Volatility increasing in power

The VIX opened a touch weak, but saw two surges today, with the second one managing to briefly break into the low 18s. The VIX is gaining power, and closed +6.4% @ 17.56. Near term hourly charts offer a drop back into the 16/15s. VIX 20s now look likely within 5-7 days.


VIX'60min

VIX'daily3

Summary

More than anything today - even more surprising than the sp' breaking <1538, was the strength in the VIX. The 18s were not at all expected, and it has to be said, they are unquestionably a warning that all is no longer calm in market land.

I still expect a minor 2-3 day bounce in the main indexes, to around sp'1570s, and that should in theory cool the VIX back down to the 16/15s.


VIX 20s..on the way

What now seems clear, the equity bears - especially the option traders, can look forward to VIX breaking above the key 20 threshold. This seems very likely before April comes to a close.

With a break into the 20s, the only issue then is where does it stop.

Note that the 2012 VIX high was a mere 27, right now...I have to think that will be greatly exceeded this coming May.

more later..on the indexes

Closing Brief

A pretty fierce battle across the day in market land, with the sp' taking out the critical low of 1538. Yet, near term count is still suggestive of upside in Friday opex, target remains the low 1570s, but with the strong VIX, maybe it will only back to the 15s.


sp'60min

Summary

Today was certainly a busy one, and all things considered, things are still broadly looking on track.

Yes, the critical 1538 low was taken out, and that IS a serious issue now, but that doesn't mean we can't still see a 2-3 day jump into the 1570s again.

I remain comfortably on the sidelines, seeking a major re-short, which now seems more likely on Monday, than near the Friday close.

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the usual bits and pieces across the evening

3pm update - bulls battling to close in the 1540s

Its turned into something of a battle this afternoon. The bears have just managed to break lower again, taking out the March'19 low, and we're now trading in the 1537s, below the critical March'19th low. Upside to the sp'1570s still seems viable though, with opex tomorrow.


sp'60min

vix'60min

Summary

The VIX has broken into the 18s, taking out the Wednesday high.
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Indeed, the VIX has been a lot stronger than I had expected - along with weaker indexes. Perhaps we'll only see a pull back into the 15s.

Regardless, I'm very content to sit on the sidelines, and wait for a bounce.

Bears.....arguably need to be patient, and wait for a better entry level.

*Only the Dow and Transports are yet to break the recent lows. Those still seeking upside, thats really the only sign left that this is not an actual major fail.
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I won't be chasing this though, even if tomorrow wasn't opex.
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3.05pm   Bulls need to get >1545, to escape the current down channel. Thats clearly possible by the close.  VIX in the low 18s, +9%...hmm

3.20pm..we're due another up cycle on the small 15min...

Bulls just need to break >1545..to escape the down channel. VIX is cooling down..again
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3.30pm... Ending diagonal ?

Whatever it is, I ain't short, ahead of tomorrows opex!

3.34pm...okay, here is the thing, we're only talking about 25/30pts upside here, so I'm not proclaiming 'moon ramp', but as an options play, they'll whack 35/45% off the puts from here.

high risk for bears holding overnight.
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back at the close.