Volatility continues to cool down

Arguably more notable than the equity gains today, was the continued fall in the VIX, which settled -9.3% @ 15.80. Near term outlook is for further declines, to the 15.00/14.50 zone..which might equate to sp'1810/15. From there, VIX looks set to again... surge.


vix'60min

vix'daily3

Summary

I should note again, there will be VERY strong resistance in the 19/20 zone - where the important 200 weekly MA is lurking.

However, if the market gets stuck around sp'1810/15 in the coming day or two..rolls over, and can then break <1765..we will see the VIX break into the 20s...for the first time since last October.

Without question, the next day or two will be offering a very attractive index re-short /VIX re-long opportunity.
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more later...on the indexes

Closing Brief

It was a choppy day for the US indexes, but with underlying upward 'bounce' pressure, sp +10pts @ 1792. The two leaders - Trans/R2K, settled higher by 1.1% and 0.9% respectively. There is near term upside to 1810/15...before the down trend will likely resume.


sp'60min

Summary

So..what to make of today?

Is that it for the downside? Considering the price action of Friday, the VIX surge into the upper 18s..and the apparent double micro-top of sp'1850...I have to think there is more downside to come...after the current bounce completes.

It will be important for the bears to appear again..before this week concludes.

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Video update from Oscar (yeah..weird time for an update)



Not surprisingly..Oscar is looking for upside. I'd only be concerned if we get a daily close in the sp'1820s.
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the usual bits and pieces across the evening...although its only Tuesday, and I'm starting to get tired..urghhh

3pm update - closing at the high of the day?

Considering the smaller, and bigger index cycles, a daily close in the sp'1790s seems likely, and that will keep open the door to an FOMC or Thursday morning (Q4 GDP) spike high...in the 1810/15 zone, along with VIX 15/14.50. From there, the downside (in theory) should resume.


sp'60min

sp'daily5

Summary

For many..today has been a real mess..but this sure looks like just a standard bounce, after what was a pretty sharp 3 day drop.
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Those seeking an index re-short and/or long VIX, should be on standby from the Wednesday open for a potential bounce high..and then a rollover.

As ever...Fed days are somewhat tricky, and the safer strategy would be to wait until at least 2.15/30pm.
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I'm not expecting much in the closing hour, other than another 3-5pts higher, although would doubtless really annoy those holding short the market.-


3.15pm.. upper bollinger on the hourly chart..now 1809..so..we will clearly have some stiff resistance around 1810 early tomorrow.

VIX looks weak..-8%..and a close in the upper 15s...would be the target.

Tomorrow could be one hell of a reversal day...
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3.39pm...pushing for a new intraday high...... nice to see the market behaving itself.