Monday 28 December 2015

VIX jumps to the upper teens

With equities opening moderately lower to the sp'2040s, the VIX jumped a full 2pts into the 18s (intra high 18.13), but settling +7.4% @16.91. Near term outlook offers a brief foray to the sp'2042/36 zone.. but in any case, VIX looks set to broadly cool to the low teens by Thursday.


VIX'60min



VIX'daily3



Summary

*the closing daily black-fail candle should not inspire those equity bears who are seeking much lower levels in the near term.
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Little to add.

VIX managed the 18s... but the key 20 threshold looks out of range for the remaining three days of the year.

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more later... on the indexes

Closing Brief

US equities closed moderately weak, sp -4pts @ 2056 (intra low 2044). The two leaders - Trans/R2K, settled lower by -0.7% and -0.6% respectively. Near term outlook offers the 2042/36 zone, before making a push to 2080/90 for the Thursday/year end close.


sp'60min



Summary

*closing hour action: a lot of very nano scale chop.. but pushing upward into the close.
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So, moderate declines to begin the short 4 day week.

Price structure IS a baby BEAR flag... and I'd give a probability of around 70% that we'll briefly drop to the sp'2042/36 zone tomorrow.. before pushing back upward.

Eyes on Asia overnight. If China is lower for a fourth consecutive day... that sure won't help!

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more later... on the VIX

3pm update - net daily declines

US equities are set for moderate net daily declines. Price structure remains a baby bear flag, offering the sp'2042/36 zone tomorrow morning, before the market resumes upward. Metals are increasingly weak, Gold -$9, with Silver -3.4%. Oil is similarly weak, -3.0% in the $36s.


sp'60min



SLV, daily



Summary

*the weakness in the precious metals is causing some significant havoc to the related mining stocks. The ETF of GDX is -3.8%.
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So.. net daily declines, and on balance, we'll likely see further weakness tomorrow morning, before the first realistic opportunity of a rebound.

Again, the longer the market stalls.. and takes to battle back into the sp'2100s, the more bearish the broader outlook gets.

There is a great deal to cover on how the US/world markets close the year, and the implications for 2016.... more on that though.. later this week!
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back at the close

2pm update - baby bear flag

US equities have clawed from a morning floor of sp'2044 to the hourly 10MA of 2056. Price structure is still threatening a secondary down wave to fully wash out the weaker bullish hands. A year end close in the 2080/90 zone still looks more probable than not.


sp'60min



VIX'60min



Summary

Despite the 12pt rally, price action isn't particularly suggestive we've floored in this wave from the Christmas Eve high of 2067.

Best guess.. 2040/38. A quick hit of the 50% fib @ 2036 would be fine from a bullish perspective, so long as Tuesday closes back in the 2050/60s.
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notable strength: DIS +1.3% in the $107s
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back at 3pm

1pm update - a few more points seem necessary

After the morning low of sp'2044, it still appears the market wants a secondary minor down wave.. to at least hit the price gap zone of 2042/38. VIX appears entirely unlikely to break much above 18.50.. and still looks on track to settle the year in the low teens.


sp'60min



VIX'60min



Summary

*I've not labelled it as such, but price structure is offering a nano scale baby bear flag, with further weakness into the close/early tomorrow.
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It remains an increasingly tedious day, but there are some pretty dynamic bearish movers, esp' for commodity related stocks..

CHK -9%
CNX -9%
FCX -7%
RIG -5%, SDRL -4%
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Anyone else awake out there?

back at 2pm

12pm update - remaining weak

US equities remain weak, as Mr Market seems more than content to wash out some of the weaker bullish hands. VIX is holding most of the morning gains, +12% in the 17.70s. Metals are weak, Gold -$7, with Silver -3.0%. Oil is so far unable to rally, -2.8%.


sp'60min



GLD, daily


Summary

*with metals weak, the related miners are being dragged lower. The miner ETF of GDX -3.1%
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Little to add... on what is a very quiet day.

VIX has hit target... sp' has fallen a little short at 2044. There is fair chance of another micro down wave later today.. but broadly.. it makes no difference. We're still headed upward.. at least to 2090/2100.

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VIX update from Mr T.


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time for tea

11am update - low volume declines

US equities continue to slide, with the sp' set to floor around 2040, with VIX in the mid 18s. The precious metals are very weak, Gold -$7, with Silver -2.8% in the upper $13s. Oil is notably cooling from last weeks strong gains, -2.9% in the $36s.


sp'60min



VIX'60min



Summary

*again, note the hourly MACD cycle.. we've a bearish cross, and it'll likely stay that way into early tomorrow.
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I realise some bears will be getting overly excited at this morning post-Christmas declines, but there is unquestionably next to zero sell side behind it.

Algo-bots are just washing the market out.. before resuming higher into year end, and probably, at least to mid-January.

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Here in London city...



The retail crowd are out in force today. Anyone want to be stuck in traffic for a few hours?

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time to cook

10am update - opening weakness

US equities open moderately lower, with the sp'500 trying to fill a price gap around 2040. VIX has jumped at the open, seemingly headed to also fill a gap in the 18s. Broadly.. the market is still highly inclined for upside into mid January.


sp'60min



VIX'60min



Summary

*note the hourly MACD (blue bar histogram) cycle, set for a bearish cross within the next 1-2 hours. That does bode for the sp'2040 gap zone to be filled today.
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So.. we're a little lower, but really.. there is very little downside power.

Sustained action <2040 looks out of range.. along with VIX >20.
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notable strength.. DIS


.. as some analysts finally start to recognise Star Wars VII will break all records.

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time for a minor venture... back soon.

Pre-Market Brief

Good morning. US equity futures are moderately lower, sp -11pts, we're set to open at 2049. Whilst the USD is +0.1% in the DXY 97.90s, metals are weak, Gold -$6. Oil is back on the slide, -2.9% in the $36s.


sp'60min



Summary

There are just four days left of the year, and we're starting the short week on a somewhat bearish note.

However, nothing has changed. Another net weekly gain is highly probable... somewhere in the 2080/90 zone.

There is a clear price gap around 2040, and Mr Market will be highly prone for a sharp reversal there today/early tomorrow.

Oil will clearly play a role in this market into year end... and across 2016. For now... there is more probability of upside ($40 threshold)... than breaking new multi-year lows.
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early movers...

CHK -3%
FCX -3%
NFLX -1%
RIG -1.5%, SDRL -2%

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Update from Mr C.



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Overnight Asia action

Japan: +0.6% in the 18800s
China: holding steady in the morning, but increasingly weak into the close, -2.6% @ 3533

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Have a good Monday