VIX cools into the weekend

Despite equities closing a little weak, the VIX still cooled into the close, settling -0.1% @ 12.12 (intra high 12.63). Across the week, the VIX saw a net weekly decline of -11.8% (intra high 16.27). Near term outlook is for renewed equity weakness, which should offer VIX 16/17s.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Little to add.

VIX is back in the sub teens. On any basis, the VIX can't go much lower. It is merely a matter of when the VIX is back in the mid/upper teens in August.

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*I remain long-VIX from the low 14s, seeking an exit in the 15/17s.

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more later... on the indexes

Closing Brief

US equities closed a little weak, sp -4pts @ 2104 (intra high 2114). The two leaders - Trans/R2K, settled -0.3% and +0.5% respectively. Near term outlook is for renewed equity weakness, and if the 200dma (2070s next week) can be closed under, there is empty air to the giant 2000 threshold, which would equate to VIX in the low 20s.


sp'60min

Summary

.. and another week at the twisted casino comes to a close.

Suffice to say... a week and month for the equity bulls... but there remain an increasing number of little econ/financial tremors out there.

Market remains paranoid about a rate rise, but if I'm right about equity weakness across the Aug-Oct' period.. the Fed will be too paralysed with terror for even a 25bps increase.

As for next week, well.. I have to imagine the bears have a pretty good chance at testing the sp'2070s again. The bigger weekly VIX chart continues to warn of much higher volatility across the next two months.

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*I hold long-VIX, and short-INTC, across the weekend.

Thanks for all the messages/email across the week... always good to hear from you.

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

3pm update - weakness into the monthly close

US equities are seeing a little weakness, as the hourly equity MACD cycle finally sees a bearish cross. Regardless of the exact close, all indexes are set for net weekly gains, and most indexes (Trans being the exception) are set for net monthly gains.


sp'60min

Summary

Well, its been a pretty dynamic month. Unquestionably, a week.. and month for the equity bulls.

Despite the gains, underlying momentum..and price structure on most of the US indexes continues to swing toward the bears.

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special note...

VIX weekly'2

I would prefer to see the MACD cycle turn back to positive by the close. Its not absolutely essential to my broader bearish outlook for Sept/Oct, but it'd be useful to see.
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3.30pm.. the rats are getting a little twitchy into the monthly close...

A close <sp'2100 would be a bonus.. and is now within range... with VIX 12.60s.
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3.42pm.. A rough day for the energy sector.   3x bearish.. ERY +6.5%

CHK -2.8%.. .as Nat' gas -2.2%...

Look at those rats jump.. they are wanting to close out for the weekend.  I can't blame them..having seen another dumb bounce from 2063 to 2114.

2pm update - rolling over... finally

After some minor swings this morning, a few hours of chop, the hourly equity MACD cycles are finally in the process of seeing a bearish cross. Underlying price pressure should be increasingly weak into the monthly close, but with the first opportunity of significant downside not until next Monday.


sp'60min

VIX'60min

Summary

So... with two trading hours left of July... we're getting the first proper bearish signal.. with a short term peak of sp'2114, with a VIX floor of 11.82.

notable weakness: oil/gas drillers, RIG/SDRL, both lower by around -5%.. as Oil -2.6% in the $47s.

1pm update - still waiting

US equities are seeing increasingly tight price action around sp'2111. USD has recovered half of the earlier declines, -0.6% in the DXY 96.90s. Metals are holding moderate gains, Gold +$7. Oil remains notably weak, -1.7% in the $47s.


sp'60min

VIX'60min

Summary

*VIX update from Mr T. posted late.. see previous post.
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A somewhat tiresome end to the week... and month.

Equity price structure is a viable bearish wedge on the hourly cycle, but I realise some would argue against that.

Regardless of where we close today... a bullish week, but with a lower high.. and a lower low - at least for all indexes.. except the Transports.

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notable weakness: oil/gas drillers, RIG -3.3%, SDRL -4.0%


1.32pm.. Bearish MACD cross on the hourly cycle... imminent.

