With US equity indexes closing the week on a negative note, the VIX was on the rise, settling +7.0% @ 23.38. Near term outlook offers renewed equity upside to the sp'1960/80 zone, and that should equate to VIX 18/17s. Across the week, the VIX saw a net weekly gain of 15.7%.
VIX'60min
VIX'daily3
VIX'weekly
Summary
*it is notable that the most recent four weekly candles all have rather spiky tops.. which is suggestive of renewed cooling in volatility.
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So.. equities end the week on a very bearish note, but to me, the VIX never really showed the appropriate amount of upside kick/power today.
For now, there is very little market panic/upset, and its just a case of seeing rather powerful swings, but still broadly climbing from the Jan'20th low of 1812.
Hyper upside in the VIX - to the 40s.. or even higher, seems out of range until at least mid March.
US equity indexes closed significantly lower, sp -35pts at 1880 (intra low 1872). The two leaders - Trans/R2K, settled lower by -1.5% and -2.9% respectively. Near term outlook offers distinct threat of renewed upside, but on any broader outlook, the recent key low of 1812 looks set to be broken under by late March.
sp'60min
Summary
*closing hour action: yet another new intra low of 1872, an attempt to rally.. but maxing out at 1880
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.. and another crazy week in the world's most twisted casino comes to a close.
We've swung from a Monday high of 1947 to 1872, although arguably the VIX never showed any serious upside kick.
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Best guess: market sees another push higher.. >1947.... with Yellen as the excuse.. and indirectly helped whilst China is shut for 'spring festival'.. aka.. Monkey year.
Have a good weekend
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*the usual bits and pieces to wrap up the week across the evening.........
US equities remain significantly lower, with a new intra low of sp'1875, but still 63pts (3.2%) above the recent key low. That low still looks secure for at least another 3-4 weeks. Yellen remains a key threat to the equity bears.. and with China shut across next week, the door IS open to renewed upside.
sp'60min
VIX'60min
Summary
Clearly, today's declines were stronger than expected, and we're set for very significant net weekly declines.
Again, its notable that many have probably already forgotten that we broke a new cycle high on Monday.
As things are, if we are to see a break >1947... that looks viable no earlier than next Wednesday.
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As for ice...
I only noticed after it was already half way through, 'Ice cold in Alex' (1957) was playing. It remains one of my all time favourite movies, simply perfect.
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... updates into the close.. if price action picks up some more...
3.07pm... so much for 1875... now 1872 again... with VIX 24s.
VIX is still just not showing the kind of upside action that would reflect real concern.
3.20pm.. Yet another spike floor attempt.. this time from 1872 to 77.... in theory a close of 1883/85 is now on
3.34pm. Well, its getting choppy, and from a pure cyclical perspective, we're on the very low side. Market has two days to grind back to 1910/20s.. and then >1947.... whether Wed' or Thursday.
.. and I realise some of you will be merely seeking a straight run <1812 next week.
I'd only add.. even during the collapse wave of 2008, the market still had to rally before another drop - relative to late Dec/Jan'.
US equities are significantly lower, with the sp' breaking a fractional new low of 1879. VIX remains relatively subdued, +7% in the 23s. With the jobs data out of the way, and China shut next week, the window is still open to the equity bulls for another push upward.
sp'60min
VIX'60min
Summary
Suffice to add.... marginally interesting declines, but for now, I can't take much of it seriously.
VIX is simply not suggestive of any real problems... yet.
As it is... the afternoon turn time of 2.30pm is fast approaching. Bulls are soon to have another chance to claw things back into the close.
Notably though... we're 3.3% below the sp'1947 high of Monday afternoon.
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Whilst US equities remain significantly lower, sp -29pts @ 1885, with the VIX +4% in the 22.90s, there was a rather interesting guest on clown finance TV. Bartels of Merrill Lynch was rather decisive, calling for the 1600s, then renewed upside into year end... with a grander target of 3500s by 2025.
sp'monthly3d - double top back test.. and UP
Bartels admits to being a chartist
Hyper bullish upside into the mid 2020s.
Summary
I shall certainly continue to whine and bitch about the cheerleaders on clown finance TV. Most of the time they are absolutely annoying, but from time to time, they do have some very interesting guests.
Bartels of Merrill Lynch (owned by Bank of America) effectively outlined an outlook that is also shared by yours truly.
She even made the point that we've still to see capitulation within the commodity sector. She didn't tout any particular names for bankruptcy as I might have, but its clear she is seeking a few corporate implosions into the early summer.
If Bartels and I are broadly correct, we'll get good opportunity to trade short.. and then heavy-long into year end.
I am well aware though, if we're trading in the sp'1600s (or even briefly 1500s) within the next 2-3 months, it's going to be stomach churningly difficult to go long... or at the very least... NOT remain heavy-short.
Despite equities breaking a new intra low of sp'1880, the VIX is only moderately higher, +6% in the 23s. For now, this is still arguably nothing more than a case of post jobs depression. The USD is notably on the rebound, +0.7% in the DXY 97.10s.
VIX'60min
sp'60min
Summary
*price structure on the hourly equity chart is offering some kind of complex H/S. I suppose you could extrapolate from 1947 to 1880... 67pts.. and add to 1947.. but that would suggest sp'2014.. and that seems way too high (at least to me).
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So.. we're significantly lower, but VIX is still not confirming.
I'd have to see sustained action in the 26/27s this afternoon to take the current equity weakness seriously.
