Friday, 1 April 2016

VIX unable to hold early gains

US equities opened lower to sp'2043, and that resulted in the VIX spiking to 15.28, but with a swift equity recovery to a new cycle high of 2075, the VIX reversed (intra low 13.00), settling -6.1% @ 13.10. Across the week, VIX saw a sig' net weekly decline of -11.1%.





*the opening black-fail candle was yet another early warning that equities were liable to reverse higher, although I sure did not expect them to reverse to new cycle highs.

Suffice to add, with equity prices melting upward into the close, the VIX itself melted lower into the weekend.

Sustained VIX action above the key 20 threshold looks unlikely until the latter half of April. Hyper VIX upside to the 30s, 40s, or even beyond, look entirely out of range until May.

*I remain long the VIX - via TVIX, and despite a disappointing end to the week, my own consolation is that I only need VIX 16/17s for a profitable exit.

more later... on the indexes

Closing Brief

US equities ended the week on a broadly positive note, sp +13pts @ 2072, having swung from an early morning low of 2043. The two leaders - Trans/R2K, settled -0.7% and +0.3% respectively. Near term outlook is extremely borderline, as the equity bulls are set to begin taking out the series of marginally lower highs... or... an epic fail.



*closing hour action: micro chop, but with a notable new cycle high of 2075.

... and another week comes to a close.

April began with the bears being teased in early morning, with a swift reversal, one that held into the weekend.

The levels are clear across the various indexes.

It remains simply a case of whether the bulls can start breaking above the series of marginal lower highs.

2081, 2104, 2116, 2132, 2134

Regardless of the market nonsense..............

Have a good weekend

more later... on the VIX

3pm update - net weekly gains

With no afternoon reversal, US equity indexes are set for net weekly gains. The swing from the morning low of sp'2043 to the 2070s is a major threat to those holding short. Metals remain weak, Gold -$10, with Silver -2.5%, and that is impacting some of the miners. Oil is -3.6% in the $37s, and for now, the equity market just doesn't care.


Nasdaq comp', daily


*the Nasdaq comp' is arguably even more a problem than the sp'500/Dow. A daily close in the 4900s will open the door to a test of the giant psy' level of 5K next week.

Any action in the 5000s, is white flag territory for the remaining big/serious bear money.

notable weakness, airlines, UAL

UAL has put in a micro double top in the $61s.. and appears to finally be following Boeing (BA). First soft downside would be the $55/54s.

...annoying end to the week... urghhhh !

2pm update - Nasdaq in the 4900s

US equities remain moderately higher. Most notable, the Nasdaq comp' which is trading around the key 4900 threshold. Metals remain weak, but well above the earlier lows, Gold -$9, with Silver -2.2%. Oil remains broadly weak, -3.0% as the House of Saud cause further problems.

Nasdaq comp', daily



This is indeed annoying.

Equity bears need to halt this latest nonsense, with a viable turn around 2.30pm. That will give a mere 90mins for a marginal net daily decline.... or at least cool the Nasdaq back below the 4900 threshold.

notable reversal: TSLA, daily

A rather stark black-fail candle, as the model'3 is released, although from what I read, won't actually be available until late 2017.

TLSA won't likely be making any net profit on that model either. The numbers/economies of scale are simply too small.

In terms of near term downside, the 50dma would be a natural target, and will be around the $200 threshold for the next two weeks, which is around 15% lower.

2.30pm.. Its time for the bears to turn things around...

sp +7pts....  90mins.. plenty of time to turn this negative.

.. and yes.. I'm keeping in mind the other scenario.

Considering the opening declines... the setup arguably favours the bears... not that it feels like it.

1pm update - interesting afternoon ahead

US equities are moderately choppy, and despite the recovery from sp'2043 to 2065, there remains threat of latter day weakness, not least as Oil has been entirely unable to rally, currently -3.3% in the $37s.  




As things stand, equity bears need a daily close <2050 to break trend, with VIX >14.75. That is not an overly bold target.

So... lets see if some of the bull-rats start exiting into the weekend.

notable weakness: Ford (F), daily

Ford is one ugly chart. Its been utterly unable to break into the $14s. If the main market does roll lower into the summer, Ford will be 11/10$ stock. The bigger monthly cycle is more suggestive of support in the $8s, but that is of course a long way down.

12pm update - renewed weakness?

US equity indexes are moderately higher, with the sp +2pts @ 2062. It is notable that the Nasdaq is making a third attempt to clear key resistance at the 4900 threshold. Metals remain broadly weak, Gold -$17, with Silver -3.7%. Oil is still unable to recover, -3.0% in the $37s.

sp'daily5 - A1

sp'monthly3c - A1


*... and those will be your last inverse charts for today... normal service resumes at 1pm

I do think monthly3c is usefully provocative, as even the bull maniacs should question at least a 'natural back test' to around sp'1600 this year.. before renewed upside.

As for ongoing equity price action today, its clearly still messy, and if we don't see renewed weakness into the close, it will make for a disappointing end to the week.

I suppose it could be worse.. we could have gapped straight into the sp'2080s on 'goldilocks jobs data'.. and be pushing toward 2090/2100s.

