Wednesday 26 August 2015

VIX continues to cool

With equities closing significantly higher, the VIX continued to cool, settling -15.8% @ 30.32 (intra low 28.67). The near term outlook offers a multi-day equity bounce, and that will likely equate to VIX falling to the 22/19 zone.




Little to add.

VIX looks set to cool into the low 20s, along with equities rallying for at least a few days.

more later... on the indexes

Closing Brief

US equity indexes have broken the downward trend, with the sp +72pts @ 1940 (intra low 1880). The two leaders - Trans/R2K, settled higher by a powerful 2.9% and 2.4% respectively. There is clarity in the near term, with a secure double floor of sp'1867, first target upside is the 2000 threshold.



Suffice to say... net daily gains. The collapse wave from last Wednesday afternoon (2096), has concluded with a double floor of 1867.

So.. 6 days... 229pts.

Now that a floor appears secure... how high a bounce?

Best guess.. upside to at least the psy' level of 2000.

Where it gets tricky is whether the market can keep pushing into the next FOMC (Sept 17'th). If so.. then we could battle as high as the 2050/70 zone.

From there.. the bears should have a high chance at smashing the market lower into end Sept/early Oct.

The sp'1725/00 zone - a 38% retrace of the giant wave from Oct'2011 (1074/2134), is target.

more later... on the VIX

3pm update - net daily gains

Unlike yesterday's train wreck closing hour, US equities are set to close with significant gains. Equity bulls should be seeking a daily close above the hourly 10MA - currently @ 1905. The VIX looks vulnerable to losing the 30s. There is notable weakness in the metals, Gold -$12, with Silver -3.5%


GLD, daily


Well, its been a rather incredible six trading days.. but it seems fair to say we have a secure double floor of sp'1867.

The issue now is whether the rally will last just a few days... rolling lower into end month (Monday)... or can keep going all the way into the next FOMC (Sept 17'th).

Considering the price action of the past few years, an overly high and extended bounce/rally into mid Sept' looks viable.

Targets.. Primary sp'2000
Secondary.. 2050/70 zone.. where there are an absolute truck load of aspects of resistance.

On no reasonable outlook does sustained action >2080 look viable for some months.

*I will hold long-AAPL overnight... unless there is some bizarre spike higher in the closing hour to the $110s.

3.05pm... It is notable that the hourly upper bollinger has stopped falling, and is now around 1950s... that will be a valid target for tomorrow.

3.11pm.. HUGE waves of buying... over and over...

Mainstream starting to catch on.... we have a floor... we're headed higher.

3.12pm.. sp'1930s...  monstrous short-stop cascade underway.. as bears are being kicked out....

This will make for one of the bigger net daily gains... EVER.

VIX set to lose the 30s.. into the close.

2pm update - a secure double floor of 1867

US equities have seen further swings into the early afternoon, and it appears the market has secured a double floor of sp'1867. First upside is the rapidly declining hourly upper bollinger... currently @ 1965. VIX is confirming the equity floor.. -9% in the 32s. A daily close under the 30 threshold is viable.




I've seen more than enough.. I'm calling a double floor of sp'1867.

*I remain long-AAPL... seeking an initial exit in the 110s.

I would normally be very content to add to my existing position, however, as things are, I have little interest in committing any additional funds on the bullish side. I'll stick with what I have... and try to trade in/out of AAPL across the next week or two.

Indeed, I'm increasingly starting to wonder if the market will manage to broadly battle higher all the way into the next FOMC (Sept' 17th).

From there... well, then it gets serious.

stay tuned.

1pm update - teasing the bears?

US equities have continued to slip.. if slowly, for another hour.. with a new intra low of sp'1881. The smaller 15min cycle is offering a bullish signal on a daily close above 1890. Equity bulls can't be confident until some sustained action above the hourly 10MA.. currently @ 1909.




For now... there is little to add.. as the market continues to battle to hold the double floor.

Price action feels like the day after a war.... bears clearly won.. with a collapse wave from 2096 (last Wed' afternoon).. to 1867.

Yet we're still due a sig' multi-day bounce.

notable weakness, Gold -$14, with the miners following, GDX -4.8% in the $12s.

1.02pm.. Market breaking upward...   sp'1896.....   VIX cooling -6%... 33s.

1.36pm.. 15min cycle.. offering a provisional BREAK UP....

