Volatility slips lower

With the main indexes rallying in the morning the VIX dropped around 6%. Despite the indexes closing largely flat, the VIX still failed to rally back to evens, closing 4% lower into the mid 15s.

The VIX remains completely bizarre, showing zero concern in the wider market.


VIX'60min

VIX'daily

Summary

Bears have a real problem for Friday. We have a clear bear flag on the hourly chart, and unless we can battle into the 16s, this bear flag will more than likely play out.

The daily cycle is still showing underlying positive momentum for volatility, but..its only moderate. It won't take much to start this ticking lower.

So, its a real mixed bag in VIX land. Once again, I'll note that whilst the VIX is <20..it is pretty unreliable.

More later

Closing Brief

With the weekly jobless claims the best in a few years, we saw an excuse for morning gains, but they sure did not hold. It took the bears most of the day, but we managed to close broadly flat.


iwm'60min

dow'60min

sp'60min

Summary

I think many bears will be glad today is over with.

As for tomorrow, really tough to guess. I suppose bears can tout the short term trend is still somewhat down - and the Dow, R2k, tranny, are already below their sp'1430 equivalent lows.

Yet..as I keep noting, the VIX shows zero sign of market concern.

As ever, the bigger trends are what I'm trying to focus on. We have had a few major warnings lately, but the bears must stay in control..and push this market below sp'1430..and close below the 50 day MA @ 1427

More later

3pm update - a very important closing hour

The earlier gains have largely been eroded, but even a marginally higher close would be a real victory to the bulls.

Bears must close this market at least flat. A close <1430 would be a major reversal victory for the bears, but that seems unlikely.


sp'60min

sp'daily5

Summary

I've frankly no idea what to make of this mornings nonsense. Was it a wave'2 of 3, or what? Pointless to guess it seems.

It remains surprising that so many out there don't think we'll go any lower..for the rest of the year! Surely we're going to break 1430 at some point?

I remain short, back on the 'hope it falls' train.

More after the close.