With equities seeing a sharp downside reversal in the afternoon, the VIX saw some distinct upside recovery, settling +0.6% @ 23.62. Near term outlook is for a break under sp'1900... and if sp'1867... that should equate to VIX 30.
VIX'60min
VIX'daily3
VIX'weekly
Summary
*a net weekly gain of 6.0%
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The opening hourly candle was a classic reversal, and was certainly confirmed via the net daily decline. Indeed, with the weekly close in the 23s.. the VIX bulls can look forward to the upper 20s.. even 30 threshold next Mon/Tuesday.
A bigger issue will be for some divergence between an equity lower low (<sp'1867).. but with a lower high in the VIX.
Anyway.. first things first.. lets see if <sp'1900.. and that should take the VIX back into the 30s.
*I am holding a VIX-long position from the 23.40s.. seeking an exit in the 28/30 zone... on Mon/Tuesday.
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more later... on the indexes
US equities closed distinctly weak, sp -0.9pts @ 1931 (intra high 1952). The two leaders - Trans/R2K, settled +0.9% and -1.3% respectively. With the Friday afternoon reversal, the hourly/daily cycles are set up particularly bearish for the Monday open... the door remains open to 1867.. and then 1820 by end of next week.
sp'60min
Summary
*closing hour price action: pretty fierce... as the market battled it out.. not least as some are still clinging to the notion of upside to the 200dma.
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... a pretty wild end to the week...
Suffice to say... equity bears should be very relieved. I sure am.
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*I am holding across the weekend.. short-SPY, long-VIX
Have a good weekend
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*the usual bits and pieces across the evening to wrap up the day...
US equities have seen a rather fierce snap lower in the 2pm hour, with the sp' cooling from an intra high of 1952 to 1927. VIX is seeing a mini explosion to the 23s... the 24s now look viable by the close. The broader trend remains bearish.. and today has now become a 100% FAIL for the bull maniacs.
sp'60min
vix'daily2
Summary
*a VERY notable second green candle on the daily VIX chart
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Frankly.. this is not just very pleasing to see... but pretty funny too.
The pre-market gains were utter nonsense... and here we are... RED indexes.... with sig' net weekly declines for most indexes (Dow is the exception).
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Update from Riley
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updates in the close..................
3.01pm.. some buyers come in (or bears covering?)... sp'1932.. back to flat...
Regardless, some rather powerful tech' damage has been done to the rally from yesterday.
ANY daily close in the 1920s would give strong bearish clarity for Monday.
*underlying hourly MACD cycle is set to turn neg' Monday morning... momentum IS swinging back toward the bears.
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3.04pm. R2K continues to lead the way lower... -1.2%... a pretty powerful reversal.
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3.10pm.. First downside target is the hourly lower bol @ 1910... next to the Thurs' low.
After that... a straight run to the 1867 low.
Door is clearly opening to the Oct' 2014 low of 1820.... first things first though... the weekly close!
3.13pm.. First upside target is VIX 25... viable by the close.... then 30.. for Monday.
3.16pm.. What a beautiful end to the week..... the BEARS are back in control.. on ALL cycles.
VIX headed for 25...
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3.23pm.. One thing is for sure.. the previous 4-5 hours weren't making a baby bull flag.
Weakness into the close... eyes on the VIX.
*as things are.. I remain SHORT-spy... LONG-VIX.... currently intending to hold across the weekend.
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3.29pm.. a rather wild spike from 1922 to 1931.. with VIX back in the 23s... Hmm.
Broadly though.. the damage has been done this afternoon... the daily/weekly cycles continue to offer much lower levels next Monday... lead lower by the R2K, currently -1.4%
3.35pm.. The battle is raging... as bears are screaming for a daily close in the 1920s... bulls will be lucky to see 1930s... STILL a net daily decline.
VIX 23.30s... having cooled... renewed upside into the close... probable.
US equities break a marginal new intra high of sp'1952. VIX remains under downward pressure.. not least as the weekend looms, -6% in the 21.90s. As things are, the sp'500 is still set for a second consecutive minor net weekly decline.
sp'60min
vix'60min
Summary
Little to add... as the week is soon to wrap.
notable weakness:
CHK -6%.. as energy sector remains under pressure.
CNX -4%... coal miners... just keep on digging to the centre of the Earth.
SDRL -2%... new multi-year low of $6.01... cooling Oil is not helping.
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Here in the city...
Chilly autumnal sunshine
Moon rise
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2.22pm.. sp' 1940.. with VIX 22.30s.... kinda interesting.....
A net daily decline sure would be something to end the week.
2.24pm.. Looks like something hit the big EXIT into the weekend button.
VIX is jumping... 22.50s.
notable weakness in the R2K index, -0.8%.... almost a sig' decline !
2.33pm.. Things really are starting to get real interesting.... most indexes turning red.... VIX now threatening 23s
KEY BREAK of hourly 10MA..... ohh, look at those bulls run!
2.41pm.. Its getting a little exciting, R2K leading the way, -1.0%
sp'1934... with VIX set for the 23s.
2.43pm.. sp'500... turns RED.. .... pretty incredible to see..... now can we close red?
US equity indexes continue to battle it out, with continued threat of cooling into the sp'1930s..with VIX 23s. As things are... most equity indexes are still on track for net weekly declines (<sp'1958). Gold remains notably weak, -$7. Oil has lost most of the early gains, now +0.5%.
sp'60min
VIX'60min
Summary
Hourly equity cycle is offering a baby bull flag, and to me.. that is now the major threat to those holding short across the weekend.
Even if we cool to the sp'1930s this afternoon, there will remain risk we'll see further upside on Monday to the 1960s.. and keep on going for a few weeks to the 200dma - which by mid Oct' will be in the 2050s.
