Tuesday 29 September 2015

VIX cools a little

With equity indexes closing moderately mixed, the VIX cooled a little, settling -2.9% @ 26.83 (intra high 28.20). Near term outlook offers further equity downside to sp'1820, and that would likely equate to VIX in the 33/35 zone.




Not much to note.

The daily closing candle was a reversal doji candle. First upside target is the 29/30 zone.. that looks probable on any initial break of sp'1867.

If sp'1830/20... then VIX will be in the mid 30s.

*I am long VIX from 26.98.. seeking an exit in the 30s

more later... on the indexes

Closing Brief

US equities settled moderately mixed, but well below their morning highs, sp +2pts @ 1884 (intra range 1899/1871). The two leaders - Trans/R2K, settled +0.3% and -0.6% respectively. Near term outlook is for further downside to at least sp'1820.




*closing hour action: broadly weak.. with a rather 'dumb ramp' into the close. Overall.. nothing for equity bears to concerned about.

To those concerned the sp'500 will manage to hold the Aug'24/25th low of 1867... I merely refer you to the R2K chart (see 8pm post).

The R2K has already broken well below the Aug' low of 1100.. and it is headed for the Oct' 2014 low of 1040.. equating to sp'1820.

So... early gains.. a lot of chop.. but distinct weakness into the close. Frankly.. bulls should be very concerned about the threat of a giant Wed' lower.. under sp'1867.

*I hold short AAPL, DIS, GE, DAL, and long VIX. Seeking a first exit in the sp'1825/20 zone.

more later on the VIX

3pm update - positioned for day 10

Regardless of the exact close, there remains a distinct underlying downward pressure in the US equity market. Further, there is clearly no sign of any panic.. and we're 4% (at minimum) from any kind of market capitulation. There remains a significant threat that sp'1820 will not hold this Thursday.




*I am short DIS, AAPL, GE, DAL, and long-VIX.  Will hold overnight

Price structure on the small 15min cycle is a bearish pennant

So.. lets see how we close...  frankly anything in the 1870s would be a bonus.

*Today was day'9... in theory.. days 10 and 11 should see rather powerful net daily declines.

3.10pm... New intra low .. sp'1875 .. with VIX 27.50s.

For those holding short overnight.. this is a good lead into tomorrow morning.

3.24pm.. sp' 1874... VIX 27.80s.. its all rather good :)

3.38pm.. a bounce from 1872 to 1880....    bears covering.. .it can't possibly be buyers at this level/time.

Regardless... rally FAILED... the setup into tomorrow remains bearish.

notable weakness: AAPL -3.5% in the $108s.

2pm update - time for a rollover

US equities have seen a secondary wave higher.. and are likely to rollover from current levels into the close. Regardless of the exact close though... tomorrow (day'10)... will offer a straight gap lower... possibly under the Aug' low of 1867. if so.. then 1820 is viable tomorrow.




Its starting to get rather exciting.

A viable top in the 1900/1905 zone..around the typical turn time of 2.30pm.

..standing by....


2.07pm.. SHORT-DIS.....   .. as the main market is looking like it is done.

2.09pm... SHORT-AAPL

2.15pm.. LONG-VIX

Market offering another micro up wave.. but its all small moves anyway.

2.29pm.. Market attempting another micro up cycle.. but broadly... price action is weak...

*I'm looking to pick another few short-positions before the close.

2.32pm.. SHORT-GE .. with sp'1886

2.38pm.. SHORT-DAL, with sp'1885

2.40pm... Will hold 5 short-market positions overnight... seeking a first exit at sp'1820.

1pm update - another hour

US equities have seen some considerable chop with indexes briefly turning red. The smaller 5/15min cycles continue to offer another wave higher into the 2pm hour... with a marginal higher high in the 1900/1905 zone.. along with VIX 25s.




Current price action is increasingly messy.. but still..

...for now... I have ZERO interest in chasing this lower whilst there remains high threat of upside into the 2pm hour.

Can we see things max out at sp'1905 at 2.30pm precisely? Is that asking too much ?


12pm update - almost there

US equities remain moderately higher. An ABC bounce appears still in progress.. with the market likely to max out sometime from 12pm onward.. in the sp'1900/1905 zone. Sustained action >1910 looks extremely unlikely.. as the daily/weekly cycles continue to warn of a mini crash in the immediate term.




*I remain on standby, seeking a heavy reshort in the 12-2pm time frame.. .with sp'1900/1905, and VIX 25s

Frankly.. its playing out so far okay...  market teasing those bears getting overly excited at the open... and on the minor cooling after 11am.

A C wave peak around 1pm... or so.. would be fine.

VIX update from Mr T.


Sunshine helps... even if its a chilly sun

time for tea.. or something stronger

12.23pm.. STILL on track...


11am update - ABC, 123, XYZ, or whatever

US equities are seeing some notable bounce gains. Whether you want to call it an ABC, 123, XYZ, or whatever retrace/bounce... the broader trend remains increasingly bearish. A crash wave remains very viable across the next 2-3 days.




*I am seeking some kind of bear flag to develop... via an ABC wave set

I am trying to remain patient and not get lost in the minor price noise.. which is hard when I'm staring at the 5/15min cycles for hours on end !

