despite another 3pts higher...   it changes little... market still due to cool lower.

As a short trade.. overly risky.. to me at least.

From the long side.. you'd think some would be raising their stops right now.... to the sp'2100 threshold... if not higher.
-


11.46am.. TWTR rumour.. $31bn offer....

Stock +5%.... not much.. considering.

10am update - opening chop

US equities open with minor chop, stuck around the price gap zone of sp'2098/2101. VIX remains subdued in the upper 13s. USD is cooling, -0.4% in the DXY 96.40s. Metals and Oil are broadly flat.


sp'60min

Summary

There remains threat of a wave lower to the 2085/80 zone... but regardless of that.. market still looks headed broadly higher into early August.
--

notable weakness, airlines, DAL/UAL, both lower by around -1.6%
-

*EXITED INTC-long.. from $29.90.. its been annoying me lately... I am still bullish to the 31.75/32.00 zone... but for now.. I'm outta it. Naturally it breaks higher to 30.11 a few minutes later.
-

Seeking a broad market ceiling around 11am.. and then weakness into the 2pm hour.
-

10.05am.. Big price gap in the VIX..... that is my concern about being long in the immediate term.

With Yellen tomorrow morning... market could use it as an excuse to shake out the weaker bulls.
-

10.25am INTC already cooled from 30.11 to 29.77.. maybe 29.50s tomorrow morning?

From a pure cycle perspective, market looks vulnerable.. at least into this afternoon. That micro gap around 2080 would match up with VIX in the mid/upper 15s.. .tomorrow morning.


10.30am. At the current rate of decline, the VIX will hit zero in 5-6 days. Clearly that ain't happening...  and it does look like a short term equity peak is due.

notable strength, oil/gas drillers, RIG/SDRL, higher by 3 and 4% respectively.
-

10.42am  The micro 15/5min cycles are set to floor....  with VIX 13.14.

Equity bull maniacs getting a rather natural time to exit... with some stocks having maxed out almost an hour ago.. notably.. INTC.

Pre-Market Brief

Good morning. Futures are broadly flat, sp +1pt, we're set to open around the 2100 threshold. USD is back in cooling mode, -0.2% in the DXY 96.60s. Metals remain weak, Gold -$4, with Silver -1.1%. Oil is similarly weak, -1.0% in the $51s.


sp'daily5

sp'weekly6

Summary

*with a bearish outlook from mid Aug-early Oct', I will be highlighting weekly'6 across the next few months.
--

Awaiting key retail sales data  at 8.30am

--
notable strength

Micron (MU), +12%... after a China takeover bid.

JPM +0.7%, after better than expected Q2 earnings.. although the financials are still struggling to increase revenue. They need higher int' rates!
-

Update from Mr C.


--

Overnight China action: volatility continues to cool... with a day of relatively minor chop, briefly breaking the 4K threshold, but settling -1.2% @ 3924. Upside target remains 4300/500.. before another wave down to around 3200/000.
-

Have a good Tuesday


8.31am. Retail sales -0.3%.... vs previous 1.2%... its a pretty lousy number. 


9.00am... Equity futures cooling a little.. sp -2pts... 2097....  risk remains 2085/80....  but even that looks difficult. 

USD weakening... -0.5% in the DXY 96.30s.

Eyes on the VIX

With equities closing higher for a second consecutive day, the VIX was naturally whacked lower. Based on many previous cycles, 2-3 weeks of a subdued VIX appear likely. By mid August though, there will be a very high threat of a renewed.. and particularly powerful surge in market volatility.


VIX'weekly

VIX'monthly

Summary

*note the upper bollinger on the giant monthly cycle - currently around the key 20 threshold.. where the VIX got stuck last Thursday.
--

Suffice to say, I am expecting the VIX to see some sustained action in the 20s in the late summer/early Autumn. Whether we briefly break into the 30s... difficult to say.

For now.. I am content to watch VIX.. but will likely pick up some Sept/Oct option calls in early August.

--
Looking ahead

Tuesday will see retail sales, import/export prices, and business inventories.

*fed official George will speak.. but that is not until after the close.
--

Goodnight from London

Daily Index Cycle update

US equities closed significantly higher, sp +22pts @ 2099. The two leaders - Trans/R2K, both settled higher by 1.1%. Near term outlook offers moderate threat of downside to 2085/80... but regardless of any Tues/Wed weakness, the broader trend looks bullish into early August.


sp'daily5

Trans

Summary

Suffice to say... market is battling upward from the double floor of sp'2044...  new historic highs (in some.. but not all indexes) look due into early August.

From there.. things should (in theory) get real interesting.
--

a little more later...