Daily Index Cycle update

US equities closed significantly lower, sp -29pts @ 2049 (intra low 2042). The two leaders - Trans/R2K, both settled lower by -1.8%. With the loss of the 200dma, near term outlook is borderline. Equity bulls need a strong counter rally on jobs Friday to at least partly negate the Wed/Thursday decline of -3.1%.


sp'daily5

Trans

Summary

*the 'old leader' - Trans, was borderline yesterday.. .and today saw decisive break of rising support, that stretches back to the Aug' lows.

Either equity bulls can strongly rally from here.. and FAST, or the trans is a clear early warning of trouble for the rest of the market.
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To be clear.. my best guess is for renewed equity upside, but I am surprised we broke (and closed) under the 200dma (sp'2064).
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a little more later...

VIX battles to the high teens

With equities continuing to unravel for a second consecutive day, the VIX battled higher (intra high 19.35), settling +13.8% @ 18.11. Near term outlook is borderline, and will be largely dependent on how the market interprets the Friday jobs data. Clearly, a brief foray into the 20s is now viable.


VIX'60min

VIX'daily3

Summary

Suffice to say.. the second consecutive net daily gain in the VIX.

The last two hourly candles of the day were highly suggestive of a short term top.

Best guess... equities to resume higher.. with a weekly close in the sp'2070s, and that will likely equate to VIX in the 16/15s.

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more later... on the indexes

Closing Brief

US equities closed significantly lower, sp -29pts @ 2049 (intra low 2042). The two leaders - Trans/R2K, both settled lower by -1.8%. With the loss of the 200dma, near term outlook is borderline. Equity bulls need a strong counter rally on jobs Friday to at least partly negate the Wed/Thursday decline of -3.1%.


sp'60min

Summary

closing hour action: a test of the 2pm hour low of 2042.. and then rebounding.
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The 2pm and 3pm hourly candles are both of the spike-floor type, highly suggestive market is building a floor.

Clearly, with the jobs data and an OPEC meeting, there will be straight forward risk of a sig' gap lower tomorrow, however, I am guessing not.

Best guess: Friday upside.. at least to the sp'2070/75 zone. Right now, equity bulls should be relieved on any weekly close in the 2070s.

yours... long.... helped via a flak jacket, tin helmet, and large quantities of tea/chocolates.

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more later... on the VIX