VIX unable to hold the 17s

With equities seeing a significant rebound from the morning low of sp'2070, to close at 2089, the VIX cooled from an intra high of 17.21, settling +2.0% @ 15.93. Near term outlook is for further equity upside.. into the sp'2100s.. and to new historic highs >2134.


VIX'60min

VIX'daily3

Summary

Suffice to note, VIX maxed out at declining resistance/trend... with the market flooring at sp'2070.

Even if VIX falls under 13 by the next FOMC... there is seemingly high chance of a brief spike to the 20 threshold.. before renewed cooling into January.

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*I have ZERO interest in being long volatility until late spring 2016.. at the earliest.

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more later... on the indexes

Closing Brief

US equity indexes closed moderately mixed, sp +2pts @ 2089 (intra low 2070). The two leaders - Trans/R2K, settled -0.6% and +0.7% respectively. Near term outlook is for renewed upside into the 2100s... and to new historic highs >2134.


sp'60min

Summary

*closing hour action: mostly micro chop, but with a new intra high of 2094... 1.2% above the morning low.
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... and another wacky ride in the casino comes to a close.



I do understand why some will be utterly bemused at this mornings turn around. After all, what was the good news?

Mostly.. it was cyclical, as the smaller 5/15/60min equity cycles were on the very low side. 2070 was the 50% retrace of the recent wave from 2045/97.

This market is headed higher.... although maybe there is no way of knowing where the market is rowing?

The danger must be growing.. for the algo-bots keep on buying....
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more later... on the VIX

3pm update - a floor of 2070

Regardless of the exact close, it would seem the market has put in another higher low @ sp'2070.. with VIX having maxed out at 17.21. The sp'2100s look due.. whether tomorrow, Friday... or next week. Oil is holding sig' gains of 2.4% in the upper $42s... ahead of the next inventory reports.


sp'60min

VIX'60min

Summary

*I only noticed it earlier, but the VIX effectively maxed out around declining resistance/trend. Sub-teens look due... although I am very open to a test of the 20 threshold before year end.. and that does not exclude my year end target of sp'2150/70.
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So..  a little chop in the 2pm hour... with news of another hostage situation in northern France.

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Anyone still think we'll see sustained trading under sp'2060 in the remainder of the year?

If we break >2134 - which seems VERY likely, you can arguably add another 5% to that.. so that gives us the 2240/60s in Jan/Feb... before the next moderate retrace.

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back at the close... unless something dramatic happens

2pm update - significant recovery

US equities have seen a significant recovery from the morning low of sp'2070... back into the 2090s, and it is notable that we're just 2% shy of a new historic high. Oil is holding sig' gains of 2.3%, and that is certainly helping the broader market.


sp'daily5

USO'daily2

Summary

*the daily sp'500 candle is particularly bullish, with a clear spike from the 50% fib' retrace of 2070.

Frankly.. it bodes especially bad for the equity bears.. as the 2100s are now within reach even before the Thanksgiving break.
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Regardless of whether we close net higher.. or a little lower... today has been another example of the underlying upward pressure in this market.

I would dare say.. if you don't get it by now... after all these years...
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notable strength

CREE +2.8%.. in the $27s

miners, GDX +3.5%.. as Gold +$6

oil/gas drillers, RIG +4.2%... as Oil looks set to climb into early December.

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back at 3pm

1pm update - choppy around flat

US equity indexes are seeing some distinct chop as most indexes are trading close to flat... a rather impressive recovery considering the geo-political news. With the USD -0.2% in the DXY 99.60s, the metals are bouncing, Gold +$7. Oil is back to sig' gains of 2.8%.. ahead of the next pair of inventory reports.


sp'60min

Summary

I'm guessing 2070 is a key floor.. a 27pt (50%) retrace of the move from 2045/2097.

I do NOT expect sustained action <2060 for the rest of the year. Ongoing style of price action simply suggest otherwise.

It remains merely a case of whether we settle November, a little above... or below the sp'2100 threshold. In either case.. equity bears have little business in considering anything short.. and that even includes Oil... which looks vulnerable to upside into December.

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notable strength...

CREE, daily

CREE opened -1%... but swiftly recovered.. and looks headed for the 200dma.. in the rather obvious price gap zone of 29/30.

yours... a fan of light bulbs. 

12pm update - strong bounce from 2070

US equities have naturally seen a floor of sp'2070 around the typical turn time of 11am. Whether you want to call it 'PPT/CB meddling' (ahead of Obama/Hollande press conf').. or a mere natural bounce.... it would seem the retrace ahead of the holiday is probably complete.


sp'60min

Summary

Well, I'd expected a bounce from 11am onward.. but not this strong. This is frankly a little crazy.

I rarely mention it.. but with a VERY sig' press conf' due with King O' and his anti-monarchyness.. Hollande, were 'they' meddling a little earlier to make things better?

Regardless... green indexes are clearly possible... although I'd guess a slightly neg' close in the 2080/75 zone.
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notable strength

CREE +2.3%, everyone needs light bulbs, right?
RIG +3.2%..  with Oil rebuilding gains of +2.8%

CHK +6.8%...  offering a pretty well defined floor.. at least for the short term.

