VIX cools into the long weekend

With US equities closing significantly higher, the VIX was naturally in cooling mode, settling -9.7% @ 25.40. Near term outlook offers another foray into the sp'1900s, and that will likely equate to VIX cooling at least to the 22/20 zone. Its possible we'll briefly see the 19/18s, before the next surge in March.


VIX'60min

VIX'daily3

VIX'weekly

Summary

*a net weekly gain of 8.6%, but the weekly candle sure is spiky, and suggestive of further cooling next week.
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Suffice to add, the VIX naturally cooled into the long 3 day weekend. It would seem we'll see at least the 22/20 zone within 3-6 trading days. The only issue is whether the VIX will briefly break into the upper teens, before the next cycle.

In any case... much higher volatility levels look due this spring.

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*I have eyes to be long VIX for the next cycle across March/April. VIX 40/50s look highly probable, and thus I'll probably look to pick up some VIX calls in the 25/30 strike level. For now though... there is no hurry, not least as VIX will likely cool for the next 4-6 days.
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more later...on the indexes

Closing Brief

US equities closed a bearish week on a very positive note, sp +35pts @ 1864. The two leaders - Trans/R2K, settled higher by 2.4% and 1.9% respectively. Near term outlook offers further upside to the sp'1920/30 zone.. where the 50dma will soon be lurking.


sp'60min

Summary

*closing hour action: a new intra high of sp'1864, as some of the equity bears were ground out... understandably fearful of an opening Tuesday gap higher.
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.. and another week at the world's most twisted casino comes to a close.

New multi-year lows for some indexes... as the talk of NIRP and further QE continues to increase.

No doubt... as the market breaks lower across March/April... the central banks will try to halt further declines. Whether the market can sustainably ramp from there.... very difficult to say.

To me, the bigger issue is one of capitulation in the oil/gas/mining sector... which we are yet to see.

Have a good weekend
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*the usual bits and pieces across the evening.. to wrap up the week

3pm update - ending the week on a positive note

US equities are ending the week on a distinctly positive note, continuing to rebound from the Thursday low of sp'1810.. already +48pts at 1858. The VIX continues to cool, -8% in the 25s. Gold is cooling, -$7 in the $1230s. Oil is 11% in the $29s... on what remains, mere rumours/chatter of possible supply cuts.


sp'60min

Summary

Well, its been a tough week... and its kinda useful that today is rather subdued.


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To poster:  Brelsa... this is something I finally just got around to adding to my main trackers list on my trading screen, and also to stockcharts...

INFN, daily

Considering the broader market outlook, further downside looks due, at least to the $11/10s by the late spring.

Earnings were really good - see HERE, and the stock merits keeping an eye on.. as the sp' implodes to the 1600s.
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back at the close

2pm update - no rigs does not equate no wells

Whilst US equities are holding significant gains, there is a rather notable instance of possible extreme idiocy on clown finance TV. Even on the clown scale, the notion that the lack of a drill rig means oil is not being pumped out of the ground is truly bizarre. Does Mr S seriously believe it?

Brian Sullivan 'No rigs means no wells'

sp'60min

Summary

*the latest RIG count showed a drop of 28, rather more than expected, taking the current active count to just 439.

Effectively, around two thirds of the industry has ceased to operate since summer 2014.
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Honestly, I'm not quite sure if Sullivan is merely just not wording things correctly, but considering its the mainstream clown news TV... I can't figure it out.

Do they not realise they even if the Baker Hughes RIG count goes to ZERO.. that only means the number of new wells being drilled is ZERO... not existing wells.... of which there were around 1.1 million in 2014. I'd imagine that number is currently around 1.2 - 1.3 million as of today.

Indeed, even if the RIG count was ZERO for a few years, oil/gas production would only very slowly taper off.

.. and that is why supply is going to remain a real problem in the mid term, as demand is not going to significantly increase this year.

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Anyway... back at 3pm

1pm update - still awake?

US equities are comfortably holding rather significant gains, with the sp'500 naturally initially stuck at declining resistance of 1859/61.. that stretches back to the 1947 high. The market looks set to jump higher next Tuesday into the 1880/90s.. with 1900s by end of next week.


sp'daily5b

VIX'daily3

Summary

As for staying awake.. well, understandably.. things are quietening down out there.. as most are now seemingly resigned to net daily gains... ahead of the long weekend.

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notable strength... BAC, daily

A bounce is clearly underway...  but anything above $14 looks out of range. Broader downside to the psy' level of $10.00 looks extremely probable. Its pretty incredible to reflect upon that this was a stock that tried for some years to break/hold $18... but never could.

