Volatility fractionally higher

Whilst the indexes closed largely flat, the VIX closed just under 1% higher @ 16.05. With just 3 weeks until the new year -and ZERO sign of a fiscal cliff agreement, Mr Market is completely in denial about what is coming. If the market does have it grossly wrong, and no agreement can be reached, a major re-pricing of equities will be necessary, and the VIX will explode.


VIX'60min

VIX'daily

Summary

First upside target is the mid 17s. If that can be achieved after the FOMC announcement this Wednesday, then there is the likelihood of 19s later this week.

VIX '20, a key threshold - and one even the clown finance TV networks recognise as important, still seems out of range in the immediate term.

What is clear, when we do see VIX 20+, it will be a massive warning of trouble, and then my mid-term target of the low sp'1200s will become the immediate target.

More later..on the indexes.

Closing Brief

A very dull day in the market. With trading volume at near zero, the algo-bots were in full control, and were thus able to melt everything slowly higher. It would appear the indexes will churn, with the constant threat of slow melt higher..all the way into the FOMC announcement @ 12.30pm Wednesday.

The closing hourly charts...


dow

sp

trans

Summary

A dull day, we remain (just) within small upward channels, and until we are back under the lows from last Wednesday - sp'1398, the bears have a real problem in that the algo-bots are merely able to melt this nonsense higher.

A few closes in the 1430s and I'd be worried. A few daily closes in the 1440s..and that'd arguably wreck my general bearish outlook.

So..in the grand picture..we're very close to the edge.

As things are..Mr Market is waiting for the Bernanke to deliver on Wednesday. One thing is for sure, we won't be trading flat on Wednesday afternoon.
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The usual bits and pieces across the evening.

3pm update - closing hour weakness...probably

The market is looking tired, hovering at broadly the same levels as last Monday, and once again we're due 'some level' of down cycle. The first target would be last Wednesdays low of sp'1398. That is a mere 1.5% lower, so..its easily achievable within a single day.


sp'60min

sp'daily5

Summary

It remains..dull, but..as we're seeing, there IS weakness out there.

The question is..who thinks we're going to be trading in the sp'1430s any time soon?

..in that case...we go down.
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UPDATE 3.30pm  VIX melting slowly lower into the close. Bears will need ot take out the 17.50s later this week.

back after the close