12pm update - awaiting a break lower

US equities remain very choppy, and that could easily remain the case into the Friday/monthly close. The hourly cycle setup still favours the equity bears.. with a down cycle due. VIX looks floored in the 11s... the bigger weekly cycle will be offering the 16/17s next week.


vix'60min2

Summary

A pretty messy day to end the month.

Re: precious metals. Gold has certainly seen some swings today.. from -7 to +12... but now cooling.. just +$7. For July, Gold is set to close net lower by around $70 or so.. and still on track for the psy' level of $1000.
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*Considering the current equity price action, I'll hold long-VIX, and short-INTC across the weekend.

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notable weakness, AAPL.

A break under the recent $119 low would be pretty important.. and bodes for broader market weakness. INTC is similarly looking weak... but more on that later.
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VIX update from Mr T.



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time for a cool drink.

11am update - moderate gains

US equity indexes are moderately higher, with particular strength in the second market leader - R2K, +0.9%, higher for the fourth consecutive day. Metals are cooling from the earlier 'USD smack down' inspired highs, Gold +$5, with Silver +0.7%. Oil remains notably weak, -1.4% in the $47s.


R2K, daily

sp'60min

Summary

Little to add.

The opening reversal has itself reversed.. and here we are with gains across all the main indexes.. if minor.

A pretty choppy morning.. with notably weakness in energy/resource stocks.

I am still seeking weakness... but for now... we're still awaiting the hourly equity cycles to get a bearish MACD cross. 
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time for an early lunch

10am update - opening reversal

US equities opened a little higher to a new cycle/bounce high of sp'2113, but then see a rather clear reversal back lower - as also reflected in the VIX. USD remains beaten down though after weak employment cost data. Commodities are mixed, Gold +$9 (from -7), with Oil -0.7%


sp'60min

VIX'60min'2

Summary

*CHICAGO PMI 54.7... a clearly non-recessionary number, and much better than the market expectation of 50.0.
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The final day of the month is proving to be pretty wild already... we have a long day ahead!

It remains the case that from a pure cyclical perspective, we're due increasing weakness into the weekend... and probably.. next Monday.
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notable weakness: BABA -1.2%

TWTR -1.8%... with the psy' level of $30 within range... and it won't likely hold.

LNKD, -9.6%... utterly hillarious reversal from the AH gain of 12%.
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Hourly equity/VIX cycles are set for bearish/bullish crosses respectively.. by lunch time.... so.. we should in theory see increasing weakness across the day.

All thats missing is a 'spooky' Greek news headline.
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10.01am.. consumer sentiment 93.1.... broadly inline...


10.06am.. Eyes on AAPL.. if it loses the $119 low... that is a major signal

. watching
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notable weakness, XOM and CVX, both -4.5%... on lousy earnings


10.32am.. chop chop.... eyes on AAPL... already hitting $120s.

Pre-Market Brief

Good morning. Futures are a little lower, sp -2pts, we're set to open at 2106. USD is cooling, -0.2% in the DXY 97.30s. Metals are ending the month on a negative note, Gold -$7, with Silver -1.1%. Oil is similarly weak, -1.7% in the $47s.


sp'daily5

VIX'weekly'2

Summary

Well, its the end of another month.. and for the chart maniacs out there.. how we close the month is always an important issue.

For me... I want to see the VIX climb into the weekend, and see the weekly MACD (blue bar histogram) turn back positive. A neg' monthly close certainly doesn't negate hope of equity downside into Sept/Oct, but I'd sure feel better about things if we do close back above the zero threshold.
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*awaiting Chicago PMI, market is expecting 50.0. Anything in the 49s.. or certainly 48s will again be a warning that things ain't so great out there.
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early movers...

oil/gas drillers, SDRL -2.4%.. as Oil resumes lower

EXPE +8.3%... post earnings

LNKD -5.8% @ $214.. which is a rather severe reversal from the initial earnings reaction of +12%.
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Overnight China action... China ended the month on a negative note, settling -1.1% @ 3663. The monthly decline (will post more on it later)... confirmed the big turn in June. Further weakness to the 3200/3000 zone looks a given. Considering its only July.... with a 'window of weakness' into Sept/Oct... I'd not be surprised to see 2500 before the retail-gambling madness resumes higher into next year.
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Have a good Friday.
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8.02am... XOM earnings... clear miss... EPS @ $1.... a year ago.. it was earning over $3 per quarter!

initial stock reaction.. a little lower, -0.9% @ $82.00

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meanwhile... others are getting credit for my messages...

