Daily Index Cycle update

The main indexes battled higher across the day. The sp' closed +0.95% @ 1588, having hit 1593. The transports saw a far more significant 1.9%, with the R2K +1.1%. Near term is broadly weak, and further downside to the 1530s looks likely, if not even 1510/00.


sp'daily5

R2K

Trans

Summary

An interesting day to watch from the sidelines. A day where the market was desperately trying to claw away from the recent low of 1560. We're now 28pts above that, and it would seem the bulls will get at least one opportunity to make a play to break through 1600 early tomorrow.

However, considering the near term trend, renewed underlying weakness looks set to reappear, with significantly lower levels across Thursday and Friday.

*equity bears however will face significant QEs on both Wed/Thursday.
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a little more later...

Volatility whacked lower

With the main indexes seeing some moderate upside with sp +1% @ 1588, the VIX saw rather consistent weakness across the day, closing -8.2% @ 18.47. VIX is probably gap-filling, and a stronger surge into the mid 20s looks very viable by the Friday close.


VIX'60min

VIX'daily3

Summary

Yesterdays black candle on the daily chart was a good warning that today would not be good for the bears.

However, this is probably just a 2 day 'cooling phase' before the next surge higher.

I find it hard to believe sp'1560 is the low of the current equity down cycle, and indeed, I'm seeking at least the 1530s, possibly 1510/00 within the next 3-5 trading days.

Even the sp'1530s should equate to VIX 25/27.
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 more later..on the indexes

Closing Brief

The main market clawed broadly higher across the day, but the market still looks rather shaky. Further upside into early Wednesday seems very viable, but this bounce is going to hit a wall around sp'1600/10. VIX is already gap-filled in the upper 17s.


sp'60min

vix'60min

Summary

*touch of weakness into the close, but I don't think its too important.
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Well, today was a day where I merely sat back..and watched.

The bounce from 1560 is now almost 2 days in age, and if the Wednesday open is higher, that will almost certainly be it.
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The gap at sp'1625 (or so), looks out of range in the current bounce.

Broadly speaking, the near term trend still looks exceptionally weak, and a move down to the low sp'1500s looks very viable..within days. Look for the 10yr yield to break >2.75
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more later