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Here in London city...

Not a day to venture outside.. its pretty horrible... 4 weeks until the shortest day.
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VIX update from Mr T.



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time for tea.

11am update - equities set to floor

US equities have seen a secondary down wave after the initial bounce. The sp'500 should be able to form a floor around the 200dma (2065). VIX has built sig' gains of 10%, into the 17s. Metals have cooled from opening highs, Gold +$6. Oil is similarly catching a fear-bid, +1.8%.. but also well below the earlier high.


sp'60min

sp'daily5

Summary

There are a fair few aspects of support in the sp'2070/65 zone... and I don't expect sustained trading <2060 this week... or rest of the year.

The Turkey/Russia issue has given the market the excuse it wanted for a mini washout.. ahead of the holiday break.

For me, the only real issue is whether Nov' closes a little above...or below the sp'2100 threshold.
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notable strength

Miners, GDX +1.9%
Oil/gas drillers, RIG +0.9%
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time to cook

10am update - moderately weak

US equities open weak, with the sp'500 finding initial support around the 38% fib' retrace. There is threat of a secondary down wave later today/early Wed', but regardless... the broader trend remains bullish.


sp'60min

USO'daily2

Summary

*notable sig' strength in Oil... no doubt partly due to a cooling USD, and also a fear-bid via the Turkey/Russia situation.

Cyclically Oil is set for an up wave into early/mid December. First target is the 50dma... equiv' to WTIC @ $45s.

As ever, the next set of inventory reports will be a key determinant on Oil.
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Interesting open... but as has been the case for years.... the market will be inclined to rally.... not least as there really isn't any sig' sell side vol'.

notable movers...

 oil/gas drillers, RIG +3.1%
CREE +1.1%, seemingly headed for the 200dma... in the $29s.

CHK +4.5%... as Oil shows some upside kick

GDX +2.4%... with Gold +$8. ... broadly though.. both look set to break new multi-year lows.
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stay tuned.
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10.01am.. consumer con'  90.4....  very subdued.. relative to recent 99s.

Richmond fed... -3... nothing great there.
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sp -8pts.... choppy.... a better time for a key floor will be around 11am... as is usually the case.
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10.38am.. sp'2072..... the 200dma of 2065... within reach... before a key turn.

Sustained action <2060 continues to look extremely unlikely.... not least in holiday week.

Pre-Market Brief

Good morning. US equity futures are moderately lower on the news of Turkey shooting down a Russian military jet, sp -12pts, we're set to open at 2074. A brief foray to test the 200dma (2065) looks probable... as the market has a serious excuse to wash itself out.


sp'60min

Summary

*overnight futures low, sp -18pts, equiv' to 2070.
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So... Turkey shoots down a Russian military fighter, accusing the Russians of violating their airspace.

This is geo-political true doomster stuff. Were I in Turkey right now... I'd be on DEFCON 4, not least with Erdogan in charge.

As for equities... best guess... a washout to 2065... more viable today than tomorrow.
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Other issues...

Gold, +$10, a clear fear bid... although the lower USD is no doubt helping
Oil +1.7%.. clear geo-pol' fear related. Related oil/gas drillers are benefiting.

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awaiting GDP data..............


8.30am... Q3 GDP rev'1:  2.1%... inline...

Futures increasingly weak, sp -15pts.. .2071.

So... 2065 by late morning, and then UP.

... unless the Russians want to start shooting back.

The November closing candle

US equities started the holiday week in a naturally subdued manner, and appear to just be retracing a little. Sustained action <sp'2060 looks extremely unlikely, and it is arguably just a case of how strongly the month closes. Even if rates are raised at the Dec' FOMC, the market should be able to keep on pushing upward.


sp'monthly1b

sp'weekly2

Summary

The Oct' monthly close was a powerful one, and in many ways, very much like Oct'2011. It is also notable that Nov'2011 settled fractionally red, but from there.... the market effectively doubled across 3 years.

The 10MA is currently @ 2058/59. Any close in the 2060s would be another major victory for the bull maniacs, with a key higher low of 2019.
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Update from Oscar



The issue of the NYSE banning GTC orders (from Feb' 2016) is something I will cover another day. There are some grander issues surrounding this very disturbing change.

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Looking ahead

Tuesday will see Q3 GDP (first rev'). market is expecting an improved number of 2.1%. Anything <1.0% would be a real problem for the econ-bulls.

Other data: case-shiller HPI, consumer con', Richmond fed.
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Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed, sp -2pts at 2086 (intra high 2095). The two leaders - Trans/R2K, settled -0.9% and +0.4% respectively. Regardless of any further retrace, the broader trend remains bullish into the 2100s... and to new historic highs before year end.


sp'daily5

Trans

Summary

*the 'old leader' - Trans, still struggling to break/hold the 200dma... as was lost in May.
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The sp'500 should comfortably hold the 2060s for the rest of the year... and my 'reasonable' bullish target is 2150/70 at year end.

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a little more later...