Here in London city...

Hazy skies...  as summer warmth might be just 3-4 weeks away!

time for lunch

11am update - failed break

US equities have already seen a sharp reversal from the early low of sp'2043 to the 2060s, with VIX recovering from an opening high of 15.28, back to the 13s. Metals remain broadly weak, Gold -$18, with Silver -3.1%. Oil is so far unable to recover, -3.1% in the $37s.

sp'60min - A1

VIX'60min - A1


... so... I come back... from a brief retail excursion and I see green indexes.

This is not great...

...and I guess the opening black-fail VIX candle was indeed just another early warning.

Broadly though...  this mornings mess doesn't change anything.. but it does mean the bears have to start all over again.

.. and understandably.. some of the bull maniacs will now be gunning for the sp'2080s.  

time to cook

10am update - down is UP, up is DOWN

US equities open broadly lower (ohh the humanity!), with the sp'500 already in the 2040s. Hourly equity/VIX cycles are offering sp'2040/35 with VIX 15s. Metals are under strong downward pressure, Gold -$13, with Silver -2.8%. Oil is having serious problems, -3.3% in the $37s.

sp'60min - A1

VIX'60min - A1


*opening black-fail candle in the VIX... threatening a bounce.. before renewed downside. In any case, we do have a break of trend in the VIX.

sp'500 has so far bounced off trend.. but still.. the 2030s look a pretty easy target.. whether late today, or early next week.

.. and April has begun.... in favour of the equity bears.

This morning's jobs data was arguably the last best chance for the equity bulls to break the late Dec'2015 high of sp'2081.

Clearly, there is still threat of renewed upside, but there sure are a lot of negative issues this morning.

A sig' daily decline in the 2030s, with VIX 16s now looks viable.. and that sets up 2020/15 - with VIX 18/19s next Mon/Tuesday.

*for the moment, I'm trying to be patient, although with the weekend ahead, I'm somewhat inclined to drop my SPY put block (if we get 2030s with VIX 16s)... but would still hold TVIX-long into next week.

time to shop... back soon!

Pre-Market Brief

Good morning. US equity futures (ahead of the jobs data) are moderately lower, sp -7pts, we're set to open at 2052. USD remains weak, -0.1% in the DXY 94.40s. Oil is -1.5% in the $37s on Saudi chatter about 'no oil deal unless Iran also freezes'.




*awaiting the jobs data at 8.30am

The technical setup favours the equity bears today. Hourly charts offer sp'2040/35, with VIX 15s. Clearly, that is nothing particularly exciting, but its better than trading >2081.

The market is due a retrace, and today would make for a valid excuse, regardless of what the actual jobs number might turn out to be.

notable early mover: TSLA +6% @ $245.. as a new model is released.

Final update from Mr C.


Now here is a product I can issue a BUY recommendation on...

Bullish water. HBW is listed on the .GoT exchange in Iceland.

Overnight action

Japan: -3.5% @ 16164
China: latter day recovery (PBOC ?), +0.2% @ 3009
Germany: currently -2.0% @ 9766.... the 10K threshold is starting to fade away.

Have a good Friday.

8.31am.  Net jobs gains: 215k,   headline rate: 5.0%.

sp  -5pts... 2053

Overall, the number could be considered 'goldilocks'... but the market chatter will likely increase about a rate hike... and that will be a downward pressure on equities.. at least in the short term.

8.52am.. sp -10pts.... 2049.

notable weakness... Gold -$12....    miners.. GDX -2.1%.

Hmm.... bearish start to the month :)

9.05am... sp -13pts... 2046... .  oh noes.....  is it time for QE4 yet?

Bits and pieces to wrap up March

It was a powerfully bullish month for US equities, with the sp'500 +127pts (6.6%) @ 2059, whilst the Transports gained 8.2% to 7944. WTIC Oil +$4.44 (13.1%) @ $38.34. Copper +2.5% @ $2.18. The USD settled -3.7% @ DXY 94.61.


Trans, monthly2

WTIC Oil, monthly'2

Copper, monthly'2

USD, monthly

Looking ahead

Friday will see a wheel barrow of econ-data...

Monthly jobs - market is expecting net job gains of 210k, with a headline jobless rate of 4.9%. That does not seem overly optimistic. The real issue will not be the actual number, but how the market interprets the data. Considering current market sentiment, any 'better than expected' number might be the excuse for equity downside on the notion that another rate hike will be brought forward.

other data: PMI/ISM manu', consumer sent', construction spending.

*since it will be April 1st, beware of ALL stories !

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed into the March/Q1 close, sp -4pts @ 2059 (intra high 2067). The two leaders - Trans/R2K, settled -0.3% and +0.3% respectively. Near term outlook offers a retrace, at least to the sp'2000/1990 zone.


Nasdaq comp'



sp'500: micro chop.. but leaning a touch weak. It is notable that the 200dma is at 2016, with the lower bollinger set to lurk in the 1990/2000 zone across first half of April.

Nasdaq': stuck under the key 4900 threshold.

R2K: a fractional new cycle high, and still a clear 2% from the 200dma of 1141.

a little more later.. to wrap up the month.