With US equity indexes closing the week moderately higher, the VIX cooled into the weekend, settling -4.9% @ 15.36 (intra high15.93). However, across the week, the VIX saw a net weekly gain of a rather significant 17.2%.
VIX'60min
VIX'daily3
VIX'weekly
Summary
*a notable reversal doji daily candle to end the week... suggestive of renewed VIX upside next Monday.
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Suffice to add, the VIX remains broadly subdued, but it would seem we have a key mid term floor of 13.00 - with sp'2075.
Underlying MACD (blue bar histogram) on the giant weekly cycle is offering a key turn. At the current rate, the VIX will have strong upside potential no earlier than May.
US equity indexes closed moderately higher, sp +5pts @ 2047 (intra high 2060). The two leaders - Trans/R2K, settled higher by 1.1% and 0.4% respectively. Near term outlook offers renewed significant downside next Mon/Tuesday to the sp'2020/10 zone, which should equate to VIX 18s.
sp'60min
Summary
Closing hour action: continuing weakness, with most indexes turning (if briefly) fractionally red, with a micro up wave in the closing minutes.
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This morning's high of sp'2060 was almost as annoying as the Wed' afternoon high of 2066.
What should be clear... the bull maniacs are increasingly less likely to buy, and this market is looking increasingly vulnerable in the weeks and months ahead.
For the super cautious bears out there, we now have another lower high of 2060, and might not be trading that high for a long.... long time.
- I hold short across the weekend, seeking an exit in the sp'2010s, with VIX 18s.
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Have a good weekend
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*the usual bits and pieces to wrap up the week.. across the evening
Despite the current gains, all US indexes are set for significant net weekly declines. Near term outlook still offers another push lower to at least the sp'2020/10 zone - where the 200dma is lurking. Oil has truly bizarre gains of +5.7% in the $39s.
sp'weekly1b
VIX'60min
Summary
*were it not for Oil, this market would be in the sp'2030s right now.
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Little to add... in what has been a week of rather annoying swings.
As things are... the setup for Monday looks bearish, and I'm content to hold across the weekend.
US equity indexes are starting to turn negative - lead by the Nasdaq comp', with a net daily close in the sp'2030s - with VIX 16s, well within range. Renewed significant downside looks probable next Monday to the sp'2010s - with VIX 18s.
sp'daily5
VIX'daily3
Summary
*I am battling to not get lost in the minor noise of the smaller cycles.. and stay focused on the bigger daily/weekly.. even monthly cycles.
With the day to day swings, its proved to be a tough challenge this week.
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US equities continue to cool from the morning high of sp'2060, with a new intra low of 2046. A weekly close in the 2030s - with VIX 16s, appears increasingly viable.. if not probable. If that is the case, Monday should see renewed significant weakness, at least to the 200dma in the 2010s (with VIX 18s).
sp'60min
VIX'60min
Summary
Little to add.
Its now merely a case of how we close the week.
What should be clear, 2075 looks increasingly secure, with a new soft high of 2060.
Lets see if we can break back into the 2030s this afternoon.
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With a new soft lower high of sp'2060 - with VIX 14.84, we're seeing renewed weakness as the bull maniacs are simply unwilling to buy at these levels. A marginal net daily decline in the sp'2030s - along with VIX 16/17s, would be a real shock to the mainstream who remain in outright denial about the style and structure of price action since the key high of May'2015.
sp'60min
VIX'60min
Summary
Things are starting to get interesting again :)
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There are black-fail daily candles starting to appear all over the place...
US equities are moderetely higher, and it remains the case, that either the market will take out the Wed' high of 2066.. or merely see another failure, and resume lower. A basic retrace to the 2020/10 zone - where the 200dma is lurking - along with VIX 18s, continues to remain within reach.
sp'60min
VIX'60min
Summary
Q. A near term break above sp'2066, or holding below?
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For the moment, we're seeing a clear reaction from sp'2060..... as no one wants to buy any higher.
A weekly close <2040 - a threshold that has been pretty important across many weeks... arguably even a year or more... would be useful.
