VIX surges into the weekend

With US equities unravelling into the weekend, the VIX finally saw some upside kick, settling +9.5% @ 13.84 (intra high 14.73). Near term outlook - as supported by the bearish engulfing weekly equity candles, offers further upside next week, to the upper gap zone of 16.60 or so.


VIX'60min

VIX'daily3

VIX'weekly

Summary

*a significant net weekly VIX gain of 15.8%
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So, the VIX has climbed from a Monday low of 11.71 to the mid 14s. In the scheme of things.. this remains a very low VIX.

Even if VIX can hit the upper gap around 16.60 next Mon/Tuesday, the key 20 threshold looks out of range in the current cycle.

Once we move into the second half of August, I will be increasingly trading with a target of VIX in the mid 20s - at minimum, by late Sept'. For now.. I remain cautious.

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more later... on the indexes

Closing Brief

US equities closed the week on a very bearish note, sp -22pts @ 2079. The two leaders - Trans/R2K, settled lower by -0.7% and -1.5% respectively. With some bearish engulfing weekly candles, near term outlook is increasingly bearish, with a viable test of the 200dma at 2065 next Monday.


sp'60min

Summary

... and another week comes to a close.

For yours truly.. it has been especially bizarre.. but a good week. Hopefully, within two months, I'll be posting from the coast each and every trading day. I would imagine that might make my mood less bearish at times.
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As for equities, I really think the weekly candles are warning of some serious trouble. Bears just need to see a daily close under Dow 17500. There is nothing but empty air to 17000.. which would equate to sp'2000. That in itself would take out the double floor of 2044.. and cause all manner of problems.
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Thanks for the comments/emails this week, it is always good to hear from some of you.

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

3pm update - a very bearish end to the week

US equity indexes are set to close the week on a particularly bearish note. There are bearish engulfing candles all over the place, and with the current swing in daily momentum, next week is starting to offer something 'spooky'. As ever.. it is now a case of who wants to hold long across the weekend?


Dow'weekly

VIX'weekly2

Summary

*something I've not highlighted in a few days - not least as i was away, the VIX weekly cycle. Chart'2 shows how I wanted to see the underlying MACD cycle hold above the zero line (grey box)... and with today's gains it has.

A powerful VIX surge looks viable into the late summer.

Certainly, I wish to be regularly long the VIX.

*currently still holding a small VIX block.. but will probably drop in the 15s... and then reassess.
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It is turning out to be a somewhat exciting end to the week... stay tuned!
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3.03pm... amusing to see the cheerleaders on clown finance TV start to get a little rattled. I'm almost surprised they have started calling for no rate rises this year.

Eyes to the Dow... 17500 is very important.
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3.17pm.. micro bounce to sp'2082.. but its not important.. the technical damage has been done on a number of indexes.. but more on that.. at the weekend.
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3.35pm.. I remain long VIX... seeking an exit in the gap zone.. 15.30/16.60..   clearly, that is out of range until next Monday. So.. I shall hold across the weekend.



3.43pm.. sp'2077.. with VIX 14.50s... well... that'll do for a bearish end to the week.....   it looks like the market wants to test that 200dma next Mon/Tuesday @ 2065. Back at the close

2pm update - bearish engulfing candle?

Last week saw a low of sp'2080.03, a break under that level today would result in a weekly bearish engulfing candle, and that in itself would be highly suggestive of lower levels next week. The 200dma will be at 2065 next Monday.. and that is now the next target.


sp'weekly'2

VIX'daily2

Summary

*I am trying to focus on the trends, rather than get lost in any of the minor chop/waves these past few days.
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So.. lets see if we see 2079s.... that would most certainly be VERY suggestive of 2070/65 next Monday... and would equate in the low end of the VIX gap zone...around 15.30.
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A LOT of dynamic movers right now...

