A fifth weekly VIX decline

With equities broadly climbing for a fifth consecutive week, the VIX was naturally still in cooling mode (intra low 13.75), settling the day -2.9% @ 14.02. Across the week, the VIX saw a very significant net decline of -15.0%.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Suffice to add, the VIX has now cooled from the Feb'11th high of 30.90 to the 13s.. pretty incredible.

On any fair basis, the VIX is now on the extremely low end of the cycle, and it seems just a matter of when it'll see renewed upside to test the key 20 threshold.
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*I'm still seeking to be long VIX - via TVIX. For the moment, I'm holding off on the notion that WTIC Oil is headed to the $44/45s next week, and that would likely equate to sp'2070/80, with VIX remaining pinned in the low teens.. if not briefly 12s.
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more later... on the indexes

Closing Brief

US equity indexes closed moderately higher, sp +8pts @ 2049 (intra high 2052). The two leaders - Trans/R2K, settled higher by 1.4% and 0.9% respectively. Near term outlook threatens further Oil upside to the $44/45s, and that might equate to sp'2070/80 zone, before next opportunity of a rollover.


sp'60min

Summary

*closing hour action: a lot of minor chop, but yet again... leaning on the upside, arguably aided by comments from Bullard.
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...and another crazy week comes to an end.

Clearly, the bull maniacs, and indeed, many of the bears have now capitulated, with the market having climbed from 1810 to 2052.

Everything is fine now, right? Or maybe... not so much. I still expect the coming spring and summer to offer much lower levels.

Have a good weekend

yours... watching and waiting

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*the usual bits and pieces across the evening

3pm update - a fifth net weekly gain

Regardless of any cooling/chop into the quad-opex close, the sp'500 is set for a fifth consecutive net weekly gain. For the moment, there is still no sign of the market maxing out. With WTIC oil now set for the $44/45s, the bull maniacs still have a viable 20/30pts further to go... to the sp'2070/80 zone.


sp'weekly1b

Summary

Suffice to add...  from a bearish perspective, it looks pretty scary... but then, we did see an equally powerful ramp last Sept-Nov'.

*relative to oil, currently -0.6%.. equities are holding up pretty well.

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notable weakness, Transocean (RIG)

An ugly daily chart.. a clear break of trend, and RIG is starting to unravel, having never quite been able to re-take the 200dma. RIG remains on the 'disappear list'.
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*I was just reminded via poster Binkius, we have Fed official Bullard due to speak at 3pm... and Mr Market will no doubt keep an eye on any press release of prepared remarks, and a subsequent Q/A.

Broadly though... market looks set to churn into the close.


3.02pm.. Ahh, here we go...

... and Bullard is issuing the usual threats of QE and NIRP, even arguing that the adverse effects of NIRP are overdone.

NIRP won't cause any distortions or problems in the economy, right?
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3.17pm.. Renewed upside.. sp'2051...  upper hourly bollinger is offering the 2060s... but is surely out of range until early Monday.

In any case.. price action continues to favour the bulls... with the VIX melting back into the 13s.

2pm update - increasingly choppy

The sp'500 has cooled a little from the earlier high of 2052.. along with VIX clawing back upward from the new cycle low of 13.75. Oil is not helping, having swung from +2.0% to -0.4%... although the $44/45s look a very valid target next week. USD is +0.3% in the DXY 95.00s.


sp'60min

Summary

At the current rate, we'll see a bearish MACD cross in the closing hour.. or at the Monday open. It does bode slightly in favour of the bears.

Yet.. price action is little different than across the past few weeks. There is no sig' downside power right now.

If you believe Oil will manage to continue clawing upward to next resistance in the $44/45s, then it is reasonable to assume equities will at least 'hold together' until such time.

On that basis, I'm still holding off... although when I see things like TVIX jump from $5.28 to $5.53 in just a few hours, it does make me twitchy.

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notable weakness... CAT, daily

Having climbed from the $56s (Jan 20th) to today's $76s... CAT is really starting to look tired. The underlying economic problems in the mining/energy sector remain key.. and CAT looks vulnerable.

1pm update - lunch time pumping

US equities continue to hold moderate gains, with the sp +8pts @ 2048. The VIX remains under strong downward pressure, -3% in the 13.90s. Metals are increasingly weak, Gold -$4, with Silver -0.9%. Oil has swung from sig' gains of around 2.0%, currently -0.2%.


sp'60min

Summary

Little to add.

Clearly, the hourly MACD equity cycle is on the high side.. and starting to tick lower.

Broadly, another push higher looks due next week.. not least to be 'inspired' via higher oil.

See the latest post by Armstrong, who also mentions the $45 target I've been babbling about since yesterday.

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As for the pumping...

ARRS, 5min

You do NOT get a prize if you can guess at what time a fund manager appeared on clown finance channel'1 (aka, CNBC) to tout his new prized holding of Arris Intl. (ARRS).

Good work if you can get it, right?
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back at 2pm

12pm update - weekly gains and declines

US equities continue to hold moderate gains. Regardless of any choppy cooling into the quad-opex close, all US equity indexes are set for another weekly net gain. VIX is natural set for a fifth consecutive net weekly decline. Cyclically, we're unquestionably very close to a turn.


sp'weekly1b

VIX'weekly

Summary

Little to add.

