Volatility..falling back a touch

With the US indexes breaking new lows around lunch time, the VIX did make a new high, but with the long awaited index bounce finally coming in late afternoon, the VIX did indeed close slightly red. A further move lower for around 2-4 trading hours seems very likely during early Tuesday.


VIX'60min

VIX, daily - bullish outlook

VIX, weekly

Summary

Looking for VIX 24/23 sometime Tuesday, and then one last lunge higher across Wed/Thursday, probably to around 29, maybe even briefly 30/31 - if the market gets a little twitchy about the usual EU concerns.

More later...

Closing Brief

The market did indeed finally see a bounce, and the close was moderately positive for the bulls. Tuesday could certainly open a touch lower, but I'm looking for a gap higher, maybe as high as +1% into the sp'1290s. Given a few hours, a re-short around that level should be good for a Wed/Thursday exit in the low 1260s/50s.

VIX closing red confirms the short term outlook, a VIX in the lows 24s early Tuesday would match up nicely with sp'1290s.


Lets look at those hourly cycles...


IWM

Dow

SP

Summary

The bounce is probably almost half way done already, but we're dealing with such tiny cycles, its really very tricky to guess. Last Friday I was looking for a bounce to 1295/1300, I've lowered that to around 1285/95.

More later, looking at Volatility, and those daily index cycles

3pm update - rally into the close?

Despite being a Permabear, I am indeed riding this mini ramp wave. A bounce was indeed very overdue, although its unlikely to last very long, late Tuesday morning or so. We could see quite a little truck load of bears get stopped out in this closing hour, causing reverse cascade UP all the way into the close.


Sp'60min

VIX'60min

Summary

Bounce underway, target is 1285/90. We could still climb to 1300 - it'd certainly make for a more normal 'hit the big level, then fall away' scenario.

With the VIX red, we could easily rally for 2-4 more trading hours. Bears had all day to close out...its possible they could be real annoyed at the Tuesday morning if we gap up 1% for some nonsense 'rumour' reason.

More after the close.