CHK -5%
RIG/SDRL, both lower by around -5%

Miners, FCX -10%... absolutely being destroyed.
GDX -2.8%... despite Gold being back to u/c
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Just consider that AMZN is now around 10% below the opening high...

Bull maniacs.. beware the black-fail candle. They are not to be dismissed lightly.
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2.06pm... Dow, weekly

A break under 17500 would be a major problem. Considering the daily momentum rate of turn... that does look probable.

Things are getting interesting!
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2.17pm.. BEARISH engulfing weekly candle on the sp'500...

Bodes for trouble next Monday.

VIX seemingly headed for the 15s....possibly by the close.



2.21pm. Serious technical damage being done now...    if Dow loses 17500... then empty air to 17000... aka... sp'2000.... next week.

The loss of the double floor of sp'2044 would be a major problem for those seeking new highs into August...
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2.36pm... Are we getting a little excited yet?  Eyes on those trends on the bigger weekly cycles... they are looking a bit of a mess.

notable weakness:  AA -2.6% @ $9.70.... on its way to the 8s.. or worse.

1pm update - VIX candle turns green

With the sp'500 slipping into the 2080s, the VIX daily 'rainbow' candle has turned an outright bullish green. A daily close in the 14s would give extra clarity that a gap fill in the 15/16s is due next Mon/Tuesday. Metals remain broadly weak, Gold -$2, with Silver -0.8%. The related miners are naturally also being impacted.


VIX'daily2

Summary

I was looking for a green candle.. and we now have one.

Regardless of the close (green.. or blue)... momentum is turning toward the equity bears. Stronger equity downside action looks very probable next Mon/Tuesday.

The bull maniacs should start being mildly concerned about the double floor of 2044 holding.
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notable weakness: miners, GDX

Dire. Simply... dire.
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1.01pm...  re: Monday. The daily MACD cycles are offering a bearish cross on Monday.. and that would bode for more significant downside.

Right now... the 200dma will be 2065 next Monday.. and would make for a rather interesting target... along with VIX 15/16s.

12pm update - broadly weak

US equities remain broadly weak, with a new cycle low of sp'2092, along with VIX 13.52. Regardless of the exact weekly close, the trend looks bearish for the first half of next week. sp'2080 looks a given, but if VIX is to fill the gap zone of 15/16s, the 2070/65 zone might well need to be hit.


sp'daily5

VIX'daily3

Summary

So... we've slipped from sp'2132 to 2092.. almost 2%. Clearly, nothing too major, but with a fractional lower high (from 2134, May 20th).. things are getting a little interesting.

All indexes are set for net weekly declines.

Equity bulls had better hold the recent low of sp'2044.. or its a huge problem.
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Notable weakness, energy stocks: CHK -2.4%, RIG/SDRL, both lower by around -3.2%

strength: 3x bearish energy, ERY +3.7%

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VIX update from Mr T.



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time for some tea...as the rains in London are starting to cause some local floods.

11am update - still no buyers

US equities are continuing to slide, with a fourth consecutive net daily decline now probable. It increasingly looks like sp'2080 is a given, with the market possibly seeing a more intense washout next Tuesday, in the sp'2070/65 zone. VIX is battling upward... for a weekly close in the 14s.


VIX'daily2

sp'daily5

Summary

A fair few 'more balanced' than yours truly, have been calling for sp'2110/15 zone, but that looks out of range. There simply doesn't seem to be enough buyers out there right now.

Instead, a weekly close in the 2095/85 zone looks viable.. along with VIX 14s.
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Eyes on the daily MACD cycles.. which are highly suggestive of more significant downside... more so on Tuesday.
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notable weakness: energy stocks, CHK -2.6% @ $8.40s, as Nat' gas -1.1%. CHK looks like a $5 stock by early October.
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BBRY... as highlighted to me by Deflationland

That sure ain't pretty.

