10am update - VIX warning for the equity bears

Equities open sharply lower, but the opening VIX hourly candle - a black-fail (as I like to call them), is warning that VIX is already maxed out..in which case.. equities are also close to flooring. Metals are holding sig' gains, Gold +$12.


VIX'60min

sp'60min

Summary

However you want to label the hourly chart.. an 'ABC' - with C, this mornings opening drop - along with yesterdays bear flag.... I don't think we go much lower.

Certainly, there are multiple aspects of support in the 1950/35 zone.
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What is absolutely clear, ALL opening black-fail candles on the VIX are to be treated with a lot of respect.

Bears..........beware!
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10.01am... we close the opening 30mins indeed with a black-fail candle....and MACD cycle will be levelling out within 1-3 hours.

There can be no excuse for ANY whining tomorrow/early next week, when the market is on the rise.

The VIX is very probably giving a 'get outta there' signal.

Similarly.. for the dip buyers...now is prime time.

Notable strength: Airlines, UAL +6.6%.... woah


10.10am... VIX continues to cool... and indexes are levelling out.

Airlines have turned on the nuclear engines... UAL +7.1%


10.25am...  VIX really getting the smack down now... back in the 12.50s.... and equities well off the low.

Equity bears likely had their chance to exit.

A few hours more to stabilise the market.. and then up.. into the weekend.. and across next week.

Pre-Market Brief

Good morning. Futures are set to open rather sharply lower, sp -17pts, we're due to open around 1955. Precious metals are significantly higher, Gold +$15, with Silver +2.0%. First support on the daily cycle is the sp'1950/45 zone.


sp'daily5

Summary

So...err, we're set to open lower, by the biggest amount in a few months (I think), and frankly..... I can't figure out why.

Price structure on the hourly charts was a bear flag yesterday, but really, I am surprised.

Regardless, first support is pretty clear.... sp'1950/45 zone. Semi-critically, we have the weekly 10MA... in the mid 1930s.

sp'weekly8b

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Video update from Carboni...



One thing is for sure..this morning won't be dull.
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Notable early strength: UAL, +4.8%... with a clear break of the multi-week down trend. UAL is $42, and looks set for $50


8.54am.. sp -19pts. we're set to open at 1953.

R2K is a rather huge -2.0% lower in pre-market....which will make for the low 1150s.


9.20am.. Looks like we'll be in the 1940s today.... for a break of trend.. bears need <1945.

VIX 13s seem a given.


9.28am.. biggest opening drop in 3 months..... have a good day everyone!


9.32am.. VIX opens in the low 13s...which is first resistance... next level 15


9.37am... BLACK candle on the VIX...... equity bears gotta be real careful here.

There is high potential for a reversal today.

*I realise some out there will be looking for much lower levels, but really, probably vital to keep this in perspective.

The black candle is a real issue here....... bears...beware!


9.42am .. High for the day - in VIX, is probably in... and equities will likely be flooring real soon.

For those on the short side..the early signs are there to make a run for the exit.

Daily Wrap

US equities broke the two day run of declines, and saw moderate gains, sp +9pts @ 1972. The broader trend remains to the upside on all indexes, with a VIX that continues to reflect a market that has no concern of anything.


sp'weekly8b

R2K, daily

VIX'daily3

Summary

So..a day of minor chop, with the usual underlying upside.

It would seem highly probable that the market just wanted to wash out a few of the weaker bulls ahead of next weeks opex, which the market would typically rally into.

Price structure on the hourly cycle (see earlier earlier post) is a bear flag, but considering the bigger daily/weekly cycles, bulls will surely resume the up trend.

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Closing update from Riley


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Looking ahead

Thursday will see weekly jobless claims and wholesale trade data. Frankly, neither of those are particularly seen as important these days.. and Mr Market will have a fair chance of just trundling higher as the bears start to close out ahead of the weekend.

*next sig' QE is not until next Thursday.
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Weakness into end July.. or more upside to smite the bears?

I read around of course, and again today, I was seeing more chatter of weakness into end July, to the low sp'1900s. I suppose in theory it is possible, but price action does not support any such outlook.

Sure, we have a blue candle on the weekly 'rainbow' chart right now, but hey, look back to Nov/Dec 2013. That didn't work out so well for the bears did it?

Right now, I'm resigned to seeing the sp'2100s, and based on the current rate of increase, that will take (at least) until next February to occur.

There is a VERY small possibility that the market will ramp to the 2100s by late August/early Sept... which would offer a crash scenario (as Dr Doom, aka, Marc Faber is seeking) in the notorious month of October. First things first though.... lets see if we can claw into the 2000s next week.

Goodnight from London