With equities climbing for the second consecutive day, the VIX continued to get crushed lower, settling -7.0% @ 12.50 (intra low 11.85). Near term outlook is mixed, with the hourly cycle offering a VIX rally across Thurs/Friday, but with sp'2100s closed above... the broader equity trend looks bullish into August.
VIX'60min
VIX'daily3
Summary
Suffice to say, I'm surprised.. and bemused to see the VIX back in the 12s... even flashing lower to the 11s on the FOMC announcement.
All things considered, VIX is now on the very low side.. as some might say... the only way from here is up...yes?
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*I remain long VIX from the low 14s.. which now looks a fair way higher! I am confident though I'll claw my way out of that position though.. net higher.
I remain seeking to be broadly long-VIX into Sept/Oct.
US equities closed broadly higher, sp +15pts @ 2108. The two leaders - Trans/R2K, settled higher by 1.7% and 0.5% respectively. Near term outlook is mixed, with the hourly cycles offering a down wave across Thurs/Friday, but the daily close >sp'2100 (where the 50dma is lurking) is a rather bullish signal for early August.
sp'60min
Summary
*awaiting earnings from the momo/hysteria stock that is the FB
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For the bears... a very disappointing day.. and that is probably under-stating it.
Not only did the market manage to close higher for the second consecutive day, but above the psy' level of sp'2100.. and decisively above the 50dma.
Maybe the bears will be lucky and get some kind of weakness across the remainder of the week/end month, but really.. that is mere hope right now.
*I hold VIX-long... but my entry in the low 14s is looking a long way up. Crazy!
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4.04pm.. FB earnings... better than expected... naturally the stock gets knocked lower... so far.. intra low of $90.60
Hmm
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Meanwhile... with a marginal miss in Whole Foods.. the market is upset with it...
Right back to the levels from Oct'2014... when sp' was a mere 1820.
Despite the Fed still unwilling to give any hints that rates will be raised at the Sept' FOMC meeting, the market is holding moderate gains, with a new cycle high of sp'2109. Equity bears should be desperate for a daily close under the 50dma @ sp'2100... along with VIX back in the 13s.
sp'daily5
VIX'60min'2
Summary
Well, despite some notable chop... the market is so far holding the gains, with a daily close <2100 now looking very difficult... as are VIX 13s.
It remains the case that from a pure cyclical perspective, we're on the high side, and it utterly bemuses me why anyone would be buying (and not selling) above the sp'2100 threshold.. considering the past few months of price action.
Regardless of the close... not the best of days for yours truly... but I've had far worse.
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notable weakness (as is usually the case) coal miners, CNX, -7.2% in the $16.40s. Recent earnings were dire.. and offers little hope for a long time to come.
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*FB earnings at the close... so that is something to watch for.
3.15pm.. chop chop.. sp'2108.... and clearly.. a daily close <2100 is out of range... which is a major victory for the bulls.
As things are.. with VIX in the mid 12s... it remains the case that it really can't go much lower anyway... right?
3.30pm.. sp'2108... VIX 12.30s.... Hmm.
Seriously... who wants to buy here?
Oh well.. FB due at the close... maybe they'll spike it to the big $100 threshold.. and then cool from there.
US equities remain holding moderate gains.. having ramped from a Monday low of sp'2063 to 2105. From a pure cyclical perspective, the hourly cycles are arguably favouring the bears into the close. USD and the precious metals are broadly flat, whilst Oil has built very sig' gains of 3.0%... as inventories declined.
VIX'60min'2
Summary
Awaiting some swings... but then.. market should pick a direction by 2.15pm.. and run with it into the close.. and probably into August.
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... as for the sunshine... in London city
Dark clouds by end of day?
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standing by...
2.01pm. So.. no rate hike of course... indexes choppy... but really... the smaller hourly cycle is on the high side. Just who is going to want to buy at these levels.. and at this time?
2.05pm.. VIX trying to put in a spike floor from 12.31... almost a full 400bps from the Monday afternoon high... crazy.
2.06pm.... REVERSAL in progress.. from sp'2108.
... now a bizarre VIX flash print of 11.85.. but immediately rebounding... some 'games' being played in VIX land?
2.15pm.. chop chop... it remains the case... with the FOMC out of the way... from a pure cyclical perspective... we're due an equity down wave.. of some degree.
notable weakness: TWTR, -14.3%... in the $31s. Anyone think that ain't gonna be trading <30 soon?
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2.21pm.. Equity bears just need to see VIX back in the 13s to offer some clarity of a near term floor. Won't take much to get that.. and there is plenty of time left today.
2.33pm.. Eyes on the VIX...
Seeking a daily close in the 13s.. above hourly 10MA.
US equities are holding just above the sp'2100 threshold... with VIX in the 12.75/13.25 zone. From a pure cyclical perspective, the hourly equity/VIX cycle favours the equity bears. Clearly, a daily close back under the 50dma of 2100 is important... along with VIX 13/14s.
sp'60min
VIX'60min'2
Summary
...little to add.
*for the record, I still think we will see some equity weakness after the fed press release.. and into the close.
