With equities seeing significant weakness, the VIX opened at 29.26, but settling +7.0% @ 28.14. If the sp'500 can hold the marginal double floor of 1812/10, and begin another bounce wave spanning 4-7 trading days, VIX looks set to cool to the low 20s, perhaps 19/18s.. very briefly.
VIX'60min
VIX'daily3
Summary
Suffice to add, it is notable that we have a VIX divergence, whilst the sp'500 made a marginal double floor from 1812/10, the VIX put in a moderately lower low of the 30s vs 32s.
It is probably one of the more bullish equity signs right now.
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Clearly though, the VIX is set for much higher levels this spring, the 40/50s look a rather easy target.
For the sp'1600s - with VIX 40/50s, equity bears/volatility bulls will likely need a few 'corporate black swans'... aka, something from the oil/gas/mining sector... or even a financial.
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US equities closed broadly lower, but well above the mid afternoon lows (intra low sp'1810), settling -22pts @ 1829. The two leaders - Trans/R2K, settled lower by -1.4% and -1.0% respectively. Near term outlook offers yet another chance for a 4-7 day rally, back above the sp'1900 threshold.
sp'60min
Summary
*closing hour action: a new intra high of 1839... but not yet able to settle above the hourly 10MA
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.... well, that sure wasn't dull.
A rather classic turn around 2.30pm, closing around 1% above the low. Not quite 'hyper'... but it gives the bulls a buffer tomorrow.
We've a long 3 day weekend ahead, and there is always going to be threat that the PBOC might do something this weekend/Monday.
Broadly... regardless of any short term bounce... the bigger trend remains absolutely bearish.
The sp'500 broke a fractional new cycle low of 1810, but from there it has formed a very clear spike floor. Meanwhile, there is chatter that OPEC are in talks for supply cuts.. but such cuts will likely be minor, and will take months to feed through.
sp'60min
VIX'60min
Summary
So.... another example of a turn from 2.30pm. Kinda like magic, yes?
It looks like we've a short term floor... but of course.. broadly... the bigger trend is absolutely bearish.
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In far more important news... we've a new Batman vs Superman trailer
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Unless we collapse <1800.. or soar beyond 1900......... I'll merely return at the close.
The sp'500 is holding the earlier floor of 1812 - along with a VIX opening peak of 29.26 (rogue print ignored). Clearly, it remains a borderline situation, with threat of failure at any time. From a pure cyclical perspective, the market has prime opportunity to rally from here.
sp'60min
VIX'60min
Summary
Re: metals/miners.... both are cooling from their earlier highs, but still set for powerful net daily gains. More on those two later.. on my other pages.
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As for equities.. we're approaching the 2.30pm typical turn time.... best chance for a late day recovery will arrive soon.
Frankly, any close >1812 would be something for those currently long, but first serious target should be the hourly 10MA, which at the close will be around sp'1835.
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notable weakness: BA, -8.8%...
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strength... US bonds.. TLT
Breaking a new high into the $135s. Clearly... ALL downside targets are on hold.... and if equities broadly decline into the early summer.... TLT will continue to climb.. and accelerate.
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2.28pm... We're still seeing rogue prints on the VIX
1min cycle
Been happening way too much lately.
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2.34pm.. Fractional new cycle low of sp'1811... but its time for a turn... high risk to the bears from here.. not least on a Thursday.. the week before opex (as Riley often highlights).
VIX +12% @ 29.60s.... still moderately divergent from Jan'20th.
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The Jan'20th low of sp'1812 saw VIX hit a peak of 32.09. Today saw the VIX max out from the very open at 29.26, for now... there is a rather clear divergence... with the VIX suggestive equities are still set to rally... despite there being no real capitulation.
VIX'60min
sp'60min
Summary
*the VIX computer is a little twitchy, there have been a few sporadic 'rogue prints' today and across the last few weeks.
5min
I am disregarding the recent spike high to 29.71... its a rogue print.
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Underlying MACD (blue bar histogram) on the equity cycle is on the low side.
Equity bulls should be seeking >1825 by the close to give some hope that we've a double floor in the sp'500.
Again though, it is notable that the Nasdaq and R2K have already broken below their respective Jan'20th lows.
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notable reversal... DIS, daily
DIS is one to watch as earnings were unquestionably fine. First bounce target would remain the $96/98 zone.... which is a fair way up.. and might equate to sp'1920 - where the 50dma will be end month.
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US equities are so far entirely unable to find a floor, lead lower by the R2K, -2.1% @ 943. Most notable of all today, the precious metals, seeing explosive upside, Gold +$56, with Silver +4.0%. The related mining stocks are seeing similar price action, with the miner ETF of GDX +7.6%
sp'60min
GLD, monthly2
GDX, monthly
Summary
*I'd not normally highlight the giant monthly cycles during the day, but we have CLEAR multi-year bullish breaks in Gold, and the related miners.
There is a great to consider with those two.. as if the floor is in, the next pull back will be one to buy.
re: the count on GLD. Its an old count, it was based on the notion of Gold flooring late 2015 - related to Armstrong's ECM. As things were of course, we broke another new low in Gold and the miners in December.
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As for equities...
Its not looking great... as other indexes are well below the Jan'20th low. Typically, the sp'500 would follow.. sooner or later.
The head of the US Federal Reserve, aka the CEO of print central, aka Janet Yellen, continues to try to inspire confidence to the US senate, and the US/world capital markets. For the moment, the markets are arguably increasingly frustrated that a rate cut/QE are still many months away.
sp'weekly1b
VIX'weekly
Summary
*I wanted to take a broader look this hour at the bigger weekly cycles.