12pm update - struggling, but holding the double floor

US equities are still seeing some significant weakness as every micro rally is being sold into. Right now, equity bulls need a break above near term declining resistance, which as at 12pm is sp'1910... and which will be 1890 at the close. The hourly 10MA @ 1915.. is similarly a key target for the bulls to break/hold above.




Without question... it remains a somewhat borderline situation, but unlike yesterday, I don't see an insane closing hour collapse wave.

The smaller 15min cycle is offering price structure of a narrowing bullish wedge.. with a viable break upward into the close.

Overall price structure looks bullish.. at least for a few days. 

*I remain long-AAPL, which is marginally frustrating in the 106/105s. A daily close in the 107s would be a start.. and offer 110s tomorrow. I'll be holding overnight.

The sun has finally come out in London city, after earlier floods blocked the freeway.

time for tea.

11am update - the swings continue

The significant swings continue, with the market having cooled from an opening high of sp'1914 to 1889. Despite another wave of weakness, the market has an increasingly secure double floor of 1867. A break to the low 1800s looks very unlikely until the latter half of September.



*Dudley has given the market a few things to consider, and it leans on the 'no rate hikes this September' side of the fence.

Well... we still have a long afternoon ahead... one which will seemingly see a break to the upside (above resistance of the hourly 10MA).. or renewed weakness.

I'm guessing UP.

I've eyes on AAPL... naturally... although with the morning weakness, an exit in the 110s looks out of range today.

time for lunch, back soon..

10am update - it remains wild west trading

US equities open significantly higher, with an early high of sp'1914. Equity bulls should be battling for a break above the 3pm candle high... with a daily close in the 1930s. That will not be easy though, as trading conditions remains very unstable... with some traders clearly selling into every up wave.




So.. another strongly positive open, with VIX -9%.. set to lose the 30s.

I'm guessing we hold the gains... unlike yesterday's closing hour train wreck. VERY long day ahead.

I've my eyes on AAPL... seeking an exit in the 110/111s.

Special note..


Note the MACD (blue bar histogram) cycle.. its levelling out.... with a lot of potencial upside in the days ahead.

However, even if go STRAIGHT UP from here... there will be no bullish cross for at least another 5-7 trading days.

10.06am.. You can see here why I am seeking AAPL 110/111.

Thats a valid target in the immediate term... would make for a reasonable exit.

10.21am... sp +22pts @ 1890... already a 24pt downward swing.... washing another tranche of bulls.

Well...its getting messy again....

VIX now only -3% in the 34s.    Remarkable that VIX 30s are now being sustainably held.

Clear resistance.. hourly 10MA @ 1914

10.32am.. something for the oil bulls.... EIA report... -5.5 million barrels.

10.35am.. ohh lookie.. here he is...

Dudley... helping kick the market higher with more anti-rate hike chatter.

Pre-Market Brief

Good morning. US equity futures are strongly higher, sp +48pts, we're set to open at 1915. The market is clearly attempting to put in a double floor of sp'1867. A net daily gain would set up a broad run back to sp'2000... perhaps 2050/70... before the next collapse wave.



Here we go again, with another opening powerful rally attempt. Will this one hold? I am guessing... YES.

We have a clear double floor on the sp'500.. with other indexes putting in marginally higher lows.

If we do close significantly net higher today.. it should solidify a short term floor.. and clarify we'll be battling upward into end month.

As it is... we'll probably see continued (if lessening) intraday swings... on the way up.

For me, the only issue is whether a bounce gets stuck around sp'2000, or if we'll somehow get to the 2050/70 zone - back testing the old broken 200dma.

early movers..

AAPL +2.7% in the $106s
BAC +3.2%
NFLX +4.7% @ $106s

SDRL +11%.... perhaps catching some interest after SLB is buying Cameron (CAM)

Update from Oscar

Ironically, I think Oscar is now overly bearish... at least in the short term.

Doomer chat, Hunter with Sinclair

I continue to think Sinclair - with the other 'gold promoters' remain in complete denial. They have been calling for upside for four solid years. Now they think Gold has floored at $1071. Err.. no. Gold looks headed for $1000, if not the $900/875 zone... as USD still looks on track for breaking above DXY 100 in the coming months.