Currently on the sidelines... but targets are locked on.

time for some sunshine in the park (or I'll go crazyyyyyyyyy)... back at 12pm

11.40am.. back...   market battling to complete a B wave....   C looks ON TRACK to 1900/1905.

10am update - opening chop

US equities open with some moderate mixed chop, breaking a new cycle low of sp'1876. From a pure cyclical perspective, the market should manage to claw higher, and that might take until 2pm to max out. Broadly though, any such bounce is just that... a bounce.




*I will certainly wish to be heavy short by the end of today. For now though... I don't see a hurry.. not least as the 1900 threshold remains a very natural level to test today.

So, minor chop to start the day... all things considered, a bounce STILL looks due. Right now.. that looks likely to take us into the afternoon, rather than max out by 11am.

For now then.. I am content to wait until at least 1pm.

time for an early lunch... back soon

10.14am.. BACK :)

So.. we've already hit 1892...  not far off target zone.

The issue is time.. 11am.. or does this drag out into the afternoon?

I'd guess... 1/2pm.... but... if we're 1900/1905 by 11am.. I'll be sorely tempted.

10.18am.. short-stop cascade underway.. bears on the run.... sp'1894.  VIX holding up rather well @ 26.66

10.28am.. Considering we broke a new cycle low at the open... the clock for a bounce was reset... I don't see a bounce being completed within 90mins... 11am.

So... I am HIGHLY inclined to wait.

Best guess... first wave completes around 11am... minor retrace to 12pm... secondary UP to 2pm

From there... DOWN.

10.31am... something like this.......


Pre-Market Brief

Good morning.. and welcome to day'9 of a collapse wave. US equity futures are moderately higher, sp +10pts, we're set to open at 1891. There looks to be viable upside to the 1900/1910 zone before renewed downside. Primary target 1820, secondary 1750/25 zone by the Thursday close.




*it is notable that the month is set to end on a low... possibly in the 1830/1790 zone.

So... we're set for opening gains.  A bounce into 11am looks very viable.. before resuming lower.

I would be surprised if we hold up into 2pm.... but its possible.

In any case... I see any such bounce one to be shorted.

Overnight Asia action...

Japan: Nikkei slammed, -4.0% @ 16930.... first level is 16400... then 14000.

China: Shanghai comp' -2.0% @ 3038.... again, holding the 3K threshold... but that will likely fail this Wed.

Have a good Tuesday

8.25am.. sp +12pts... 1893.. with a bit of a short-stop cascade.. should see 1905/10 by 11am.

From there, I'm likely hitting buttons.

9.17am.. sp +7pts.. 1888. The 1900 threshold still looks viable by 11am

notable early weakness, TVIX -4%

Today was day 8

US equities were unable to hold the key sp'1900 threshold, and with the R2K breaking the Aug' low of 1100, the door is wide open to a mini crash wave later this week. Prime target is sp'1820, if that fails to hold, next support is not until the 1750/25 zone.




re: Chart daily5d

For those who have occasionally studied previous major down waves, they should be well aware that such waves generally last no longer than 11/12 trading days.

On FOMC day - where we saw a net daily decline (with a clear spike top @ sp'2020).. I began a crash wave count.

With the break <sp'1900, I'm now quite content to openly highlight that today was day'8.

Typically, in many collapse waves, days 8, 9, and 10 will see powerful net daily declines.

Here is an example... from Aug'2011...

It is notable that in the case of the 2011 decline, day'9 saw a rather bullish net daily gain. Certainly, there can be positive daily closes within a powerful down trend.

More importantly though, day 11 and/or 12 will be a viable crash day. So, this Thursday/Friday I'll be on standby for a mini-crash.

There are other 'issues' surrounding the current time frame.. but for today.. I'll leave it at that.

Looking ahead

Tuesday will see Case Shiller HPI and Consumer confidence.

Update from Oscar


Seeking to jump back aboard the short-train

Overnight Sunday futures certainly spooked me out of my two short-market positions at the Monday open. Regardless, a net gain is a net gain, so I shall refrain from whining. At least I'm not long, right?

Strategy/plan for Tuesday

If we open Tuesday lower... I will NOT chase lower. There will be high threat that buyers will flood in around sp'1867. This would be ironic of course because the R2K has already decisively broken the equiv' level earlier today. I would wait until the 2pm hour for a bounce.

If we open higher tomorrow, and see the 5/15min cycles get on the high side - sp'1900/1910 by 11am.. I will launch multiple market shorts. At the very least: SPY-short, VIX-long. I'll also consider a number of individual stock shorts, such as DIS, F.

My best guess is that we shall see a market capitulation this Thursday or Friday. Frankly, sp'1820 looks an easy target... it would not surprise me to see a brief washout to the sp'1750/25 zone.

Tomorrow is day'9, and I'm sure it will not be dull :)

Goodnight from London

Daily Index Cycle update

US equities closed significantly lower, sp -49pts at 1881 (intra low 1879). The two leaders - Trans/R2K, settled lower by -2.2% and -2.9% respectively. Near term outlook offers a brief bounce to the 1900/1910 zone.. before very high likelihood of a move to sp'1820 by Thurs/Friday.




Most notable aspect of the day... the R2K, which has taken out the Aug' low of 1100... and is now on a fast path to the Oct'2014 low of 1040.

R2K @ 1040 would equate to sp'1820.. both of which seem due some time between Wed-Friday.

a little more later...