VIX continues to cool

With US equities breaking another new cycle high of sp'2046, the VIX was naturally continuing to melt lower (intra low 13.82), settling -3.7% @ 14.44.  Near term outlook threatens the sp'2050/55 zone, which will likely equate to VIX in the 13s again.. before next opportunity of a sustained push toward the key 20 threshold by end month.


VIX'60min

VIX'daily3

Summary

Suffice to add, the VIX is back to levels last seen in early November 2015.. when the sp'500 was in the 2110s.

On any basis, the VIX is now on the extremely low end of the cycle, and there is increasing threat of a new up wave to the key 20 threshold before end month.

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more later... on the indexes

Closing Brief

US equity indexes closed broadly higher for a second consecutive day, sp +13pts @ 2040. The two leaders - Trans/R2K, settled higher by 3.0% and 1.5% respectively. Near term outlook offers the R2K at the 1100 threshold, which will likely equate to sp'2050 before next chance of a reversal.


sp'60min

Summary

*closing hour action: micro chop, with just a touch of weakness into the close, but absolutely nothing to give clarity of a key mid term top.
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So.. a post FOMC gain, with a new cycle high of sp'2046.

Higher oil prices is a primary driver, and Oil itself it being helped via a weaker USD.
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Just reflect on the fact that we're back within 5% of the historic high of May 2015.

Now its a pure case of whether you think...

1. Market pushes to new historic highs into the summer.
2. Doesn't break a new high.. but stays within the 2100/1800s.
3. Maxes out in the near term, and rolls lower... eventually breaking <1810.

Its one of the three.
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Thanks for the messages/emails... makes the day far more interesting!

Have a good evening.
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*more later... on the VIX

3pm update - holding gains into the close

US equity indexes are set to hold gains into the close, with the sp'500 seemingly set for next soft resistance of 2050/55, where the daily upper bollinger is lurking. VIX remains under broad downward pressure, -4% in the low 14s. Metals have notably reversed, Gold -$2.


sp'daily5

VIX'60min

Summary

*Oil is +3.8%.. and that is what is arguably the primary driver of the ongoing nonsense.
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The price in the Dow and sp'500 have been decisively filled.

I realise some are now getting more broadly bullish, even talk of new historic highs.. but unless we see a move much above the late Dec' high of 2081.. I can't see it happening.

Yours truly is now focused on the R2K, seeking a hit of the 1100 threshold, before a viable reversal.
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notable strength.. BA, daily

With big stocks like BA continuing to push.. its hard to argue we won't see further upside.. to at least R2K 1100.
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3.33pm.. R2K surges more to.. 1093... almost at the big 1100 threshold... which now seems due early tomorrow.

2pm update - still battling upward

US equity indexes continue to battle upward, sp +14pts @ 2041, with the R2K +1.1% @ 1086. Another 0.4-0.6% looks probable for most indexes into tomorrow. VIX remains exceptionally subdued, -5% in the low 14s. USD is -1.2% in the DXY 94.70s, and that is certainly helping kick most $ denominated asset classes to the upside.


sp'daily5

R2K, daily

Summary

Suffice to add... it looks like the equity bulls will manage to keep pushing into tomorrow, which is a quad-opex no less.

For the moment... there is zero sign of a ceiling, but we are unquestionably close.

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notable price structure.. TSLA, daily

There are literally 30-40 stocks I'd like to highlight this hour.. but TSLA is a fine example of how things are approaching a break point.

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2.11pm.. well, the 2038/43 gap is fully filled.

Next level is sp'2050.. with R2K likely 1100.


2.14pm.. short-stop cascade appears underway.

2.19pm.. R2K 1089...  sp' 2045...   VIX 13.93

As ever.. a typical turn is approaching... but R2K is still suggestive of 1100, and would now likely equate to sp'2050/55.

1pm update - R2K appears to want 1100

Price structure on the second market leader - R2K, appears bullish, and it would seem the R2K wants to make a play for the 1100 threshold, a level which has been very important across the past five years. If the R2K has another day or two of upside, then it still bodes for the other indexes (at the very least) to hold current levels.


R2K, daily

R2K, weekly

Summary

So.. eyes on the R2K, which right now, is threatening further upside tomorrow.. at least in the morning.

A reversal day for tomorrow's quad-opex?

As things are, the R2K is still swaying me to hold back... even though price levels are already extremely attractive.

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notable weakness... TVIX, daily

I have eyes on TVIX, but I really am doing my damndest to be patient. The lower it goes..the more comfortable I'll be in hitting buttons. Without question, with the VIX already now in the 13s... downside is increasingly limited.
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stay tuned!

12pm update - VIX melts to the 13s

As US equity indexes continue to grind higher (if slowly), the VIX is naturally still melting lower, having now broken to the 13s, the lowest level since Nov' 4th 2015, when the sp' was 2114. Prime resistance zone remains sp'2038/43, with Dow having filled its gap of 17405/425.


VIX'daily

sp'daily5

Summary

So... we have to be close, right?

Its not like the VIX can go much lower, having cooled from 30 to the 13s... with sp'1810 to 2034.
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notable strength, miners, GDX, daily1

The gold miners never did see a proper retrace (much like Gold itself), and we're already pushing to new highs.
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time for lunch


12.30pm.. and here comes the sp'2038 gap zone... with VIX 13.98.  

