Volatility drops into the close

With another political comment causing the indexes to snap back higher, the VIX flipped back to the downside, closing -0.01, to settle @ 19.47. The earlier break above the 20 threshold is the most aspect of today's somewhat roller coaster day.

VIX'60min

VIX'daily

VIX'weekly

Summary

Lets be clear about one thing today...

The VIX broke the key threshold of 20.

Yes, it closed under 20, and yes..it even closed fractionally in the red.

Yet, the damage HAS been done. The warning signal has been triggered.

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If we are going to see volatility spike into the 30s..and even 40s in early 2013, this sort of crazy swing is to be entirely expected.

Get used to it.

Closing Brief

With yet another political comment appearing, the bears ended up on the run, and the bulls were back to chasing the market higher. However, lets be clear, some important levels were broken today, not least of which was the VIX 20 threshold.

dow'60min

sp'60min

trans'60min

Summary

The closing minutes of action were pretty crazy, this is exactly the sort of instability we'll increasingly see in the days..and weeks ahead.

Get used to it.

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The next key target to break is 1398, that will open up 1390/88..and despite todays afternoon madness, is still viable tomorrow.

more later this evening, if my net connection holds together

2pm update – seeking increased weakness

Everything is looking on track, and in the style I was seeking. We've seen the VIX break the key 20 threshold, the indexes have taken out a few key levels, and even Mr $ is a little higher - after earlier declines.

Sp'daily, Keltner

Summary

First target is sp'1390..sometime tomorrow. We might get a bounce from there to around 1400/05..briefly.

All bounces will be shorted (at least by yours truly)
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The bigger primary targets remain unchanged.

Strike'1 for Mr Market

Once 1343 fails..then its 'free money' for the bears until 1270/60