For now... that remains my key concern.
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Meanwhile... today's price action feels like being on the SS Bear.... which has a rather significant hull breach.
US equities are holding moderate gains, but there remains increasing threat of a return to the sp'1930s this afternoon, along with VIX 23s. The rest of the day will offer a major hint of what is ahead next week... whether renewed weakness.. or a straight run to the 200dma in the 2060s.
sp'60min
sp'daily5
Summary
The ultimate issue now is whether 1908 is a key low... that will last into mid Oct'.... or if its just a brief tease to the bulls.
Other than sheer technical reasons, today's rally is pure nonsense... I sure won't take any long positions right now.
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The US equity market is rather fiercely battling it out in the sp'1945/50 zone, with VIX remaining moderately lower in the 22/21s. USD is holding gains of 0.4% in the DXY 96.30s. Metals remain weak, Gold -$8. Oil is +1.4% in the $45s.
sp'60min
VIX'daily2
Summary
*I am looking for a closing green candle on the VIX 'rainbow' chart.
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So... what now? Its the typical morning turn time of 11am... bulls will be vulnerable for the next 3 hours or so. A foray into the sp'1930s looks a given by 1pm... but the real issue is whether we see a secondary wave higher to >1955... or instead.. close moderately lower.
A red close would be particularly bearish.. considering the broader price structure...
The bull maniacs need a close >1958 for a net weekly gain... that doesn't look as easy as it did in pre-market.
US equities open with borderline significant gains.. to sp'1949, but there are some signs that the rally is not sustainable. The micro 5/15min cycles are clearly over stretched, and there is threat the main indexes will close net lower. Broadly.. bears should be seeking a weekly close <1958.. preferably 1950.
sp'60min
VIX'60min
Summary
*a clear opening reversal candle in the VIX.
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We have a long day ahead... if the bulls fail to hold any gains today.. it will be yet another reminder of the broader weekly/monthly cycles which are unquestionably broken.
*I remain moderately short.. with ZERO interest in switching long.
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time for an early lunch... back soon.
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10.19am.. VIX -6%... back in the 22s. Things are getting real interesting.. .with sp' 1944
We'll no doubt get a down cycle into the afternoon.
... the 1930s look due... which would really spook many.
Good morning. Futures are sharply higher, sp +22pts, we're set to open at 1954. USD continues to climb, +0.4% in the DXY 96.40s. Metals are cooling, Gold -$8, whilst Oil is a touch higher in the $45s.
sp'60min
sp'weekly
Summary
So.. what is the reason for the overnight ramp? Other than technical reasons, there is ZERO reason why this market should be able to keep pushing higher into next week.
I realise some out there are calling for a straight run to the 200dma in the 2070/60s... but to me, that seems ludicrous... considering the broken weekly/monthly cycles.
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We will have climbed from 1908 to the 1950s.. over 2% in just 5 trading hours.
*Equity bears should be fighting to see a weekly close <1958... to maintain at least some degree of net weekly decline.
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Yours truly is half short of what I held at the Thursday open. Even so, this is going to be a painful open. I will likely hold across the weekend... I ain't closing out in the 1950/60s... only to see the market fall again next week.
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Overnight Asia action...
Japan: a pretty wild session, settling +1.8% @ 17880
China: showing signs of unraveling, settling -1.6% @ 3092. Sub 3k looks probable next week.
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Have a good Friday... if you can.
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8.50am.. sp +19pts... equating to 1951.
notable weakness, Gold -$9... with the miners ETF of GDX -2.4%
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9.35am.. Opening reversal candle in the VIX from 20.81. sp'1946...
As things are... I won't be content unless a daily close <1945.. with VIX 21/22s.
It was a rather dynamic day in the US equity market, with the sp' seeing a morning low of 1908, and then seeing a somewhat natural latter day bounce to settle at 1932. The broader trend remains increasingly bearish, with all US indexes set for net weekly declines.
sp'weekly1b
sp'weekly6
Summary
*weekly 'rainbow' candle was red in the early morning with sp'1925. A weekly close with a red candle would be something I'd like to see.
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Little to add.
The broader down trend from the FOMC high of sp'2020 continues, despite some rather powerful intraday rallies.. as seen today (1908-1937).
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Looking ahead
Friday will see Q2 GDP (2nd rev), market is expecting 3.7%.
Other data: PMI serv', consumer sent'
*Fed officials Bullard and George are due to speak... Mr Market will be listening.
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Disturbing viewing
The moderately anticipated Yellen speech at Amherst was largely as expected.. well, until the last 5 minutes or so when things started to turn outright disturbing.
Frankly, it increasingly looked as though Yellen was going to keel over.. and worse. I am largely contemptuous of much of her monetary policies, but I sure don't want to see someone die at the lectern. Let us not forget, 'Aunt Janet' (are you out there Oscar?) is 69 years of age.. well past any reasonable retirement. It would be very understandable if the pressure is getting to her.
Anyway... besides the speech drama, the notion of the Fed raising rates in Oct... or even at the Christmas FOMC seems like crazy talk to me. Hell, if the sp' is in the 1800s next week... mainstream talk will then swing to QE4. After all, Q1, 2, and 3 solved the macro-economic problems, why not do another one? Hell, why not just announce QE4, 5... all the way to 10 in one press release?
US equity indexes closed weak, sp -6pts @ 1932 (intra
range 1908/37). The two leaders - Trans/R2K, settled lower by -1.0%
and -0.2% respectively. Near term outlook is for continued equity
downside.. to test the 1900 threshold... and break through... to 1820 by
next Thurs/Friday.
sp'daily5
Trans
Summary
Little to add.
Trans remains headed for 7000, with sp' set for the mid/low 1800s.. in the very near term.
