With equities closing significantly lower, the VIX was naturally on the rise (intra high 21.86), settling +6.5% @ 20.59. Near term outlook offers further equity weakness to the sp'1960/50s, and that should equate to VIX 25/26s.
VIX'60min
VIX'daily3
Summary
*a notable second black-fail candle in three trading days. Typically, such candles would be indicative of renewed equity upside.
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The VIX was something of an anomaly today. Yes, it closed net higher, but the gains were minor, relative to the equity declines.
Is VIX warning that equities are very close to flooring, or is VIX merely lagging, reflecting market complacency?
My guess is its the latter, with lower equity levels due in the days ahead. If that is the case, the VIX should at least test the highs from Dec' 14th.
US equity indexes closed significantly lower, sp -26pts @ 1990 (intra low 1979). The two leaders - Trans/R2K, settled lower by -2.0% and -1.5% respectively. Near term outlook is for continued weakness to the gap zone of 1954/51. The bigger weekly/monthly cycles are more suggestive of 1920/00.
sp'60min
Summary
*closing hour action: A new intra low of 1979.05, but then rebounding around 0.5%.
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... and that concludes trading day'3 of 2016. The second big daily decline of the year... and the equity bears are giving the mainstream cheerleaders a good scare to begin the year.
There is a lot of chatter about a rebound. Some are even touting new highs.. but that seems ludicrous.
Anyone who gives ANY credence to the bigger weekly/monthly cycles should be well aware of the current broader trend shift to the downside.
US equity indexes are set for the fourth net daily decline in five trading days. Market mood remains very weak, and the 1960/50s still look an easy target. Gold is holding a fear bid gain of $14, whilst Oil remains -5.0% in the upper $33s.
sp'15min
sp'60min
Summary
New intra low... confirming the bear flag. In theory, it should now be a straight run to at least the 1960/50s early tomorrow.
Regardless of the exact close.... its another day for the equity bears.
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*as things are, it seems I've been lost in the minor noise, and I am not interested in shorting from this level.
The next realistic prime setup won't arguably be until late January.
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3.36pm.. For those who come back more than once an hour.. this is for you...
sp'15min
If for whatever reason we open higher tomorrow, I'll look to short it then. In any case... price action remains weak.
VIX is +6%.. which frankly is surprisingly... well below the Monday high.
Price action remains moderately choppy, and there remains high threat of a brief push to the sp'2005/07 zone by 3pm. From there, renewed weakness into the close looks probable, as most should realise 1986 is no more a key floor than 1989 was. Oil continues to break new lows, -5.0% in the $33.90s.
sp'15min
USO, daily2
Summary
*from a pure cyclical perspective, the 15min MACD cycle is on the low side, and it makes for a lousy short level.
There IS threat of a push upward.. before cooling into the close.
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Suffice to add... typical turn time is around 2.30pm. If we're around 2005/07.. I'll take it!
Seeking 1960/50s as a basic target... and that is clearly viable before the weekend.
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stay tuned.
2.20pm.. upper bollinger on the 15min cycle... sp'2000... won't be easy to push much past there.
US equities remain broadly weak, with price structure offering a bear flag. The early low of sp'1986 makes no more sense as a key floor than 1989 did, and the 1960/50s look a relatively easy target. Gold is holding a fear bid gain of $12. Oil remains in implosion mode, -4.2% in the $34s.
sp'15min
Summary
The current price action is offering a possible ABC wave count... with a C UP into the 1.30/2.00pm time frame.
... I'll look for a short somewhere in the 2005/2007 zone. That seems very reasonable, if you assume there will be downside of at least 40pts to the 2065/60 zone.
Are we setting up for something a little more dramatic though, like a giant gap lower next Monday morning, for short term capitulation?
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yours... kinda with itchy trigger finger.
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*updates.. if/when I hit buttons
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1.26pm.. Widened bear flag a bit....
From a pure MACD cyclical perspective, this is a lousy place to be shorting from. I WAIT.
US equities appear in the process of merely churning out another bear flag. A daily close above sp'2010 looks very unlikely. First target remains the 1960/50s, and that should equate to VIX in the 25/26s. Oil remains broadly weak, -3.8%, having broken a new low of $34.17.
sp'15min
VIX'60min
Summary
For those with eyes on the bigger picture, this intraday nonsense really is just that... nonsense.
We're still on track for lower levels in the near term.
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VIX update from Mr T.
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What am I doing?
Well, I'm somewhat cautious, as from a pure cyclical perspective, the 60/15min cycles are not exactly on the high side.
I might pick up a short-index block within the next hour or so... probably by 2.30pm. In any case, no longs.
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US equities are battling to rally from the early low of sp'1986, but that makes no more sense as a key low than 1989 did. Renewed weakness is due.. at least to the 1960/50s. The bigger picture is what really matters though, as a bear market appears under construction.
sp'60min
sp'5min
Summary
*price structure on the micro 5min cycle is................. a baby bear flag.
Hard to guess if we'll see another little push upward. If we do.. it will be one to short.
Maybe 2002/2004 in the 12pm hour.