Overnight Asia markets

Japan: The Nikkei battled hard across the day settling +3.2% @ 18376

China: The Shanghai comp' opened positive, tried to clear 3000, FAILED, fell into the lunch break. After another upside swing, settling -1.3% @ 2927.

*lets not forget, we have Durable Goods orders (8.30am)... and Fed official Dudley is speaking this morning. Mr Market will be listening!

Have a good Wednesday

8.30am.. Durable Goods: +2.0%    ex-trains, +0.6%.   both much better than expected.
sp +45pts     1912

8.35am.  sp +50pts... thats 1917.

First key target is the Monday high of 1948.. but hell.. even I don't think that is possible today!

8.46am.. sp +54pts... 1921.......

Anyone think yesterday's high could be broken above on a hyper short-stop cascade?

8.56am.. clown comment of the week.. perhaps year...

Cramer '...the market doesn't work right anymore'.

Yeah... sure it doesn't.. having actually fallen below key support last week.

Hell, maybe its time for another Tim Cook letter?

9.02am... notable weakness, Gold -$12... and that is dragging the miners lower, GDX -1.4%

Where is your Gold @ $50000 Mr Sinclair ?

9.26am.. A daily close in the 1930s looks to be more realistic case... but hey... its 'wild west' trading conditions.

notable weakness, bonds, TLT -1.1% in the 122s.. a long way below the recent 128 high.

9.35am.. If I can drop AAPL-long in the 110/111s... I'll take it today.   Currently.. 108s

9.43am.. Wild west trading.... black-fail candles appearing... but still... lets see where we are at 10am...

 VIX -9%... sub 30 would be a bullish equity sign this morning

Another wild day

It was another wild and crazy day in the US equity market, with the sp'500 opening powerfully higher to an afternoon high of 1948, only to then see a severe collapse into the close. Despite the net daily declines, a bounce is still due, but from a double low of 1867... or 1820s?


China' daily

Japan, monthly


re: US market - today's closing hour was unquestionably a total FAIL for the bull maniacs. The daily close is offering a 'hope' of a double floor of sp'1867, but it won't take more than a slight nudge under to spiral things lower across Wed' morning.

Primary target would be the Oct' low of 1820.

However, regardless of another day or two downside... we're due a major bounce.. one that - unlike today, will be sustained for some days.. perhaps even a few weeks... into the next FOMC of Sept'17th.

re: China

With the loss of the 3000 threshold, further core technical damage has been done. Yes, the PBOC have acted, and that will surely kick the China/Asian markets higher for at least some days, but broadly... the Shanghai comp' looks set for downside to around 2500.

I suppose a full retrace of the summer 2014-2015 ramp could occur... back to the 2000 threshold, but right now, I'd guess.. no.

re: Japan. The monthly candle is looking real ugly... and there is viable downside to 16500 in the immediate term. However, with the PBOC taking action, perhaps it will be enough to halt the current decline.. and bounce into September.

Update from Walker

For those with an hour to spare... worth some consideration

Looking ahead

The only data of note is Durable Goods Orders.

*Fed official Dudley is speaking on the regional economy in the morning... maybe a few comments on int' rates might appear.


Eyes on the futures

With the closing hour train wreck, the US market is now sitting on the edge of another cliff. Of course, the PBOC have now taken action, and if China.. along with other Asia markets can rally overnight.. then there is high risk to the bears that US equities will resume higher tomorrow.. and sustainability so.

My best guess.. .we push back upward. However, my 3pm post was titled 'upside into the close'... so maybe you can dismiss my best guess for tomorrow.

*thanks for the emails/messages today... always good to hear from you.

Goodnight from London

Daily Index Cycle update

US equity indexes saw a severe late day downside reversal, sp -25pts @ 1867 (intra high 1948). The two leaders - Trans/R2K, settled lower by -1.7% and -0.7% respectively. Near term outlook is very borderline.. if 1867 fails on Wednesday, downside to 1820... otherwise... renewed upside to 2000.




With the closing hour an unquestionable train wreck, the door is now open to another day or so of downside.. at least to the Oct' low of sp'1820.

From a pure cyclical perspective, the daily MACD cycle is on the extremely low end.. and there is the constant threat of a sustained and powerful rally.... one that (unlike today).. will hold.

*I hold moderately long overnight (via AAPL), would consider adding... if sp'1820s.

a little more later...