10am update - opening weak chop

US equities have failed to hold the moderate pre-market gains, with the sp'500 already breaking a fractional new cycle low of 2098.20. VIX is similarly battling (if slowly) upward. From a pure cycle perspective, the bigger move to the downside will be next Mon' or Tuesday. Metals are weak, Gold -$7, with Silver -1.7%


sp'daily5

VIX'daily2'

Summary

*awaiting the first green candle - of this cycle, on the VIX daily chart
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So... a somewhat subdued open, and those hoping for sp'2110/15 zone are in much the same situation as yesterday. Except momentum is a little more in favour of the equity bears today.. and will be much more so next Mon/Tuesday.

Interesting how Greece has almost completely faded from the news.

Did anyone realise the Greek stock market is still shut? lol

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AMZN.. utter market hysteria

The daily black-fail candle could be a classic exhaustion top. What remains stunning is how the mainstream financial media are treating Amazon, as though it making a fractional profit is some kind of masterful achievement.

Utter farce.
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Despite the heavy rains in London city... I'm in a good mood.

time for tea I think :)
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10.02am.. New home sales -6.8% in June.... a truly lousy number. 

Indexes remain a little twitchy.. the low 2090s look well within range by the close. 

notable weakness, FCX -4.5%.. .as metal prices continue to slide.

Pre-Market Brief

Good morning. Futures are moderately higher, sp +6pts, we're set to open at 2108. USD is back on the rise, +0.3% in the DXY 97.40s. Metals remain very weak, Gold -$8, having hit 1072 in overnight futures trading, with Silver -1.2%. Oil is +0.2%, but remains under the key $50 threshold.


sp'daily5

VIX'daily2, Elder

Summary

*seeking a green candle on the VIX 'rainbow' chart today.. or Monday. The 15s look probable... but anything >17 looks out of range in the current cycle.
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So... we're set to open a little higher, but then.. that was the case yesterday morning, and that didn't work out so well for those looking to chase the market higher.

The daily MACD cycles continue to swing back toward the equity bears. More significant downside looks viable next Monday.. or certainly, by Tuesday.

Best guess.. sp'2080, which should equate to VIX briefly in the 15s. From there, renewed upside into August.
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notable early movers

AMZN +19% @ $574... a hyper short squeeze.. as the company magically makes a micro profit of 19 cents for Q2.

GDX -1.8% @ $13.37... utterly dire situation for the mining stocks, as Gold is headed for the giant $1K level.

SBUX +4.5% post earnings caffeine high.

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Update from Oscar


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Overnight China action: China was around 1% higher for much of the day, having hit 4184, but saw some significant weakness into the close, settling -1.3% at 4070. The 4300/500 zone looks due.. before renewed severe downside.
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Have a good Friday

The China bounce is almost complete

The Shanghai comp' has climbed from 3373 to a Thursday close of 4123. There are multiple aspects of resistance in the 4300/500 zone. Renewed severe weakness looks due into the early Autumn, breaking new cycle lows to the 3200/000 zone. Will the China leadership shut the market completely?


China, daily

China, monthly

Summary

Seen on the daily cycle, there is a highly arguable ABC bounce... very close to completion.

The bigger monthly cycle maxed out in June, with the initial wave flooring at 3373. Further downside to the 3200/3000 zone looks probable in Sept/Oct. Best case for the doomer bears is around 2500, which would be a clear 50% crash from the summer high.

I realise many are calling new highs later this year, but I find that hard to believe.. not least if the US market has 'issues' from mid-August to early October.
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Looking ahead

Friday will see PMI manu' and New Home Sales.

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Goodnight from London

Daily Index Cycle update

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'daily5

R2K

Trans

Summary

*Transports remains the market laggard, with another clear failure at declining resistance/channel. Below 8K, there really isn't any support until the Oct'2014 low of 7700.
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For those watching, it was notable to see more significant weakness in the Trans/R2K... leading the broader market lower, and indeed.. we even saw a break under sp'2100 today.

Further weakness to the lower gap zone of sp'2080 looks due in the near term.

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a little more later...