Daily Index Cycle update

Another week done, and we're getting close to the more volatile Sept-November trading period.

Bears arguably have a narrow window from mid-September to late October to get 'something started', otherwise, bulls will remain in control until spring 2013.


Sp'daily5

Summary

With the hourly cycle crawling higher, we saw what was largely a technical bounce, which was inspired by some Fed letter (blame Marketwatch I believe). Volume remains horrifically low, and it seems even the algo-bots are less active than they used to be. Knight Capital related?

Sp'1380 looks the best the bears can get next week. All the doom chatter out there remains very premature, never mind the fact we've still got Jackson hole, the labor day holiday, and then the pre-FOMC build up into mid-September.

Baring some kind of strong news story out of Europe, '1380 will likely hold up.

As I've been noting all week, if there is one thing that IS clear - and others are also noting it, until we see a break into the 1340s, the primary trend remains UP.

That's all for today, have a good weekend.

Goodnight from London
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*look for a major posting later on Saturday.

Volatility, gains for the week

With the main indexes declining just under 1% for the week, the VIX managed a 13% increase across the week. However, 13% only gets the VIX to 15, which remains an extraordinary low level.


VIX, weekly

Summary

From a MACD (blue bar histogram) perspective, for the first time since mid May we have a tick upward on the cycle, but we're still negative momentum. At the current rate of increase, we could be positive cycle early September.

Whats clear, bears need a VIX weekly close next week at least over 18, that might at least signal the beginning of a new up cycle.

My concern remains that even if we hit hit 18/19 later next week, the appearance of the Bernanke at the Jackson hole will lead to a major rebound on Friday, and mark the start of a major new index up cycle.

So...lets see how we close next week, and if a trend on the bigger cycle has begun.

Closing Brief

Most indexes closed a little under 1% lower for the week, could be suggestive of a turn, yet the monthly trend is still very much cruising higher.

This time next week, we'll have that annoying 'Benny @ the hole' nonsense out of the way..It never seems to end..does it?

The closing hourly index charts


IWM

Dow

Sp

Summary

Very little to add, its been tiresome week of waiting. Bulls can claim 'we made a new high', whilst bears can claim 'net weekly declines'.

*I'll post a few other things later this evening, with something major on Saturday, otherwise for now....

Have a good weekend.