Volatility fails to hold earlier gains

The month started with some moderate swings in the market, but with the indexes climbing into the close, the VIX was naturally unable to hold gains, closing -0.1% @ 16.28  Daily trend looks very toppy now, and a multi-day drop into the 14s now looks very likely.


VIX'60min

VIX'daily3

Summary

I was a little surprised to see the VIX open higher, and even more surprised to see it break into the mid 17s.

Yet, as is almost always the case, we saw a latter day equity rally, and the VIX dropped across the afternoon.

Lets be clear, there is NO turn/levelling phase on the VIX daily chart at the moment. However, on any basis, we're very high on the cycle, and I am guessing we'll see the VIX melt lower into the 14s..perhaps even the 13s by the end of this week.

--
*equity bulls should be seeking a VIX Tuesday close <15.

more later...on the indexes

Closing Brief

The market saw a choppy day to begin the week, with the main indexes all closing with moderate gains. The sp' close of 1640 opens up an attempt to break descending triangle resistance in the upper 1640s tomorrow. With fear of equity downside lessening, the VIX closed a touch lower.


sp'60min

Summary

So..the market ramps into the close, and the bulls will now be seeking a daily close >1650.

The big issue is whether 1687 will be taken out in the new up cycle. I'm guessing...yes, but as ever.. good trading stops will be vital.
--

*a good trading day in the permabear bunker. A fast 9min morning trade in IWM, and RIG closes the day pretty well.
--

bits and pieces across the evening.

3pm update - battling higher

Mr Market is back to moderate gains on just about all indexes, and further upside seems 'more likely than not' into the close. VIX continues to cool down, and could easily close a touch red. USD remains -1%, whilst the metals and Oil naturally benefit.


sp'60min

Summary

Its increasingly looking good for the bulls.

Yes, there is Japan, which might get whacked again later tonight, but still, if we close around current levels, the daily MACD cycle will be levelling out tomorrow.

Equity bears have had almost the whole day to exit, there can be no excuse for them to be complaining tomorrow if we're challenging 1650s.

--
The ultimate question is whether we can break >!687 in the next multi-day up cycle.

If we FAIL to break 1687, then a VERY obvious downside target is the lower weekly bollinger..currently sp'1472.. and that'd make for one hell of a profitable short.


UPDATE 3.16pm...best guess, 15min cycle...

A slightly higher low..early tomorrow,, then a challenge of 1650s