US equities open broadly higher, unquestionably helped by Oil +4.6% in the $38s. VIX is naturally back in cooling mode, -6% in the low 15s. A net daily decline still seems probable... but a weekly close in the sp'2020s - with VIX 17s, look out of range.
sp'60min
VIX'60min
Summary
Once again, it now comes back to your underlying viewpoint.
Is the market....
1. Going to broadly climb.. to new historic highs.
or..
2. continued chop.. but with lower highs.. and lower lows.. in the weeks and months ahead.
Best bearish case for today is a weekly close in the sp'2039-35 zone... with VIX 16.25/16.50.
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notable weakness, TVIX, daily
An ugly start to the day, a weekly close in the $5s sure won't be easy.
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yours truly is holding short, I expect better levels later today.
Good morning. US equity futures are moderately higher, sp +11pts, we're set to open at 2052. USD is +0.1% in the DXY 94.50s. Metals are cooling, Gold -$8, with Silver -0.1%. Oil is +3.3% in the $38s.
sp'60min
Summary
So, we're set for an annoying open.... back in the 2050s.
Such gains will be highly vulnerable to fading, and I expect a net daily decline.
Unless we close <2025... I will hold short across the weekend, and wait for a better exit on Monday.
What will you do, when the sp'500 is in the 1600/1500s?
What will you do when the VIX is looking spiky in the 50/60s ? If you
continue to short.... what will you... become?
sp'monthly3d - double top
sp'weekly8e - 'failed head test'
Summary
(yeah, I'll use any excuse to drag Star Wars into a post)
Okay.. first... it will still take some weeks before there is high clarity that sp'2075 is another in the series of 'marginally lower highs' from May'2015. For now.. things are looking okay, but after the current initial retrace is complete... we'll need to see the market bounce, but again fail to break a new high.
re: monthly3d. The ultimate issue - since summer 2013, is that the market will want to eventually back test the 2000/2007 double top resistance (now support) around sp'1650/1550.
Serious trading implications
There will be EXTREME risk the market will floor, and then begin a new multi-year ramp - whether based on further QE, a switch from bonds to equities (as Armstrong et al suggest), or a result of huge capital inflows from desperate investors (trying to find financial sanctuary) across the globe.
What am I planning?
If by some semi-miracle, I can trade the market from the sp'2000s to the 1600/1500s... I'd implement a 5-10% max short rule once sp'1600s.
I'd only feel comfortable re-ramping shorts if I saw a monthly close in the 1400s, which would offer further significant downside to the 1100/1000 zone.
For now... the latter downside zone remains fantasy land for the doomer bears, and I honestly don't think we'll fall that far.
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re: weekly8e
First, note the current blue candle... initial sign of a turn.
There is a valid H/S formation on most indexes, and unless the bull maniacs can break above sp'2116 (Dow equiv' 17977)... the 'failed head test' is a valid argument - as lead by Oscar Carboni.
From a pure risk/reward standpoint, we have one of the best setups in many years. Whether a trading stop at sp'2075, 81.. or even 2116, the risk is relatively minor, verses potential downside of around 25%.
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Looking ahead
Friday will see Wholesale trade data (10am).
*Fed officials Dudley and Kaplan are on the loose, but I'm inclined to believe the market will be more focused on other things, not least the Yen.
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As for the next Star Wars movie - Rogue One, just from the teaser, it looks pretty damn good.
US equity indexes closed significantly lower, sp -24pts @ 2041. The two
leaders - Trans/R2K, settled lower by -1.3% and -1.4% respectively. Near
term outlook offers the 2020/10 zone, before a likely bounce back to
2040/50. More broadly, the April 1'st high of sp'2075 is increasingly
looking like a secure mid term high.
sp'daily5
Dow
Summary
Suffice to add, the Wednesday gains were fully negated, and that bodes in favour for further downside this Friday.
The 200dma of sp'2014 is a very valid target tomorrow, before yet another bounce.. which would likely be within the 2040/50s.