Low/zero rates are not helping.

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back at 2pm

12pm update - increasingly subdued

With sellside pressure exhausted, US equities have built significant gains, and look set to hold them into the long weekend. VIX is naturally in cooling mode, -7% in the 26s. Metals are similarly cooling from recent hyper gains, Gold -$9 in the $1230s. Oil is +11% in the $29s.


sp'daily5b

GLD, daily

Summary

Little to add.

We're clearly set for a net daily gain across all indexes, and that should setup further upside across next week.

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VIX update from Mr T.



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time for lunch

11am update - murky skies for the bears

US equities are battling to push into the sp'1850s, with VIX -4% in the 26s. The market is clearly due a bounce, one that should last at least 4-5 days, taking the sp' back into the 1900s. As things are, the 50dma will be prime resistance, and by end month, will be around 1930/20.


sp'daily5

VIX'daily3

Summary

Little to add.

With a long 3 day weekend ahead, price action will be inclined to be more choppy and subdued.

*were I not writing, I'd turn off my screen and come back Monday Feb'22nd.

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Here in London city....

Grey.. and feeling icy cold. Not great... but still, we're another day closer to summer.
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time to cook

10am update - opening gains

US equities open moderately higher, and now its a question of whether the gains will hold... or fade ahead of a three day holiday weekend. On balance, US equities look set for a brief foray back above the sp'1900 threshold. Metals are naturally cooling after recent hyper gains, Gold -$7.


sp'60min

VIX'60min

Summary

*hourly MACD cycle is set for a bullish cross in the 10am hour.. so despite opening gains a little shaky, they should hold.
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As things are.. even if the current gains do hold, most US indexes are set for a second consecutive sig' net weekly decline.

Ironically, the exception is the Transports... set for the fourth consecutive weekly gain.
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Best guess... further upside across next week.
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notable weakness, BA, daily

Viable upside to 113/116 looks viable.... with a broader downside target of the mid 70s

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stay tuned

Pre-Market Brief

Good morning. US equity futures are significantly higher, sp +20pts, we're set to open at 1849. USD is seeing a moderate bounce, +0.3% in the DXY 95.80s. Metals are cooling, Gold -$8, with Silver -0.2%. Oil is +1.0% in the $27s.


sp'60min

Summary

There are multiple aspects of resistance in the 1850/70s... not least declining trend, which at the close of today will be 1872.

Equity bulls should be frankly content with any weekly close in the 1850/60s... and that should keep open the door for a brief foray into the 1900s before month end.

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Overnight action

Japan: -4.8% @ 14952... lousy end to the week, but looks vulnerable to a rebound... if China bounce next week.

Germany: currently +1.7% @ 8902.
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notable stock...

Boeing (BA)

Seen on the giant monthly cycle, this stock has already seen a 50% retrace of the gains from 2011. Ugly outlook...to the mid 70s.
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*awaiting retail sales data.... and a few other things...


8.58am.. Retail sales, +0.2% m/m     reasonable.

sp +23pts... 1852.

Meanwhile.. DB says it will buy back some of its debt... stock is +9% in the $16s. Clearly... its all fine now, right?

It sure ain't dull

It was another very dynamic day in the US equity market, with the sp'500 fractionally breaking the Jan'20th low, flooring at 1810, and settling -22pts @ 1829. Near term outlook offers a bounce into the 1900s, but broadly.. the 1600s look a rather comfortable target this spring.


sp'weekly1b

sp'weekly8e

Summary

Suffice to add... another short term bounce looks due, but broadly.. this market is clearly broken.

We're headed to the low 1600s.. and will likely see the VIX 40/50s in March/April.

The real issue is what the names of the mini black swans will be this spring... CHK, FCX, TCK, SDRL, RIG, Glencore, or perhaps a financial with the initials DB?
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Market/econ chatter from Schiff



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Looking ahead

Friday has a wheel barrow of econ data... retail sales, import/export prices, bus' inventories, consumer sent'.

*Fed officials Kaplan and Dudley are on the loose, and Mr Market will be listening.
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Goodnight from London

Daily Index Cycle update

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'daily5

Nasdaq comp'

R2K

Summary

*I highlight the Nasdaq and the R2K, as they have been recently leading, below their respective Jan'20th lows, with the sp'500 following today.
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The sp'500 has a moderately secure short term floor of sp'1810... with high threat of a swing into the 1900s by the end of next week.

It should be clear though, sustained action >2K is completely out of range.

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a little more later..