11am update - the sun is still shining for the bulls

After a moderately messy open, equities are still leaning to the upside. The gap zone of sp'2038/43 remains a natural target before the bear market rally from sp'1810 concludes. VIX remains extremely subdued, -4% in the 14.40s.. pretty incredible.


sp'60min

Summary

Well.... there remains ZERO downside power.. and hence we're back to algo-bot melt mode...headed for 2038/43. Whether we'll see 2050/60s as some believe... difficult to know.

What is clear.. we're due a retrace to the 50dma before end month.

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notable weakness... TVIX, daily

Not surprisingly, as the market continues to grind upward, the leveraged VIX instruments are continuing to melt lower. TVIX is well within my target buy zone, but I ain't touching anything at the moment.

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Here in London city...

Rather nice indeed. Spring can often be short, and summer might be a mere 5-6 weeks away :)

Time to cook !

10am update - messy open

US equities open in a particularly messy manner, as the market seems a little confused as to where it wants to trend today. VIX remains broadly subdued, showing no indication that the market is yet to push significantly lower. Metals are very choppy, with Gold +$2. Oil is helping to hold the market together, +1.5%.


sp'60min

VIX'60min

Summary

So.. overnight gains... pre-market declines, but still managing to open fractionally higher.. only to then swing lower.

For the moment.... it still looks like equity bulls will manage to push upward to the sp'2038/43 gap zone.

The most bearish aspects are in other world markets.. which all look maxed out.
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notable weakness, BAC, daily

Looks maxed out in the $13s.... first target is the big $10 threshold.
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*Awaiting Leading indicators @ 10am...  +0.1% ...
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Meanwhile, on clown TV....

Mr Cashin.. for St' Patrick's day.
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10.05am.. no downside power.... we still look headed UP.

Pre-Market Brief

Good morning. US equity futures are moderately lower, sp -7pts, we're set to open at 2020. The USD continues to price in the notion of fewer rate hikes, -1.2% in the DXY 94.70s. Gold is naturally higher, +$5. Oil is +1.2%, testing the $40 threshold.


sp'60min

Summary

Overnight futures were sp +11pts or so.... close to the gap zone of 2038/43.

**Norwegian central bank cut rates by 25bps to 0.5%. Clearly, everything is fine there too.

**BoE hold rates at 0.5%, but clearly, NIRP looks inevitable in the UK, as they will try to keep the property bubble intact.
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Can we still make it to the 2038/43 zone today? Clearly its still within range, but with each passing hour, its going to be more difficult.

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Update from Oscar



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Overnight action

Japan: sig' gains vapourised into the close, settling -0.2% @ 16936
China: +1.2% @ 2904. Strong resistance @ 3k
Germany: currently -1.8% @ 9807. 10K is starting to fade away.
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Have a good Thursday
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8.30am. notable weakness, DB, -4% @ $18.60...... seemingly maxed out... and headed a long ways lower.

weekly jobs: 265k.
phil' fed: +12.4.. vs prev' -2.8

Another key lower high is due

US equities are set to solidify another key (if marginal) lower high. From the historic high of May'2015 @ sp'2134, we've seen July 2015 @ 2132, Nov'2015 @ 2116, early Dec' 2015 @ 2103, and late Dec' 2015 @ 2081. The series of lower highs bodes powerfully in favour of the equity bears.


sp'weekly8b

sp'monthly1b

Summary

It remains somewhat bizarre how many in the mainstream have seemingly not noticed that the market has been putting in a series of lower highs and indeed lower lows, since last summer.

This is something we haven't seen since the collapse wave of 2007/08.

I'm certainly not yet calling for a complete market implosion this year, but still... the sp'1600/1500s look a relatively 'reasonable' target.


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Looking ahead

Thursday will see the usual weekly jobs, phil' fed, current acc', and leading indicators.
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Getting off the sidelines

With the FOMC out of the way, I'll be looking to get involved tomorrow morning, seeking a short market trade from the sp'2030/40s, with an initial downside target of the 1940/30s. That doesn't seem an overly bold target, and looks highly probable before end month.
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*bonus charts*

Today was kinda busy, and I never did get around to talking about what Oscar highlighted in his latest video. The following chart offers some basic downside targets...

sp'weekly8e

If you agree with the notion of a H/S formation, a simple extrapolation from the neckline, offers the 1600/1500s.

The direct equivalent for the Dow....

... would be somewhere around 12500, which is 4800pts (27%) lower.

Goodnight from London

Daily Index Cycle update

US equity indexes closed broadly higher, sp +11pts @ 2027. The two leaders - Trans/R2K, settled higher by 1.1% and 0.7% respectively. Near term outlook threatens a Thursday gap higher to the price gap zone of sp'2038/43.. before a key top is put in. Sustained action >2040 looks extremely unlikely. First soft downside target is the 1940/30 zone.


sp'daily5

Dow

Summary

Suffice to add, a lot of chop.. but with the Fed touting 'the economy is improving, we'll only need 2 rate hikes'.. the market was comfortably able to hold gains into the close.

However, a key turn looks imminent. Prime area for a reversal is the gap zone of sp'2038/43 - with Dow 17405/425.. which is certainly viable early Thursday.

From there.. first downside target is the 50dma/lower daily bollinger.. in the 1940/30 zone next week.

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a little more later...