Bearish media hack interns.
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8.25am... Energy stocks having real problems... XOM -1.8%... CVX -1.1%.. the latter has earnings at 9am
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Indexes cooling, sp -4pts... 2104.

Equity bears need to see a break <2090 today.. with VIX 14s.... that will offer clarity for next week.


8.31am.. and futures jump from -4 to +1pt..... on 'employment cost' data, +0.2%... lower than expected... hence market looking for less chance of rate hike in Sept'


8.34am. CVX..  EPS 30 cents.. vs $1.16 estimate..   another huge miss.....   CVX -1.6%...

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With the employ' cost data... USD has snapped lower, -0.7%... which is helping Gold/Oil recover.

The bigger data point remains PMI... due at 9.45am.
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USD smack down... -0.9% in the DXY 96.60s.... but still net higher on the month.
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8.43am.. Well... its an old fashioned 'dollar lower... everything else UP' situation... USD -1.0%.. with sp now +3pts... 2111.

Gold reversing from -7 to +2.     Even Oil is back to -1.1%
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9.00am.. With 'bad news is good news'... sp +5pts... 2113...  a mere 1.1% from a new historic high.

Barring an opening reversal.. this is starting to look ugly for the equity bears... as USD rapidly cools.
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9.33am.. shaky opening gains..... eyes sharp for reversal candles......

9.35am.. black-fail candles appearing all over the place..

notable weakness: INTC -0.3%.... not looking pretty.


9.45am.. CHICAGO PMI 54.7.... a clear beat.... and out of recessionary territory.

Now the market will be concerned about rate rises again, lol

The Mighty Dow is weak

The Dow is weak, and this is increasingly apparent on the giant monthly cycle. Despite a marginal new historic high of 18351 in May, the Dow has effectively been flat lining since February. A Friday/July close under the monthly 10MA - currently @ 17733 would offer another indication of 'trouble into the early autumn'.


Dow, monthly'2

Dow, weekly'1b

Summary

A fifth consecutive blue candle on the giant monthly 'rainbow' chart... with price action looking like a flat top.

I will be looking for a monthly close <17733 at the Friday close.

As for the weekly chart, despite the current net weekly gain, we did see a break of trend on Monday, and for now... the closing weekly candle will result in a lower high.. and a lower low.


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Looking ahead

Friday will see Employment cost, Chicago PMI, and consumer sentiment.

*since it will be a weekly and monthly close, expect increasing vol' in the afternoon. As is generally the case, higher vol'.. will very likely equate to lower prices.
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Somewhat less cautious

Today, after some further consideration, I picked up a secondary short-term trading block. I went short INTC.. which is a stock I've been bearish about since it maxed out at $35 in early June. I am increasingly seeing individual stocks with increasingly bearish price structure. As ever, I will try to trade in/out of positions as best I can, but wish to be broadly short the US market into early October.

Goodnight from London

Daily Index Cycle update

US equities closed moderately mixed, sp +0.1pts @ 2108. The two leaders - Trans/R2K, settled u/c and +0.2% respectively. Near term outlook is offering renewed side, but the equity bears really need some sustained price action under sp'2090 to offer clarity that the Wed' high of 2110 was just another marginally lower high.


sp'daily5

Dow

Summary

Suffice to say.. broadly, it was a day of moderate chop for the US indexes.

Based on the bigger weekly/monthly cycles, the US market looks increasingly vulnerable into the early autumn.
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Closing update from Riley


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a little more later...