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So... a new cycle low of sp'1986... and that sure isn't the floor in the current down wave from last Wednesday (2081)
US equities open significantly lower, breaking the Monday low of sp'1989. There is empty air to the 1965/50 zone, with the bigger weekly/monthly cycles offering 1920/00. Gold continues to build a fear bid, +$13. Oil breaks a new multi-year low, -3.1% in the $34s.
sp'60min
vix'60min
Summary
*opening black-fail candle in the VIX... bodes for a brief bounce to around sp'2000.. before resuming lower.
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Day'3 of the year, and we've now seen two big opening declines.
Clearly, there is plenty of time for a counter rally this month, but it will have to begin from lower levels than we are currently trading.
If the bears can manage 1920/00 zone, it makes ANY attempt to break >2040 again in the near term.. a certain FAIL.
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time to shop... back soon... for the Oil report.
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10.31am Oil, net weekly draw of -5.1 million barrels.. seasonal issues?
sp' -19pts @ 1997 VIX +6% in the 20s....
Equity bulls are fighting hard, but sp'1986 makes no more sense as a low than 1989.
Good morning. US equity futures are significantly lower, sp -29pts, we're set to open at 1987. The Monday low of 1989 is set to be broken, opening up a straight move to the 1960/50s today. The bigger weekly/monthly cycles are offering the 1920/00 zone.
sp'60min
Summary
The detonation of a nuclear bomb in North Korea is clearly not helping global equity sentiment. Other than a giant 10km rock falling into the Pacific, is it the ultimate excuse for a big gap lower.
With an open <2K, the bear flag will be confirmed.
A few have correctly noted in the past few days there is support in the 1960/50s... and it will be interesting to see if the market finds support there.
In the bigger picture it doesn't much matter though.. we're headed far... far lower.
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Update from Oscar
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Doomer chat, Hunter with Ms. Brown
As ever, make of that, what you will.
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Overnight action....
Germany, DAX currently -1.4% @ 10160.
Japan: -1.0% @ 18191
China: +2.2% @ 3361.. strong gains into the close, as the 'lockup/no sell' rule is extended to 'indefinite' by the communists. The PBOC were also probably buying after the nuke.
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What am I doing? Well, I'm faced with either chasing it lower on ANY nano bounce in early trading.. or merely sitting it out until the current cycle plays out... and then waiting for a bounce to play out into late January.
In any case... I can't be long now... the December close was decisive across the world. We're headed broadly lower in the weeks and months ahead.
Have a good Wednesday
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8.00am... sp -33pts... 1983....
notable early movers..
VXX +8%, TVIX/UVXY +16%
AAPL -2.5% @ $100
DIS -1.9% @ $99
8.15am ADP jobs: 257k, well above expectations. Good news is 'bad news' ?
sp -34pts @ 1982
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9.00am.. sp -30pts... 1986...
Meanwhile.. the cheerleaders are under strain...
It will be a rough time ahead for those who want to wave pom poms.
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9.12am.. I keep writing 2080s... rather than 1980s. I think my subconscious is struggling to believe the market is actually trading under the 2K threshold!
9.36am... A break <1989.... empty air to 1965/50 zone.
VIX is kinda surprisingly cool, just +12% in the 21s. I'd have expected 23/24s at least.
Monday was pretty exciting for equity bears, and some might understandably feel frustrated after a rather subdued Tuesday. However, price structure is offering a rather clear bear flag, with renewed downside in the near term, at least to the sp'1960/50s.
sp'weekly6
Summary
Despite the net daily gain, the sp' weekly 'rainbow' candle remains an outright bearish red.
There is plenty of opportunity for downside to the lower bollinger, currently @ 1911. By early next week, that will be around 1920.
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Meanwhile... in the far east...
China, monthly
Despite the Tuesday morning intervention from the PBOC (and/or its agents), the Shanghai comp' still closed net lower for the third consecutive day.
With the 3400 threshold lost, next support is 3K, then 2500s, 2K, and the 1600s. Clearly, any price action <2500 is difficult.
*it is notable that Bank of America has a target of 30% downside to the 2600s in 2016.
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Update from Mario at SMF
Its a brief video, but its interesting to see a straight call for a 30% decline.
*bonus chart*
sp'weekly8d -fib retraces
If by some miracle we're trading in the 1600s or lower in the months ahead, there are a fair few fib' retrace numbers to be aware of. In my view, it will be damn difficult to see any sustained price action below the double top of 2000/2007....so... be aware of the 1604 and 1573 fibs.
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Looking ahead
Wed' will see the latest ADP jobs, intl' trade, ISM/PMI serv' sector, factory orders, EIA report.
*the FOMC min's will be released at 2pm, and the algo-bots will certainly react to that.
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US equity indexes closed moderately mixed, sp +4pts @ 2016 (intra low
2004). The two leaders - Trans/R2K, both settled higher by around 0.2%.
Near term outlook offers the 2030/40 zone, before a powerful move lower,
at least to the 1960/50s. The bigger weekly/monthly cycles continue to
offer 1920/00 zone.
sp'daily5
Trans
Summary
*a new multi-year low for the Trans of 7277. Next key support is the 7K threshold, after that.. 6000/5500.
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Suffice to add, a day of moderate chop.. a 'holding pattern day'... with most indexes offering price structure of a bear flag.
Outlook is bearish... at least to the 1960/50s... perhaps 1920/00 zone.
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