Today is behaving largely as expected, particularly the VIX, which looks in classic pre-weekend melt mode.

For the moment, there still seems little reason to get involved on the short side, not least as Oil looks set for 44/45s next week.

It is notable that there are just 8 full trading days left of the month. If we're in the sp'2060/80 zone next week, it is going to be a race just to break back under the 2K threshold.

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Here in London city...

Not a great day to conclude the week, but still.. another day closer to spring.
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time for lunch

11am update - holding gains

US equity indexes are holding moderate gains, with the sp'500 having hit a new cycle high of 2050. The second market leader - R2K, has battled to 1101, and it is notable that the 200dma is still almost 5% higher. VIX remains very subdued in the low 14s.. a weekly close in the 13s looks probable.


sp'daily

R2K, daily

Summary

Little to add.

For the moment, the trend remains to the upside.

WTIC Oil looks set for the $44/45s next week, and that surely means the broader market will push at least another 0.5-1.5% higher.

Clearly, this is getting beyond stretched, but for the moment, I'm still holding off.
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notable strength: BAC, +2.8%.. although broadly, the financials remain struggling... not least as rates look increasingly under downward pressure.

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back at 12pm

10am update - opening gains

US equity indexes open moderately higher, with a new cycle high of sp'2049. VIX is naturally subdued, -2% in the low 14s. With the USD fractionally higher, the metals a touch weak, Gold -$3, with Silver -0.1%. WTIC Oil is holding sig' gains of around 2%, with the May contract in the $42s.


sp'60min

VIX'60min

Summary

*consumer sentiment: **
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It is notable that the R2K has hit the 1100 threshold.

So.. yet another new cycle high, as unquestionably, Oil is helping push the market higher. As many recognise though, the higher oil goes, the less likely supplies will be cut... and indeed, likely to be brought back online.

Equity bears look out of the picture until Oil stops rising, and it does now seem WTIC will at least reach the $44/45s next week.

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notable strength: BA, daily

A mere $1 away from the 200dma.. having soared from the Feb' low of $102. That is a pretty insane ramp for such a giant industrial.
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stay tuned

Pre-Market Brief

Good morning. US equity futures are moderately higher, sp +4pts, we're set to open at 2044. USD is +0.2% in the DXY 94.90s. Metals are cooling, Gold -$5. Oil is +1.5% in the $42s, with next resistance of $45.


sp'60min

WTIC oil, weekly2

Summary

*The sp'500 is set for the fifth consecutive net weekly gain. Whilst the Transports - 'old leader', is set for the ninth weekly gain, the best run since March-May 2009
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As for today, it'd seem we'll break new highs, with sp' 2050s, and R2K 1100s. VIX looks set to remain subdued, and will probably settle in the 13s.

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Update from Oscar



It is interesting to see that Mr C is still warning about the viable 'failed head test' of what is a large H/S formation for most equity indexes. Technically, so long as we don't go above the Nov'2015 high of 2116, the bearish formation is intact.
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Overnight action

Japan: broadly weak, -1.2% @ 16724
China: solid gains, +1.7% @ 2955.
Germany: currently +0.3% @ 9921.
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What am I doing today?

Well, not only am I now seeking R2K 1100s, but I'd prefer to get involved once Oil is in the $44/45s. Clearly, the latter is out of range today, so I'm still in waiting mode. Call it overly cautious if you like, but the higher we go, the safer the next short trade shall be.

Have a good Friday

USD continues to cool

With the Fed indicating there will only be two.. if not just one interest rate rise this year, the king of FIAT land - the USD, fell for a second day, settling -1.2% @ DXY 94.81. Near term outlook threatens the 90 threshold, before resumed upside. The 120s look highly probable.. eventually.


USD, weekly

USD, monthly

Summary

Suffice to add... USD has been tainted by the Fed (whether intentionally or not), and is currently under a great deal of downward pressure as hopes of a series of rate hikes have faded.

Broadly, the Euro and Yen look 'toast', and I find it impossible to believe that the USD won't eventually break back above the DXY 100 threshold, and onward to the 120s.
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Market/econ chatter from Schiff



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Looking ahead

Friday will see consumer sentiment data.

It will be quad-opex, so expect increasingly choppy, and dynamic price action in the late afternoon.

*there are 3 fed officials on the loose. Most notable, the bane of the equity bears - Bullard, due to speak at 3pm.
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Goodnight from London

Daily Index Cycle update

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'daily5

Dow

R2K

Summary

*price structure in the second market leader - R2K, is a pretty bull flag, and was confirmed today, which bodes for a move to the 1100 threshold tomorrow morning.

A very valid question is whether the R2K is going to be able to make it to its 200dma in the 1150s. If that is the case, it'd bode for sp'2070/80s.

As ever, what will especially matter is the monthly close, not just for equities, but also Oil. Those equity bears seeking broader downside into the spring/summer, should arguably be seeking a March close back under sp'2K, with Oil <$38.

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a little more later...