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US equities continue to battle upward, with a new cycle high of sp'2105.. a clear break above the 50dma. Indeed, the real issue now is whether we will see a post FOMC reversal... or the gains holding, with a daily close in the sp'2100s. Considering the VIX is already crushed in the 12s... the bulls face a problem.
sp'daily5
VIX'daily2
Summary
*the blue candle on the VIX turns red... if it closes red.. it would bode in favour of the equity bears into early/mid August.
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little to add... ahead of the Fed.
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VIX update from Mr T.
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time to see what the cheerleaders on clown finance TV are saying...
US equities continue to battle upward, with a new cycle high of sp'2102.. with VIX in the 12.80s. Hourly equity cycles are on the high side, and despite the current gains... a daily close >2100 will be difficult. USD is starting to cool -0.1% in the DXY 96.60s. Oil has built sig' gains of 2.2%.. as inventories show a net draw of -4.2 mill'
sp'60min
VIX'60min'2
Summary
*washout.. as in the market washing out the weaker bears.
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This is getting somewhat annoying (not least in terms of the VIX).... but then.. its a fed day.
For me.. what matters is where... and the style in which we close the day.
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As it is, we're now around 2% higher from the Monday low... based on what... good earnings data?
notable weakness: TWTR -12.9%... no opening reversal.... price action looks ugly into the autumn.
strength: oil/gas drillers, RIG +3%, SDRL +8%... but the broader trend remains bearish.
US equities open with some minor chop, with the sp' hitting 2097...and VIX in the low 13s. There are multiple aspects of resistance around the sp'2100 threshold, and considering the hourly equity/VIX cycles, the market looks set for some weakness in the late afternoon.
sp'60min
VIX'daily2
Summary
*a second blue candle in the VIX, I want to see it turn green by the close... will need at least the 14s.
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Well, in many ways... its a case of 'come back in 4 hours time'. Until the FOMC announcement is out of the way... there really isn't much to add.
That will give opportunity to highlight some other things though...
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notable weakness... TWTR
Ugly break lower... first target is the psy' level of $30, but the IPO price of $26 is an equally valid target, given another 2-3 months.
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10.03am.. Pending home sales m/m -1.8%... another lousy number from June. There remain a sig' number of data points that don't bode well for Q2 GDP.
Market is expecting 2.9% growth, but to me.. that seems overly optimistic. I'd not be surprised to see 1.5% or lower. Oh well, we'll find out tomorrow at 8.30am.
Good morning. Futures are moderately higher, sp +5pts, we're set to open at 2098. From a pure cyclical perspective, equities will be particularly vulnerable later today and into early Thursday. With the USD broadly flat, metals and Oil are similarly u/c.
sp'60min
vix'60min
Summary
Well, its Fed day... again.
Expect a lot of minor chop into the afternoon. Then.. some swings... and then the market is going to pick a direction... and likely stay with it into next week.
There is key GDP data tomorrow morning.. so that will be an issue... but still... equity bears should be somewhat desperate for a net daily decline today... even a moderate one.
*I am long-VIX. I can imagine the 12s will be hit (if briefly) today.. which won't be so great... I'd sure like to see a daily close at least in the 14s.. if not the 15s.
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notable early movers..
TWTR -9% in the $33s. An ugly reversal from the AH high of $40.90. It would seem that acting CEO Dorsey can really upset the market with each word he mutters.
YELP -20%.. post earnings upset
AKAM -9%... another post earnings sell off.
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Overnight China action: There was talk of a $100bn Govt' fund to prop up equities, which sure helped turn the Shanghai comp' in the late afternoon, settling +3.4% @ 3789. Broadly... renewed downside remains due.. to the 3200/3000 zone. 2500 remains a valid capitulation low in early Oct'.
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Doom chatter, Hunter with Roberts
As ever.. make of that.. .what you will.
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Have a good Wednesday!
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8.01am... re: TWTR...
Keep in mind the IPO price was $26 in Nov' 2013. The lowest level ever traded was $29.51 (May 7th 2014). Considering anticipated main market weakness into the early autumn, and the break to the 32s post earnings, further weakness to the IPO price looks probable.
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8.48am.. Indexes cooling.. back to flat... sp' 2093. Regardless of the exact open though.... minor chop into the afternoon. Then things get dynamic.
Whilst equities saw a significance bounce from the Monday low of sp'2063 to 2095, the bigger picture remains increasingly bearish. There remains a high chance that the market will see a monthly close under the 10MA.. currently @ sp'2066.
sp'monthly1b
Summary
I think the chart and annotations speak for itself.
Suffice to add... if we do get some degree of sig' correction under sp'2000 this Aug-Oct', what then follows will shape the following 2-3 years.
*The Transports and Dow are already below their respective 10MAs... but frankly.. I'm tired... and I can't cover all the indexes in every post!
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Looking ahead
Wed' is Fed day, the FOMC announcement is due at 2pm.... but there will NOT be a Yellen press conf'.
US equities closed significantly higher, sp +25pts @ 2093. The two
leaders - Trans/R2K, settled higher by 2.7% and 0.8% respectively. Near
term outlook is for renewed weakness... once the FOMC is out of the
way... with a move to the sp'2050s... and VIX 17/18s.
sp'daily5
Trans
Summary
*the market laggard - Trans, remains under key declining resistance, despite a powerful net daily gain.
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As for the sp'500... sustained price action back above the 2100 threshold looks difficult in the near term. I would expect the 2050s within 3-5 trading days.
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