VIX climbs for a second day

With US equity indexes closing broadly weak, the VIX managed a second consecutive net daily gain (intra high 15.03), settling +5.4% @ 14.94. Near term outlook threatens a key equity top of sp'2056, with VIX having built a floor in the 13s. First upside target is the key 20 threshold.


VIX'60min

VIX'daily3

Summary

The VIX is starting to offer the first signs that equities have maxed out from sp'2056, with VIX having built a key floor in the 13s.

For the moment, there isn't 'full clarity' via the bigger weekly cycles, but on any basis, the bears are due a retrace to at least the 50dma by early April, and that should equate to VIX around the 20 threshold.

Considering the long weekend ahead, the VIX will be more inclined to melt back lower, into the Thursday close.

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more later... on the indexes

Closing Brief

US equity indexes closed broadly weak, sp -13pts @ 2036. The two leaders - Trans/R2K, settled lower by -0.7% and -2.0% respectively. Considering the 3 day holiday weekend ahead, and the smaller hourly MACD cycle, there is significant threat of renewed upside into early next week.


sp'60min

Summary

*closing hour action: micro chop, and still leaning to the upside.. holding rising trend (at least for the sp'500).
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Broadly, a day of moderate weakness.. but with WTIC Oil breaking below the $40 threshold this afternoon, the normal latter day rally was stunted.

Instead, we have indexes closing near the lows. Not a dire close for the bulls, but it sure ain't pretty for a fair few stocks.

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Yours truly has a 'don't trade into a long weekend rule'. But as some indexes are suggestive we've maxed out at sp'2056, R2K 1103, and Dow 17648 - along with VIX in the 13s, I'm getting damn itchy to get involved.

In terms of price... the indexes are all at prime re-short levels. In terms of time.. we've seen a clear SIX weeks.. which is also more than enough.

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more later... on the VIX
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SPECIAL note...

There is a problem with the DISQUS comments system. It is not specific to this blog/site.. many others across the world are being impacted.

I can receive and reply to comments (via emails/moderation page), but they will NOT appear in the actual post (at least to most users).

I'm sure it'll fix itself soon enough.

3pm update - the master index

The NYSE comp' (the master index as I call it) has had three clear attempts to break and hold above key 200dma. Today's current net daily decline of -0.6% is clearly nothing significant.. but price structure is increasingly weak.. at what is a major aspect of resistance.


NYSE comp', daily

R2K, daily

Summary

*the second market leader - R2K, is also showing issuing a provisional warning sign... having recently got stuck at 1103.. a mere trio of points above what is a very key threshold.
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Oil -4.3%.. unable to hold the $40 threshold. Where is a Kuwaiti oil minister to spread a rumour when we need one?

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Considering the 3 day weekend approaching, one of my personal rules is not to trade into such a break - not least for options for reasons of time decay.

The hourly MACD cycle IS on the low end, and frankly, that ain't exactly enticing me either...and then there is the Yellen next Tuesday.
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updates into the close........ as I've a few bits and pieces I am churning on...
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3.03pm...

sp'weekly6

Six weeks of upside... and we've got stuck at natural declining resistance in the sp'2050s.. with VIX 13s.

The bearish hysteria may begin once we see a blue candle appear.
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3.16pm.. notable weakness... DB,daily

A break of rising channel/trend... not pretty. The 20s look out of range.. even if Oil magically moves back above $40.
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3.31pm... a fair bit of chop in the sp'2030s.. with VIX +5% around 15.  Certainly, its nothing significant yet.. but we might actually have a key mid term top.

notable strength, TVIX +9%, but only in the $5.20s.. which would have seemed a bizarely low level just 2 weeks ago.

....

Q. I don't see any comments via the Disqus system in recent posts?   Is it just me... or I'm guessing.. a temp' problem with Disqus?
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3.41pm.... Clown finance TV guest...

Mr Tom Kloza of 'oil price information service' is touting $50 by year end. That doesn't seem a bold target, but I do hope they bring him back on if WTIC is in the teens this summer.

back at the close................

2pm update - metals and miners remain weak

Whilst the broader equity market remains only moderately lower, there is notable strength in the USD, +0.5% in DXY 96.10s. That is no doubt at least partly responsible for weakness in the precious metals, Gold -$23, with Silver -3.8%. The miner ETF of GDX is lower by a very significant -5.1%.


GLD, daily2

GDX, daily2

Summary

*note how yesterday's closing candle was a black-fail.
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Suffice to add.. a rough day for the gold bugs, not least as most of them have portfolios comprised almost entirely of gold/silver mining stocks.

A retrace of the Dec-March gains appears ongoing, with some way further to go.
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back at 3pm

1pm update - set to cycle back upward

US equity indexes remain moderately weak, with the VIX higher by an arguably lame 2% in the 14s. From a pure cyclical perspective, equities are set to rise for the remainder of the week. Oil remains significantly lower, -3.1%, battling to hold above the $40 threshold.


sp'60min

Summary

Little to add.

Underlying MACD (blue bar histogram) cycle is now on the very low side, and considering the holiday trading conditions, we're likely to start clawing upward.

Oil is battling hard to hold the $40 threshold. Maybe Mr Market wants to wash out some of the sub $40 long-stops, before whipsawing back upward?

In any case.. the $43s still look viable.. but clearly... not this week.

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notable weakness, FCX, daily

Again, its very notable that whenever the broader market is even just a little bit lower, FCX - and much of the other 'junk' gets smashed.

