VIX fills the gap

Whilst the equity market built gains across the day, the VIX appeared to be forming a double floor in the low 17s. Hourly VIX charts offer very significant upside potential across the next two days, and a weekly close in the low 20s looks very viable.


VIX'60min

VIX'daily3

Summary

The opening reversal candle was pretty much a classic, and we even saw the VIX break into the mid 18s by mid-morning, but with the indexes holding together, the VIX cooled back down.

Arguably, we closed the day with a double floor in the low 17s, and that surely 'fills the gap', and the VIX should now start a new climb - assuming the indexes have maxed @ sp'1606.

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*I am Heavy LONG the VIX, from the 17.50s, seeking an exit in the 23/25s within 2-3 trading days.

Closing Brief

The market broadly continued its bounce from the sp'1560 low, although there remain plenty of a signs of weakness out there. Despite the break into the 1600s, VIX is holding the 17s, and looks primed to surge back into the 20s before the weekend.


sp'60min

Summary

An interesting..but somewhat tiresome day. Seeing what appeared to be renewed QE-fuelled algo-bot melt was pretty troubling this afternoon.

Yet a bounce was expected, the only issue is where it will max out
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*I hold heavy SHORT overnight, and probably into late Friday.

In the bigger picture..nothing has changed. Primary downside target is the lower weekly bollinger, currently @ sp'1497

3pm update - melt into the close?

The market is broadly still climbing, bears need a close <sp'1595, and that doesn't look likely now. Indeed, with today's QE, the bulls might be able to quietly melt this into the close, 1608/10 would be the target. VIX so far showing no real power, and is close to the opening low.


sp'60min

vix'60min

Summary

A bit of a tiresome day for those on the short side. A hint of weakness in mid-morning, but then...back to slow motion melt.

Is it the QE ? Or merely the short term bounce?
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Regardless, I'd be surprised if we close <1600.

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*I will hold short overnight, and right now, probably into the Friday close..and across the weekend.


UPDATE 3.29pm.. well, we've effectively tested the 50% fib retrace from the 1654 high.

Only issue now is whether 1620s...before 1530s.


3.35pm.. Note the trans/R2K have NOT  yet broken the morning high, equivilent to sp'1603. Kinda interesting.

3.45pm.. R2K looking like intra-day double top....and its weak right now - Transports is matching it.