Volatility on the rise

With US equity indexes broadly weak, the VIX was back on the rise (intra high 14.76), settling +6.5% @ 14.08. Near term outlook offers a basic target of VIX 16s, but the 18/19s look viable if sp'2040s this Thurs/Friday. Sustained action above the key 20 threshold still looks out of range for some weeks.


VIX'60min

VIX'daily3

Summary

Suffice to add, despite a third net daily decline of the past four trading days, the VIX remains broadly subdued.

Even a move to the upper teens would likely be very brief, before renewed cooling in the first week or two of May.

The VIX 25/30 zone looks out of range until late May.

Hyper VIX upside to the 40/50s is clearly out of range until June.. .the month of the BREXIT vote.
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more later... on the indexes

Closing Brief

US equity indexes closed broadly weak, sp -3pts @ 2087. The two leaders - Trans/R2K, settled lower by -1.2% and -0.7% respectively. Near term outlook offers increasingly dynamic price action, with a very realistic decline to the sp'2040s - along with VIX spiking into the upper teens.


sp'60min

Summary

*closing hour action: micro chop... leaning slightly to the upside.
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Certainly, not the most exciting of starts to the week, but then, with each hour closer to the FOMC announcement (Wed' 2pm).. the market is increasingly inclined to move into a holding pattern.

The lower gap zone of sp'2065/61 remains a starter target for the bears, and frankly.. considering the daily/weekly MACD cycles.. a move to the 2040s looks realistic for the weekly/monthly close.

I see just a few out there talking about the 2030/20s in the near term.. and I'd agree, those levels look a stretch, even given a few days into early May.

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more later... on the VIX

3pm update - net daily declines

Most US equity indexes are set for the second net daily decline of the past 4 trading days. Price action remains relatively subdued, but will likely become increasingly dynamic across the rest of the week. The daily/weekly cycles increasingly favour the equity bears.


sp'daily3

sp'weekly2

Summary

... a basic retrace to the sp'2040s looks very realistic in the near term.

Other than that.. we have a notable blue candle on the weekly 'rainbow' chart.

.. for now.. there is little else to add.
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notable weakness....

FCX -4%
RIG/SDRL, both lower by -5% or so.
NFLX -2.9%

strength: DIS, +0.7% in the $104s.

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back at the close.

2pm update - moderate chop

US equities have seen a minor up wave from the earlier low of sp'2077 - with VIX 14.76. VIX remains on the climb, the 16s look a very realistic target this week... if not the 18/19s... very briefly - with sp'2040s. Metals are holding minor gains, Gold +$5, with Silver +0.1%.


sp'daily5

VIX'daily3

Summary

Suffice to add.... we sure ain't net higher right now... and the daily/weekly cycles continue to swing in favour to the equity bears.

There are some notable downside risks across this week.
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time for a late dinner.... back at 3pm

1pm update - sunshine and showers

US equities remain broadly weak, but there is still a lack of any underlying significant downside power. This is entirely reflected in the VIX, and despite being +9%, is only in the 14s. With the USD -0.4% in the DXY 94.70s, metals are holding moderate gains, Gold +$7, with Silver +0.5%.


sp'60min

GLD, daily

Summary

re: Metals: gold and silver are always going to be helped via a weaker dollar. One of the big questions for the coming summer, can Gold break and hold above the $1300 threshold. If it can... then the 1400/1500s will occur, and that has rather hyper bullish implications for the related mining stocks.
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notable weakness, NFLX, daily

After the big earnings drop.. now its a case of downside melt mode... support at 90.. and then $80. If you believe the main market is headed lower into the 1900s (at least).. then NFLX is an $80 stock.
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Here in London city...

Super fresh greens

Bullish English Oak

A rather typical spring day of sunshine and showers, and in just 2-3 weeks, London city will arguably be looking its best.

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time to cook....

12pm update - eyes on the two leaders

The US equity market remains broadly lower, although clearly.. nothing particularly significant yet. The two leaders - Trans/R2K, are currently -1.5% and -0.8% respectively. Both are highly vulnerable to breaking rising trend/support this week, which would equate to sp'2050/40s, with VIX spiking into the upper teens.


Trans, daily

R2K, daily

Summary

For now, things remain pretty subdued, but I do think the two leaders are something we should be keeping in mind across this week.

First key level on the Trans is around 7800... and for the R2K.. 1100.
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notable weakness... oil/gas drillers, RIG, daily

A broadly ugly chart... having utterly imploded since summer 2014. Recent price action is merely indicative of more exhaustion on the upside.. but making just another lower mid term high.

RIG remains on my disappear list... not least as industrial - and commodity, capitulation still has not occurred.
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time for some sun... or rain.

11am update - remaining weak

US equities remain moderately weak, with the sp' having broken to 2078 - with VIX 14.76. The daily/weekly cycles are offering the 2040s - with VIX 17/18s, into the monthly close. With slightly twitchy capital markets, the metals are back on the rise, Gold +$6, with Silver +0.4%. WTIC Oil -1.1% in the $43s.


sp'daily5

VIX'daily3

Summary

Equity/VIX price action is increasingly swinging in favour to the equity bears.

It is now merely a case of how we close the week/month.

*marginally amusing to see the cheerleaders on clown finance TV already getting a touch twitchy. How many days until they start asking 'was sp'2111 a key mid term high?'

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notable strength, DIS, daily

Despite the somewhat weak main market, Disney is making a serious play to break above multiple aspects of resistance in the $104s. A daily close in the $105s should spook the bears.. and open up the 112/114 zone.

10am update - opening weakness

US equities begin the week moderately weak. Further declines to the gap zone of sp'2065/61 - with VIX 16s, looks more viable after the Wed' FOMC. The real issue is whether the equity bears can at least attain a fractional net monthly decline (<2059).


sp'60min

VIX'60min

Summary

*bear flag on the equity chart... confirmed.
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Typically, today will be the more dynamic day - relative to Tuesday, which is typically pretty subdued ahead of an FOMC announcement.

In any case... sp'2111 is now 29pts to the upside....    for the bears... its a start.

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notable weakness, DB, daily

Not exactly the most bullish start to the week. A break under the 50dma in the $17s looks probable.

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stay tuned

Pre-Market Brief

Good morning. US equity futures are moderately lower, sp -5pts, we're set to open at 2086. USD is -0.4% in the DXY 94.70s. Metals are slightly mixed, Gold +$1, whilst Silver -0.1%. Oil is -1.0% in the $43s.


sp'60min

Summary

A pretty important week is set to begin.

Equity bears need (at minimum), to hold the market from breaking above the recent high of sp'2111

Preferably.. a weekly/monthly close in the 2060s... if not the 2050/40s.

Price action in the 2030s or lower looks out of range in the current cycle, until around mid May.
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early movers...

CHK -1.2%
FCX -1.4%
DB -2.9% in the $18.30s.

*pre-market VIX is showing +8% in the 14.30s.
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Overnight action

Japan: moderate weakness across the day, -0.8% @ 17439
China: -0.4% @ 2946. A monthly close <3K looks probable.
Germany: currently -0.8% @ 10289... an April close under the 10K threshold would be especially useful to the bears.

.. and a rather bizarre end to ep'1 of season'6 of Game of Thrones.
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Have a good Monday