Outlook remains... 'set to disappear'.
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back at 2pm

12pm update - the VIX remains relatively subdued

Whilst US equity indexes remain moderately weak, the VIX is still relatively subdued, only +5% in the upper 14s. For now, the market remains comfortably complacent, and there still seems no realistic opportunity of sustained/significant downside until after the long holiday weekend.


sp'60min

VIX'60min

Summary

A daily close under sp'2030 would be marginally interesting.. yet. .cyclically, both equities and oil are due yet another up wave, one that will probably last into next Tues/Wed.

For the moment, I still can't take any of the current weakness seriously.
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notable weakness.. oil/gas drillers

SDRL, daily

The recent bullish hysteria has been largely negated. SDRL remains on the 'disappear list'.. along with RIG... and many others.

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time for lunch

11am update - price action still favours the bulls

Despite opening lower, ongoing price action remains the same as it has since the Feb'11th low. There is simply no sustained/significant downside, and further upside looks due.. not least if Oil can rally from the current low in the $40s. Metals/miners remain under strong downward pressure.... naturally retracing.


sp'60min

VIX'60min

Summary

Little to add.

I realise some are now top calling again, but price action sure doesn't support it. The fact we have a three day weekend ahead generally bodes for increasingly subdued trading, and that will favour the equity bulls.

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notable weakness, Gold, GLD, daily2

The 114/113s look due.. which would equate to spot gold in the $1200/1180 zone.
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time to cook

10am update - opening weakness

US equities open a little lower, but price action remains broadly bullish. Oil will be a key determinant today, currently -1.9% in the $40s, ahead of the EIA report. Metals are under severe pressure, Gold -$30, with Silver -3.6%.


sp'60min

VIX'60min

Summary

*I will cover the metals/miners in next hour. Suffice to note.. another wave of an ongoing retrace appears underway.
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As for equities, with a long weekend ahead, there is little realistic hope for the bears.

Best guess... further upside (despite lousy inventories) in oil to the $43/44s.. and that should result in an equity exhaustion top.. somewhere in the sp'2060/70s.

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notable weakness... GDX, daily2'

That sure is one ugly open for the miners. A retrace to the low $18s looks due by next week.

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back for the oil report at 10.30am.


10.32am.. EIA.. 9.4 million barrel surplus... another monstrous weekly number.

Oil is holding around the early low of -2.0%.

Equity price action suggestive of a rebound.

Pre-Market Brief

Good morning. US equity futures are a little higher, sp +3pts, we're set to open at 2052. USD is +0.3% in the DXY 95.90s. Metals are significantly lower, Gold -$18, with Silver -2.8%. Oil is -0.8% in the $40s, ahead of the EIA report.


sp'60min

WTIC oil, weekly2

Summary

*note the upper weekly bollinger band for Oil in the $44s. Any price action >$45 looks out of range.
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A daily close in the sp'2060s looks very viable today... not least if Oil can rally, despite another giant weekly inventory surplus. (API report was 8.8 million barrels).

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re: metals. Gold is interesting, back in the $1220s... a natural retrace would be 1200/1180 zone.

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notable early weakness, mining stocks, GDX -2.8%.
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Overnight action

Japan: -0.3% @ 17000
China: +0.3% @ 3009
Germany: currently +1.1% @ 10097.

A break >10k, next level is the 10MA resistance in the 10400s.
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Have a good Wednesday
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9.14am.. Oil -2%.... battling to hold the $40 threshold. Equity bulls should be somewhat concerned.

sp -4pts.. now set to open at 2045.

Gold -$25,  miners really getting smashed, GDX -3.8%.

World equity indexes remain broadly weak

Despite all world equity markets continuing the upward climb from the Jan/Feb' lows, the broader picture remains bearish. Unless the bull maniacs can keep pushing for at least another 3-4 months, the next down wave will inevitably break new lows.


Germany - DAX

Japan - Nikkei

USA - Dow

UK - FTSE

Summary

*I'll cover the world markets in full, the weekend of April 2/3.
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Despite strong March gains, most world markets remain broadly weak, holding within a downward trend that began last spring/summer. Further, most markets are still trading under their respective monthly 10MAs.

For the moment, there is no reason for the bears to capitulate.

Clearly though, any sustained March/April closes above the 10MA, would be suggestive the broader down wave from spring/summer 2015 has concluded.

I want to especially highlight though, I am looking at the world markets as a collective, and trying not to get overly focused on any given national market.

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*it is notable there are just six trading days left of March (for the US market), so equity bears would do well to cool the market from current levels.
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Macro chatter - Mr Long with Mr Rubino




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Looking ahead

Wednesday will see New Home sales and the latest EIA report (10.30am).

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Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed, sp -1pt @ 2049. The two leaders - Trans/R2K, settled lower by -0.8% and -0.1% respectively. Near term outlook offers further upside to the sp'2060/80 zone, not least if WTIC Oil can see a brief surge to the $43/44s. In the next down wave, first soft target will be the 50dma.


sp'daily5

Nasdaq comp'

Summary

The US market continues to regularly break new cycle highs.. and there is currently ZERO sign of a turn/ceiling.

sp'500 - next resistance is the 2060/80 zone. The late Dec' high of 2081 remains pretty damn important, and equity bears really should be desperate for no weekly/monthly closes above there.

nasdaq - next resistance is the 4900 threshold, with a clear gap zone of 4900/5000. Sustained action >5K still looks very difficult.

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a little more later...