Thursday 28 April 2016

VIX climbs into the close

It was a very mixed day for the VIX, which saw an opening reversal/black-fail candle, with the VIX then rapidly cooling to a low of 13.30. However, with significant equity weakness into the close, the VIX rebounded, settling +10.5% @ 15.22. Near term outlook offers the sp'2060s, which will likely equate to VIX 16s.




For those involved in the VIX, today was a real damn mess. Not only did the VIX see a classic opening reversal - as reflected in the equity market, but the VIX almost broke into the 12s !

As things are, the equity bulls look tired, and were clearly unwilling to buy into the sp'2100s, with the VIX strongly rebounding as equities rapidly cooled into the close.

What should remain clear, sustained action above the key VIX 20 threshold looks out of range until the latter half of May.

more later... on the indexes

Closing Brief

US equities closed on a particularly negative note, sp -19pts @ 2075 (intra high 2099). The two leaders - Trans/R2K, settled lower by -1.5% and -1.2% respectively. Near term outlook offers the 2060s, a break under the two soft lows of 2039/33 will very difficult.



*closing hour action: increasing significant weakness... breaking a new intra low of 2071 - 28pts (1.4% from the lunch time high).

Notably holding the rising trend/support from the 2033/39 lows.

Well, that was one hell of a twisted day.. and without question it remains a NASTY market.

The gap zone of sp'2065/61 looks a viable target into the weekly/monthly close. Yet.. that will be small consolation to the equity bears after recent price action.

Have a good evening.. especially to those watching 'the big short'.

*awaiting earnings from AMZN...

4.13pm.. AMZN earnings much better than the market expected... with the stock +11% in the $670s.

Ironically.. its notable that even with EPS of just over $1 for Q1..  if you x4.. then gives $4 a year, making a PE of around 150/160.

What a bargain huh?

more later... on the VIX

3pm update - moody sky to end the day

US equities are increasingly weak, as the bull maniacs have been unable to re-take the sp'2100 threshold. Price structure remains a clear bear flag, with natural downside to the sp'2060s - which would likely equate to VIX in the 16s. Meanwhile... the comedy resumes in AAPL as Icahn has made a run for the exit door.




So... we're clearly leaning on the weaker side into the close.... but that doesn't really negate this morning's utterly lame reversal.

Frankly, even if we settle the week/month in the sp'2060s tomorrow, it should not particularly please the bears. I can't be remotely confident again until I see a daily close in the 2020s.

notable weakness... AAPL, daily

Icahn proudly announces on clown finance TV that he has entirely exited his AAPL position. For around 2 years, Icahn has touted AAPL well into the $200s.

*the bigger monthly cycle is offering $70... if the main market does rollover into the summer.

Here in London city...

Moody skies... favouring the bears.

3.12pm.. Equity bear flag... confirmed... with the VIX backing it up.

So... 2060s by end Friday... probably.

3.18pm... re: AMZN, earnings due at the close...   daily

Best guess.. downside to the $540s....   price structure could be argued is a giant H/S.... which would suggest $300... and yes.. I realise the latter would be seen as beyond 'crazy talk'.

yours bearish retailers with fractional/zero profit margins.

3.25pm.. the recent low of 2077... clearly broken... with VIX 15s.

The cheerleaders on clown finance TV are trying not to appear too spooked right now.. as AMZN earnings are due.

notable weakness... AAPL -3.5% in the $94s.... things only get interesting with sub 90.

3.28pm.. market finding a touch of support on the trend from 2039/33... .at 2072....

Equity bears REALLY need to push for <2072.....

3.35pm.. Well.. this is one way to end the day I guess....  VIX +11% in the mid 15s.

More important.. the fact we've seen a FULL reversal of the morning reversal... that IS bearish for tomorrow.. and arguably into next week. 

3.42pm.. so far.. rising trend from 2039/33 is holding.... which is somewhat annoying... but less annoying than a close in the 2100s

VIX +9% in the 15s.... somewhat better than 13.30.

2pm update - trying to rollover

The hourly equity/VIX cycles are swinging back in favour of the equity bears. Even if (by some miracle) the market still manages a weekly close in the sp'2060s, it will not negate this morning's utter nonsense, which was a fierce reminder of just how twisted this casino remains.




The equity hourly MACD (blue bar histogram) is clearly starting to tick lower, and it would seem the bull maniacs are not going to manage the 2100s today.

Clearly though... even a close in the sp'2080s is small solace after the relative horror of the opening reversal.

notable strength.... metals.. with the related miners,.. GDX, daily

GDX has almost doubled up since the Dec'2015 low in the $12s... and that is with Gold still only in the $1200s.

For those watching 'The Big Short' tonight... (a movie I'd recommend to anyone)...

Margot Robbie can explain ALL the financial problems.

yours.. bullish bubbles.

back at 3pm

1pm update - are we done?

US equities remain in minor chop mode, with the sp'500 still unable to re-take the 2100 threshold. With the USD -0.5% in the DXY 93s, there is notable strength in the precious metals, Gold +$17, with Silver +1.7%. Naturally, the related miners are following, the ETF of GDX +4% in the $24s.




From a pure cyclical perspective, we're set to resume cooling for the remainder of today.

A daily close under the morning low of sp'2086 will not be easy...  and neither will VIX 15s.

Price structure IS a bear flag.. and will only be negated if >2105.

notable reversal/cooling from the open.... FB, daily

A clear black-fail daily candle... with a spiky top. I am no fan of the FB... and I shall refrain from launching into a tirade about this 'company'.

stay tuned

12pm update - trying to break into the 2100s

With a bizarre lack of downside pressure, the equity bull maniacs are getting yet another opportunity to break into the sp'2100s, and its notable we are currently a mere 0.6% from breaking the recent key high of 2111. With the VIX -3% in the 13.30s.... we're arguably close to max bullishness.




