VIX battling upward

With equities closing lower for the third consecutive day, the VIX was finally able to hold onto gains, settling +4.9% @ 12.72. Near term outlook is for continued equity weakness to sp'2080, which should equate to VIX briefly in the 15s. The key 20 threshold looks out of range in the new up cycle.


VIX'60min

VIX'daily3

Summary

Little to add.

Despite a touch of cooling into the close, VIX at least managed some gains, a weekly close in the 13/14s still looks viable. The 15s look possible next Mon/Tuesday.

The big 20 threshold looks out of range until at least late August.

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more later... on the indexes

Closing Brief

US equity indexes closed lower for a third consecutive day, sp -11pts @ 2102 (intra low 2098). The two leaders - Trans/R2K, settled lower by -2.1% and -1.1% respectively. Near term outlook is for continued weakness into early next week, with sp'2080... along with VIX 15s.


sp'60min

Summary

*awaiting earnings from the much beloved hysteria/momo stock that is AMZN. From a pure technical perspective, its due a smack down.. to the 420/410 zone.
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So, another net daily decline...  sp'2080 target on track.. along with VIX 15s.


4.13pm..

AMZN

Surprisingly... AMZN actually turned a profit in Q2.. a monstrous 19 cent profit... a PE somewhere in the 500s.

As ever... that kind of nonsense is why I don't meddle in it. Pure... market madness.
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more later.... on the VIX

3pm update - a third day lower, but nevermind

US equities are set to close lower for a third consecutive day, lead by the Trans/R2K. The sp'500 is set to lose the 2100 threshold... with 2080 increasingly probable... along with VIX 15s. Despite the USD -0.5% in the DXY 97.10s, metals are still unable to rally, Gold -$3, with Silver -0.9%.


sp'daily5

GLD, daily

Summary

An interesting... if somewhat subdued day.

Clearly.. near term remains weak.... and VIX is not going to start spiking until 2100 is broken below.

After all, I see plenty of talk of a bounce first to 2110/15 zone. Its possible, but momentum IS swinging toward the bears.

*awaiting with interest - from a pure entertainment perspective, AMZN earnings. The Monday closing candle is warning of a post earnings smack down.

I'd sure not be long... but then neither would I short that nonsense.. after seeing the market ramp it many times across the last few years.. despite persistently trashy earnings.

Best guess... 420/410... but as noted, I ain't meddling in it!

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updates into the close... unless I fall asleep


3.12pm... .. and there goes sp'2100... VIX set for the 13s


3.41pm.. Well, a minor bounce to 2102.. .but still, its a clear fail of the 50dma.. and 2100.

2080 tomorrow?   hmm

2pm update - the two leaders are leading lower

The two leaders - Trans/R2K, are leading the way lower, -1.7% and -0.9% respectively. The sp'500 looks set to lose the 2100 threshold, opening up the lower gap zone of 2080... which in theory.. should equate to VIX in the 15s.


Trans, daily

R2K, daily

Summary

Little to add.

Regardless of any minor bounces... we do look headed for sp'2080.

I'd sure like to see a daily VIX close in the 13s.. at least it'd offer some hope of 14s for the weekly close.. and 15s next Mon/Tuesday.
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notable weakness: miners, FCX -8.3%.    ETF of GDX -2.7%.. in the $13.70s... outlook remains dire.

1pm update - increasingly weak

US equities are increasingly weak, with a daily close under the sp'2100 threshold now viable. VIX is battling for the 13s, which will open the door to a brief spike into the 15s. Renewed equity upside into August.. from sp'2080 looks probable.


sp'daily5

VIX'daily3

Summary

Not much to add.

With too few buyers... a third net daily decline looks a given. The only issue is whether the VIX can finally attain a close in the 13s, which should confirm the 15s will be hit... whether tomorrow.. or early next week.

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notable weakness... CHK

A truly dire year... original target of $7s.. almost hit.. and that is with the broader equity market holding still near highs. If sp' loses 2K within the next 2-3 months.. CHK will surely hit $5.

In some ways.. similar to BTU.. although I don't expect CHK to disappear.

12pm update - new retrace lows

With no buyers out there, equities have been unable to sustain earlier minor gains, breaking under sp'2110. As things are, VIX is not yet showing any concern.. as the market is still holding the big 2100 threshold. However, a break into the 2090s should see VIX finally break.. and build gains.


sp'daily5

VIX'daily3

Summary

A third net daily decline now looks a given. Is it time for the Fed to start rumouring QE4 yet?

A retrace to the lower gap zone of sp'2080.. along with VIX 15s looks increasingly probable.

All the bears need now is for AMZN to get trashed 15/20% overnight.
 
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Yours... busy with endless 'moving issues'....  (but it is rather exciting) :
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VIX update from Mr T.



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time for tea.. or something

11am update - chop chop

US equities remain somewhat choppy... battling to hold the Wed' low of sp'2110. VIX remains subdued, -2% in the 11.80s. Despite the chop, renewed equity weakness looks highly probable, with an eventual cycle low of sp'2080, with VIX 15s.


sp'daily5

VIX'daily3

Summary

*have been busy with home moving calls..... bear with me..........
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So.. a little up wave to sp'2116, with VIX ground back under 12.

