Volatility fails to breakout

Whilst the indexes rolled over in the late afternoon, the VIX recovered to flat, but..completely failed to hold level, closing 3% lower, to settle @ 15.57. Until the VIX is >17.50 - when the sp'500 was trading @ 1398, all VIX upside spikes are to be dismissed as mere noise.


VIX'60min

VIX'daily

Summary

The failure to hold the low 16s was an embarrassing fail for the bears this afternoon.

There is no sign of the near term decline ending, and indeed, the VIX daily cycle looks especially bad. The lower bollinger band is a further 6% lower at 14.39. All those bulls seeking sp'1440/50s..should be looking for VIX in the low 14s leading into Christmas week.

So, as things are, there is absolutely no sign of major VIX upside, and VIX 20 looks an almost insurmountable height to reach.

More later..on the indexes

Closing Brief

The opening index gains - breaking the recent sp'1423 high, were very damaging to those with bearish outlooks into early next year. The weakness in late afternoon was only minor, and unfortunately did not undo enough of today's gains.

The closing hourly charts:

Dow'60min

Sp'60

Trans'60

Summary

A disappointing open..and an equally disappointing closing hour. Despite the rollover - lead by the 'old leader' transports, the main market held together.

You can see on the hourly charts, despite the weakness in the afternoon, we held within the upward channel.

There is nothing here for the bears to be pleased about.
--

Things will become somewhat clearer tomorrow, after we see how the market reacts to the final FOMC announcement of the year.

more later...

3pm update - closing hour bull fail ?

There is a touch of weakness right now, but the damage has already been done to the bear case. Until we break the recent sp'1398 low, the more cautious bears should arguably wait. VIX is trying to battle back to close flat, but even 16s..would be embarrassingly low.


sp'60min

vix'60min

Summary

Kinda interesting.

Only a red close would make me feel marginally less annoyed today, and red indexes look next to impossible.
--

What remains the greater concern is how the market will react to Bernanke tomorrow.

UPDATE...tranny...weakest..and once again...the leading warning.

 Thats a pretty significant failure-spike, a red close would be...something for the bears to hold onto.

UPDATE ...VIX hourly..breaks the down trend...its a 'soft' level, but..there IS potential for a mini snap higher into the close.

Trans index.... RED.  

Sp'500...looking very spiky now...jeez..surely not..a red close? hourly charts would support it, but it has to keep pushing from here...no pausing!

--
UPDATE 3.30pm,  bears need a close <sp'1422 to clearly break the ascending channel.

With VIX back to flat..@ 16.01...the bears have at least something to end the day with..although its not much.

back after the close