So... just what the hell can be said about this morning?

Even the opening declines were a warning that the market is still very resilient. The fact the opening hourly/30min candles were a hollow red reversal (equity).. and black-fail (VIX).. were classic signals.

For now... its beyond tiresome.

Yes, price structure REMAINS a big bear flag.... but that of course is entirely negated on any move >2111.

Even a move to the 2060s will do nothing to offer any real hope to the bears. For 'hope'... bears need a daily close in the sp'2020s... and right now.. that may as well be 1000pts lower.

yours... in the trenches... covered in radioactive mud

time to cook

11am update - garbage market

US equities having broadly recovered the opening moderate declines... with the sp' already making a play to break back into the 2100s. VIX has naturally turned fractionally lower, into the mid 13s. Metals are notably strong, Gold +$11, with Silver +0.7%.




*it the typical turn time of 11am.... but still... after this mornings opening 90mins, I'm inclined to dismiss anything today.

Without question, this is one of the lamest mornings for those in bear land in a very long time.

Despite Japan getting trashed, and weak US growth data, the market is still able to just shake it off.

Price structure remains a bear flag... but even if we roll lower to the 2060s late tomorrow/early next week, it will merely offer another higher low (from 2039).

I can NOT take any of this seriously unless we break under the two soft lows of 2039/33.. with a daily close in the 2020s.

notable weakness... KMI,daily

Kinder remains broadly stuck... vulnerable to the 16/15s...  negated on any move into the 19s.

time to shop... back soon

10am update - opening mess

US equities open moderately lower to sp'2086, but it should be clear, there is still a total lack of downside power. Price structure is a clear bear flag, and its notable that the market is still holding within it. VIX remains very subdued, with a very clear black-fail candle... which sure doesn't bode well for the bears.




All things considered, equity bears can again feel justifiably dismayed and outright pissed at this open.

Whilst Japan effectively imploded, and most EU markets are lower by a clear -1% or more.. the US market already has some indexes net higher.

Yes... a long day ahead... but for now, this is the sort of open that will see some justifiably turn off their screen and not return until next month.

notable weakness... INFN, daily

A disasterous open.... and hell, even if the main market remains strong... INFN looks set to go sub $10 this summer.

10.08am.. sp'500... positive...  VIX... negative.

.. but hey... growth of 0.5% is good news.. yes?    

Pre-Market Brief

Good morning. US equity futures are moderately lower, sp -11pts, we're set to open at 2084. USD is -0.6% in the DXY 93.80s. Metals are on the rise, Gold +$11, with Silver +0.9%. Oil is +0.1% in the $45s.



So.. the BoJ upset the cart overnight by not spinning the PRINT machine any faster. It seems they want to wait until after the G7 in late May.

As for US equities, it looks like the big bear flag will play out. First downside target remains the 2065/61 gap zone by the Friday/monthly close.

Things really only get interesting on a break under the two soft lows of 2039/33. Frankly, that seems out of range until late next week at the earliest.

early movers...

FB +10%... on earnings hysteria
INFN -16%... earnings ?

Overnight action...

Japan: strong downside,  -624pts (3.6%) @ 16666

* the following chart does not include last nights decline, but its useful to see...

So, with one trading day left of the month, the Nikkei is now fractionally lower for the month... and remains within a clear downward trend from last summer.

China: latter day recovery, -0.3% @ 2945
Germany: currently -1.2% @ 10175

Have a good Thursday

8.35am.. GDP: 0.5% growth... a little below consensus.... some could justifiably argue the number will get revised fractionally negative in May/June.

sp -13pts... 2082.

8.43am... re: AMZN. The chart (will highlight later) for the past year ain't so pretty. Earnings are due at the Thurs' close... and are worth keeping an eye on.

The setup looks more vulnerable than AAPL, so I'd imagine it'll implode.... but anyone writing naked calls... or puts will be at extreme risk.

The April candle

With just two trading days left of April, those with eyes on the bigger picture should be particularly interested in how the US - and other world markets, trade into the weekend/monthly close. As things are, equity bears should be desperate for the sp'2060s with VIX 15/16s.


Nasdaq comp', monthly


sp'500: a net monthly gain (>2059) now looks highly probable... which will make for another close above the important 10MA.

Nasdaq: currently fractionally lower for the month, and a net April decline does look probable.

Looking ahead

Thursday will see the usual weekly jobs, but far more important...

Q1 GDP. Market is expecting q/q growth of 0.7%. However, there are a fair few seeking less.. even a fractionally negative print.

Equity bulls should be somewhat concerned, not least as earnings across most sectors are not exactly inspiring. On the flip side, bears face the fact that the US remains the world's leading economy, and that is where a great of capital continues to flood into.

Goodnight from London

Daily Index Cycle update

US equity indexes closed moderately mixed, sp +3pts @ 2095 (intra low 2082). The two leaders - Trans/R2K, settled higher by 0.1% and 0.3% respectively. Near term outlook offers downside to the 2065/61 zone before the weekend. Anything in the 2050/40s now looks out of range until next week/May.


Nasdaq comp'


sp'500: a minor gain, but notably coming within a mere 0.5% of the recent 2111 high. Near term downside to the 2060s looks viable into the weekly/monthly close. Sub 2040 looks difficult next week, as the soft lows of 2039/33 will offer a lot of support.

If 2111 was a key high.. even a basic 38% fib' retrace would take the sp' to the 1990s, and that would likely take at least 5-7 trading days to achieve.

Nasdaq: weighed down by AAPL, settling -0.5%.. just a touch above the 200dma (4848). Further downside to the 4700s looks probable.

a little more later..