US equities have so far seen a morning low of sp'1891 (with VIX 22.93), but look set to claw upward into the weekly close. Yes, we're still set for a somewhat significant net weekly decline, but overall... current price action still favours the bulls for next week. The 1960/80 zone remains well within range.
sp'60min
sp'weekly1b
Summary
*rising support in the 11am hour will be around 1885.
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So..yes, a net weekly decline is due... but it is also notable we broke a new cycle high on Monday of sp'1947.
Call it a B wave retrace, a sub 2, or a Y down. Whatever you want to call it... we've seen a rather natural retrace of the wave from 1812/1947, and we're set to climb higher next week.
In theory.. a break >1947 should offer another 1.5-2.0%.. . and that will get us to target.
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Here in London city...
Not exactly inspiring, but then.. overall, its been an okay week.
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time to cook
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11.30am... marginal break of rising trend... but still, I can't take the current declines seriously.
VIX is +6% in the 23s... which really shouldn't inspire the bears much.
US equities open moderately lower, but early price action looks relatively bullish - especially indicated via the indirect signal of the VIX. A weekly close in the sp'1925/35 zone looks viable, which will make the 1960/80 zone easily within range by next Wed/Thursday.... when the Yellen will appear.
sp'60min
VIX'60min
Summary
The economic bulls should certainly not be inspired by the latest jobs data. It certainly isn't great, but then... neither can the recessionary bears get overly excited yet. Maybe we'll see a sub 100k number in March/April.
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As for equities... indexes will probably close positive today, although net weekly declines still look due.. as last Friday's close of sp'1939 looks out of range today.
More than anything, the early action in the VIX is highly suggestive that equity bulls will be able to push back upward later today... and across much of next week.
*I've eyes on TVIX, currently +2.3% in the $9.50s, but looks highly vulnerable to 7.75/7.25 next week.
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notable weakness... LNKD, GPRO, but I might cover those later...
Good morning US equity futures are a touch lower (ahead of the jobs data), sp -2pts, we're set to open at sp'1913. USD is bouncing, +0.2% in the DXY 96.60s. Metals continue to climb, Gold +$2. Oil is +0.7% in the $32s.
sp'60min
Summary
So... market remains in churn mode.. ahead of the jobs data... lets see what the BLS deliver.
Broadly, the sp'1960/80 zone looks on track for next week. Yellen will be a real threat to those currently short... any upside spike next Wed/Thursday would make for a rather natural time/level to short.
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early movers...
LNKD -30%... as Mr Market continues to operate a no tolerance policy for companies that miss on earnings.... or worse... those that lower their outlook.
SDLR +10%, but then... 10% of $2.00 still doesn't negate the horror since summer 2014.
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Update from Mr C.
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Overnight action
Japan: broadly bearish, -1.3% @ 16819
China: -0.6% @ 2763. The Chinese markets are CLOSED for the entirety of next week, with 'Monkey year' beginning next Monday.
Germany: currently u/c around 9392.
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Have a good Friday
*awaiting the jobs data.....................
8.31am: net job gains: 151k headline jobless rate: 4.9%
Clearly, net gains were pretty weak.... in some ways, equity bulls could almost argue its borderline Goldilocks, as it rules out a rate hike, but is neither apocalyptic.
Equities: initial drop, sp -10pts... 1905.
... currently -6... 1909
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notable 'relative weakness' TVIX +2.0%.. . which is weak considering equities.
Indexes look highly prone to reversing higher this afternoon.
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8.45am... sp' -7pts... 1908... there is pretty strong support in the 1900/1890 zone.
We're still set for renewed upside.
Again.... those watching the VIX ETN of TVIX should notice its almost turning negative... and entirely suggestive the market will rally later today.
It is turning out to be a fiercely bearish week for the King of FIAT land, with the USD declining for the fourth consecutive day, settling -0.8% @ DXY 96.56. Near term outlook offers further downside to the 95/94s. Broadly though, the 105s, and eventually, the 120s still look due.
USD, daily
USD, monthly1
USD, monthly2, rainbow
Summary
*it is notable - from monthly'2, the MACD (green bar histogram) has turned negative for the first time since July 2014.
Of the last 12 monthly candles... 10 were blue, and price structure is a clear double top from the giant psy' level of DXY 100.
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In the long term, the US dollar still looks the superior currency in the world.
China looks set to devalue the Yuan this year.. perhaps as much as 25/35%.
Meanwhile, the BoJ and ECB continue to print, and with further economic weakness, will likely spin up their printers even more. That will only help to keep downward pressure on their currencies.
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Market/Econ chatter from Schiff
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Looking ahead
Friday will see the latest monthly jobs data from the BLS. Market is expecting net job gains of 188k, with a static jobless rate of 5.0%.
US equity indexes closed broadly higher, sp +2pts @ 1915 (intra high
1927). The two leaders - Trans/R2K, settled higher by 3.2% and 0.4%
respectively. Near term outlook offers renewed upside, with high threat
of the 1960/80 zone. The recent key low of 1812 is likely to hold until
at least mid March.
sp'daily5b
Trans
Summary
*price structure on the 'old leader' - Transports, remains a very clear multi-week bear flag. Broader downside to the 5500/5000 zone looks probable by late spring.
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The sp'500 will have a Friday morning trading range - via hourly cycle, of 1920/1890. The 1872 low looks very secure, with probable upside to the 1960/80 zone next week.
Considering the bigger weekly MACD cycles, the market is likely to churn in a broad range into March. That will no doubt frustrate and confuse many. From a bearish trading perspective though, each extra week of churn helps to burn off the current oversold condition, and will make for an increasingly safer market short trade.
