Friday 22 April 2016

VIX cools into the weekend

Whilst equity indexes closed moderately mixed, the VIX was broadly subdued, settling -5.2% @ 13.22. Across the week, the VIX saw broke a new multi-month low of 12.50, with a net weekly decline of -2.9%. Sustained action above the key 20 threshold looks out of range until latter half of May.





*the closing hour saw the usual 'games', with the VIX being whacked into the close.

Suffice to add, the VIX remains broadly subdued, although that should not be entirely surprising as equities broke new multi-month highs this week.

Underlying MACD (blue bar histogram) remains deeply negative, and at the current rate, volatility bulls won't see a bullish cross until at least mid May.

*if sp'2050/40s by end of next week/month, that might equate to a VERY brief foray to the upper teens. What should be clear.. sustained action >20 looks out of range for some weeks.

more later... on the indexes

Closing Brief

US equity indexes closed mixed, sp u/c @ 2091 (intra low 2081). The two leaders - Trans/R2K, settled higher by 0.9% and 1.0% respectively. Near term outlook offers pre-FOMC cooling to the 2065/61 gap zone. How the market trades after Yellen is out of the way... very difficult to say.



closing hour action: micro chop.

Price structure remains a bear flag on the hourly chart... offering the 2060s next Mon/Tuesday.

.. and another week in the twisted casino comes to a close.

Despite some cooling from late Wed' afternoon, it has to be called another week for the bull maniacs, having broken new multi-month highs across all the main indexes.

With a new cycle high of sp'2111, the bulls could easily tolerate the 2050/40s next week, even the 1990s (38% fib retrace), without denting the bullish scenario of broad strength across the rest of this year.

Regardless of the market....

Have a good weekend everyone.

*the usual bits and pieces across the evening to wrap up the week.

3pm update - subdued weakness into the weekend

US equity indexes remain somewhat mixed, and the closing hour is set for further mixed chop... leaning a little on the weaker side. With the USD +0.5% in the DXY 95s, the metals are under pressure, Gold -$18, with Silver -0.6%. Oil is 0.2% in the $43s.




Price structure on the hourly equity cycle is offering a bear flag, with renewed downside to the sp'2065/61 zone next Mon/Tuesday.

The ultimate issue is how the market will react to Yellen next Wed' afternoon. Will the market soar back into the 2100s..and push to new highs.. or see further cooling to the lower daily bollinger in the 2050/40s?

Right now, I'm still with the latter scenario.

Even if we do decline post-Yellen, we'll no doubt then bounce again.. and then its a case of whether a lower high <2111 is put in.

back at the close

2pm update - mainstream complacency

Despite an array of lousy earnings, the mainstream remain very confident that US equities will broadly continue to climb in the weeks and months ahead. This is currently reflected in the VIX, which is very subdued in the low teens. Even a brief foray to the key 20 threshold looks difficult.

Nasdaq comp' daily

VIX, weekly


As things are, VIX might manage a fractional net weekly gain, having clawed up from the Wed' low of 12.50.

Even if sp'2050/40s next week, that won't be enough for sustained action above the key 20 threshold.

notable weakness, miners, GDX -2.7%, with Gold -$19, and Silver -0.5%.

Meanwhile.. here in London city....

I'll miss tower bridge.. it was always a favourite of mine.

Full details...

back at 3pm

1pm update - still leaning weak

US equities are pretty choppy, and indeed somewhat mixed as the Trans/R2K battle to stay positive, but current price action favours the equity bears into the weekend.. and early next week. The sp'2065/61 gap zone remains a very realistic target for next Mon/Tuesday.. ahead of the latest nonsense from PRINT central.


Nasdaq comp' weekly


Suffice to add... the sp'500 is pretty close to a net weekly decline...  and we have the tech already sig' net lower.. despite the recent superb earnings from MSFT and GOOGL.

At least SBUX has the right idea, they've already announced an increased stock buyback of another 100 million shares.. that WILL unquestionably solve the underlying global growth problems.

If only other companies acted the same way.. we truly would then live a life of unicorns and rainbows.

yours... approaching the 100% sarcasm threshold.

notable weakness, miners, GDX -3.4%... with Gold -$20, and Silver -1.0%.

GLD, daily

As ever.. those black-fail candles often are warnings.

12pm update - weak chop

US equities remain moderately mixed, with the two leaders - Trans/R2K, moderately higher, whilst the headline indexes - SP/Dow, and particularly the Nasdaq, remain leaning lower. Current price action arguably confirms that the 2065/61 gap zone won't be hit until next Mon/Tuesday.