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First, the current equity candle is ugly as hell.. offering ZERO sign of a floor/turn. If sp'1812 fails... then next key support is not until 1750/25 zone.
For the moment, I'm guessing 1812 will hold, but we're only 10pts shy of that right now.
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VIX is increasingly powerful, now sustainably above the key 20 threshold, something which was near impossible to even test across 2013-14.
Underlying momentum in the VIX shows no sign of a turn... a weekly close >30 would bode very bearish for US equities next week.
Indeed.. equity bulls really need to see a turn later today.. and push back upward tomorrow, at least to the sp'1840/50s.
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Re: Gold
A rather bizarre sight.. as Gold is going exponential, now up almost $50. Clearly.. this rate of increase will end badly.. and is completely unsustainable.
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Here in London city...
After an icy night... its actually pretty good here, and another day closer to the summer.
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time to cook (no in-house servants in my world)
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11.02am.. BA under extra pressure, some kind of investigation...
Next support the giant psy'level of $100, after that... empty air to $90/89. I'll try to cover it more later.
US equities open significantly lower, with the sp' -26pts @ 1825, and VIX +8% in the 28s. The precious metals are catching a powerful fear bid, with Gold +$36, and Silver +2.2%. It is notable though, there are some initial signs of exhaustion tops in the VIX and the metals/miners.
sp'60min
VIX'60min
GLD, daily
Summary
*I'll try to cover the metals and miners in the next hour.
Suffice to note... after a sharp retrace from Monday afternoon, we're seeing another powerful break higher.
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So... opening sig' declines, but there are signs of a short term exhaustion floor - although it sure does NOT feel in any like capitulation.
Black fail candles in the VIX, Gold, miners. Such candles are not to be dismissed lightly.
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*I will be here across the day... as ever... say hello via Disqus (or email) :)
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time to shop.... back shortly for another Q/A with the CEO of print central
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10.33am...
Every time Yellen says 'transitory'.... you know you have to take a drink.
Good morning. US equity futures are significantly lower, sp -33pts, we're set to open at 1818. USD is -0.3% in the DXY 95.50s. Gold continues to catch a very strong fear bid, +$36, now in the $1200s. Oil remains in broad implosion mode, -2.8% in the $26s.
sp'60min
sp'weekly8e
Summary
This market is really starting to get frustrating.
Cyclically, it is a lousy setup in terms of a short lasting anything beyond a few days (if not hours), but as things are, the bulls are unable to muster more than a day or two of consecutive upside.
Now we're on the edge of taking out the Jan'20th low of 1812... below that, there really isn't anything but empty air to key fib' retrace support of 1730/10.
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Update from a returning Oscar
I might cover the targets more later, but the low 1600s and 1500 area are certainly valid... and do seem probable. The issue of acceleration is also something I am seeking, but hell, I thought it'd be no earlier than mid March.
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I am NOT in the mood to chase lower from the 1820/00 zone, not least with next Monday CLOSED, which is kinda interesting, as that is when China re-opens after being shut for a week.
Urghh.. its getting messy!
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early movers...
BAC -2.8% @ $11.60s... as rate hikes seem off the menu for rest of the year
DIS -2% in the $87s, next support is the 80/75 zone
TWTR -6% in the low 14s... terminal decline?
TSLA +3% @ $148... having traded from 135 to 150s yesterday AH
GDX +6.6%... as precious metals are starting to scream higher
TVIX +11% in the $12.70s, near the Jan'20th high.
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Overnight action
Japan: -2.3% @ 15713... broadly ugly
Germany: currently -2.0% @ 8836... next support 8K
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Ohh, and we've a few more hours of Yellen today. If she is as weak as she was yesterday, or says something stupid, the market could implode under 1800 today.
Riley would note the typical pre-opex Thurs/Friday low, and that is one of my concerns.
I'm also aware some are counting the move from sp'1947 as a 5 wave decline... although there are bearish aspects that suggest its something more grander than that.
In any case... broader trend IS clear. Anyone going long is facing a freight train, and we've not even got to the stage of mini black swans yet in the oil/gas/mining sector. Ohh, and then there is Deutsche bank.... but that is fine though, right?
Have a good Thursday
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9.26am.. sp' -32pts... 1819... with VIX set to open +7-10% in the 28/29s.
Gold +$44... Silver +3.0%.... the latter is an interesting one, as although its primarilty an industrial metal.. it still catches a fear bid like Gold.
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9.40am ... black-fail candle on the VIX... and more interestingly.. the gold/silver miners.
The infamous pre-opex Thurs/Friday low... before 5-7 days of bounce-upside?
notable weakness, BA -4% in the $111s.... . sub 100 is a given in the broader picture.
US equities closed moderately mixed, sp -0.3pts @ 1851 (intra high
1881). The two leaders - Trans/R2K, settled -0.2% and u/c respectively.
The VIX settled -0.9% @ 26.29. Despite ongoing shaky price action, near term outlook remains unchanged,
with probable further upside back above the sp'1900 threshold.
sp'daily5
VIX'daily3
Summary
A day of significant morning equity gains, but fading away to nothing by the close.
For the bulls, it could be far worse, with key support at 1834/12.
Best guess: renewed upside, back above the 1900 threshold, with the 1950/70 zone viable before end month.
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Update from Riley
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Market/Econ chatter from Schiff
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Looking ahead
Thursday will see the latest weekly jobs.
Yellen will once again appear, this time to the US senate, and that will also likely last until at least 12pm.
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