All things considered though, I sure don't see many buyers at these levels. From a pure cyclical perspective, we're still due to cool into early next week.
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notable weakness: QCOM -3.4%... which is a somewhat ugly reversal from the initial post earnings gains.

strength: AAPL +1.3% @ 126, but after the Wed' drop... arguably, just a natural retrace/bounce.
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11.35am.. Something is going on in the miner, FCX -8.4%... HUGE vol'....

10am update - opening chop

US equities open with some minor chop, but are looking increasingly vulnerable across today, and likely.. into early next week. There remains significant probability of a full retrace to around sp'2080.. along with VIX 15s, before renewed upside into August.


sp'daily5

VIX'daily3

Summary

*opening reversal candles starting to appear.. as buyers are simply absent at these levels.
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Daily MACD (blue bar histogram) cycles for equity indexes and the VIX are both continuing to turn back toward the equity bears.

However, at the current rate, we won't see a more significant move for another 2-3 days, so the best case target of 2080 does not look viable until next Mon/Tuesday.
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notable weakness:  QCOM

Ugly daily chart across the past year. My broader downside target is 58/54
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10.01am.. Leading indicators +0.6%.... broadly inline, and an 'okay' number.

Equities set to break new retrace lows.. <2110.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 2116. USD is in cooling mode, -0.6% in the DXY 96.90s. Metals are catching a bounce, Gold +$7, with Silver +0.5%. Oil is +0.1%, but looks very weak in the $49s.


sp'daily5

sp'weekly

Summary

*so far this week, we're net lower by 12pts, a mere 0.6%. Clearly, the market is largely consolidating after last weeks strong gains.
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Breaking the recent high of sp'2132 looks out of range in the near term.

Best guess remains.. a move <2110.. probably losing the 2100 threshold.. with a fast gap fill to 2080.. and then UP into August.

VIX remains broadly subdued, but once the 2100 threshold is taken out, market should get a little twitchy, and the VIX should finally spike higher. As ever though, even if the 15s are hit.. they will be VERY brief... before renewed cooling to the 12/11s.
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notable early movers...

QCOM -1.3% in the $63s, post earnings depression.. having initially spiked to $66.

SNDK: +12%... one of the few techs to actually rise on earnings.
LVS +3.3%.. post earnings
CAT -2.8%...
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AMZN have earnings at the close, and I think that stock will be particularly vulnerable. From a pure chart perspective, the stock looks due a smack down, with a precursor warning on Monday, via a black-fail closing candle.

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*I think I could probably sleep another ten hours.. but I shall battle across the day! If I disappear though, its because I've fallen asleep on the sofa.
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Have a good Thursday.
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8.31am.. jobless claims, 255k...  a rather good number... and will get some spooked about a rate rise in Sept'.

According to clown finance TV, 255k is the lowest number since 1973... I find that hard to believe. Has the US never seen weekly claims <200k ?
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9.13am. With the USD recovering to -0.2%.. the metals are naturally already cooling from earlier gains... Gold +$2.

For the gold bugs out there... the pain is set to broadly continue to the giant $1000 threshold.. and that of course has dire implications for the related miners.

Daily Wrap

US equities closed moderately mixed, sp -5pts @ 2115 (intra low 2110). The two leaders - Trans/R2K, settled -0.3% and +0.3% respectively. Near term outlook offers further weakness to the sp'2100 threshold, the lower gap zone of 2080 remains a valid target, but VIX 15s look increasingly difficult, as the market simply isn't concerned.


sp'daily5

VIX'daily3

Summary

*the VIX settled -1.0% @ 12.10.. certainly a non-confirmatory signal for today's second consecutive day of equity weakness.
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So, a second day of weakness for the broader equity market, but for the bears, it remains a problem in that the declines are only minor, and this is being reflected in the VIX.

Best bear case in the near term remains a hit of the secondary gap zone of sp'2080. Considering the price action in the VIX today, that might only equate to VIX 15.30s (lower end of gap zone).. at best... and very briefly.
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Looking ahead

Thursday will see weekly job claims and leading indicators. In the scheme of things though, market will be paying more attention to corp' earnings.

*AMZN will post earnings (or the usual.. lack of)... at the close

The daily black-fail candle seen on Monday likely marks a near term top...  first downside is around 420/400.. a clear 15% or so lower. As ever though, being a profitless momo stock, Mr Market might just ignore another lousy quarter, and still burn out the existing shorts.

Still... those black-fail candles are not to be dismissed lightly. AMZN bulls... beware!
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Back in London

Traveling away from the coast, and back into the city is never easy. It has always felt like part of my soul is getting ripped out. This morning was not much different, but this time, I returned with the realisation that my next exit from the city will likely be a one way ticket. That thought is something I am very bullish about!

A glimpse of this morning...

Yeah, I sure could live with waking up to that every day.

Goodnight from London
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ps. normal service will resume tomorrow.

.. and thanks for the emails. I've still to reply, as I'm having issues with sending outbound mail.