Clearly, we're still leaning weak.. and headed for the sp'2065/61 zone.. which seems due next Mon/Tuesday. From there.. chop into the FOMC of Wed' afternoon.

Then.. either we see a sustained massive break higher - on a pure market delusion that the Fed can continue to walk the fine line....

or.. the market breaks to the 2050/40s.

*I'm still with the latter scenario... naturally.

A monthly close under the two soft lows of sp'2039/33 looks difficult, and those two lows are increasingly important in the bigger picture.

notable weakness, UAL, daily

Ugly chart... with a clear break of rising trend.

time for lunch

11am update - the weaker Nasdaq

Whilst there is notable moderate strength in the Trans/R2K, there is significant weakness in the Nasdaq comp', currently -1.4%, having lost what remains the key 4900 threshold. VIX has clawed into the 14s, a weekly close in the 15s is just about possible, but more viable next Monday.

Nasdaq comp', daily



Suffice to add.. anyone buying the open is now having something of a problem.

How low do we have to fall until the mainstream start to question if sp'2111 was a mid term high?

notable weakness... CAT, daily

Testing rising trend. Equity bears should be seeking the $73/72s by end month, where we'd probably bounce.

time to cook

10am update - opening chop

US equities open with some mixed chop. The mainstream remain outright bullish, and are clearly still seeking renewed upside in the immediate term, not least as earnings continue to come in superb (esp' in the tech sector). VIX remains broadly subdued in the 13s.




*micro gap in the VIX around 13.40 set to be filled.

Well.. the hourly equity/VIX cycles do favour the equity bulls for a few hours.

However, we did see a key break yesterday, and that will only be negated if we trade >sp'2111.

Best guess... a few hours of chop... but leaning weak into the weekend.

Equity bears should be striving for a weekly close <2080... which would make for a net weekly decline, along with VIX in the 14s.

notable strength... DIS, daily

Indeed, those equity bears seeking renewed broader downside should keep an eye on DIS. Any price action above the 200dma in the $104s would be a sign we'll see sp >2111.

time to shop...

Pre-Market Brief

Good morning. US equity futures are a little weak, sp -3pts, we're set to open at 2088. USD is +0.3% in the DXY 94.90. Metals are mixed, Gold -$3, whilst Silver is +1.2%. Oil is -0.4% in the $43s.



Further weakness (if choppy) seems probable today... with a move into the sp'2070s.

A fill of the 2065/61 gap zone looks more viable next Monday.

early movers...

MSFT  -5.2%
GOOGL  -4.8%
SBUX  -3.5%
CAT -2.4%

Earnings sure aren't coming in so great.

Overnight action:

Japan: late day ramp, +1.2% @ 17572
China: late day recovery, +0.2% @ 2959
Germany: currently -0.4% @ 10390

Have a good Friday

Cooling into end month

With a break of short term trend/support, it would seem the market finally has an opportunity to see the first significant retrace of the sp'1810-2111 wave. The sp'2050/40s seem a realistic target for the April close, which sure would help make the monthly candle much more tolerable for those holding to a broadly bearish outlook.




So... was sp'2111 a key mid term.. or just a short term high?

I'm well aware some were seeking sp'2116 or so, but surely 2111 is high enough to count?

Best guess: a retrace to 2050/40s.. then a bounce.. but putting in a lower high (<2111) in early May. From there... considerable chop, with opportunity of significant/sustained downside in latter half of May.

A May close <1950 would bode critically bearish for June.

Anyway... first things first... lets see how April settles in six trading days time.

USD floored?  weekly

From a MACD (blue bar histogram) perspective, we're ticking upward. A weekly/monthly close above the giant DXY 100 threshold looks a given at some point.. after that... the 120s.

Gold chatter - Mr Long and Mr Rickards

I'm long term bullish the precious metals... and the related mining stocks.

More Gold/market chatter from new daddy... the Schiff


Looking ahead

Friday will see PMI manu'.

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately lower, sp -10pts @ 2091. The two leaders - Trans/R2K, settled lower by -1.2% and -0.6% respectively. Near term outlook offers the 2065/61 gap zone, before some chop into the FOMC of April'27th.




sp'500: the rising trend from the 1810 low is clearly still intact. Equity bears need to see a daily close under the 10MA (2078), before the door is formally open to a basic retrace to around 2040.

Dow: a notable close under the 18K threshold. Equity bears need to see <17400 to have any confidence the market has possibly faked out the bull maniacs once again. To have HIGH confidence, equity bears need a weekly close <17K.

a little more later...