VIX breaks into the 11s

With equities building gains in the early morning, the VIX snapped lower (intraday low 11.80), but settling -8.1% @ 11.91. Near term outlook is for the VIX to remain within the 14/11 zone into early June. VIX 20s look unlikely for at least another 3-4 weeks.


VIX'daily3

Summary

It remains bizarre how the VIX spike highs continue to get lower and lower.

At this rate, in 2015, the cycle highs will be in the 10s..or 9s.
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Seriously though, VIX remains very low, but I don't expect it to last much beyond early June. VIX has a high probability of the 19/21 zone by late June...whether the VIX can break..AND hold the 20s..that is the real issue.

If the main market does see a multi-month down wave this summer - with sp'1625/1575 (best bear case), then I'd expect VIX to at least briefly break into the 30s.

Right now, I will be looking to pick up a VIX call block, in early June.
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more later...on the indexes

Closing Brief

US equities saw an effective full reversal of the Tuesday declines, with sp +15pts @ 1888. The two leaders - Trans/R2K, settled higher by 0.6% and 0.5% respectively. Near term outlook is moderately bullish into the 3 day weekend, although the bigger outlook still offers major downside this summer.


sp'60min

Summary

*I realise, for those on the short side, after the Tuesday declines, today has been an utter disappointment.. you have my sympathies.

From a purely cyclical perspective, today gains were not particularly surprising. For me, the morning gains in the R2K were good, but the weakness was STILL there, and I was stopped out this morning.


So...where now?

A long 3 day weekend looms, and more likely than not, the market will churn quietly into the Friday close. There is a fair bit of data tomorrow, so Mr Market will likely find an excuse to break into the 1890s.

Bigger picture still looks okay for the bears, but it just remains a case of waiting for the bigger monthly cycles to conclusively break lower. The monthly 10MA on the sp' is around 1800, so we're almost 5% away from even testing the key rising trend.

Right now, I'm looking ahead, to the FOMC of June'18, although it is entirely possible we'll be breaking lower before then.

What about the recent GDP reading of 0.1%. What if that is revised marginally negative? I have to believe this market is highly vulnerable to a major multi month fall.

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*having exited my index longs this morning, I am more than content to sit on the sidelines until next week.
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more later..on the VIX

3pm update - tricksy market

US indexes are holding gains, with the sp' still battling to break above key resistance of 1887. Any break, and the door will be open to the low 1900s. Metals are somewhat weak, with Gold having swung (post FOMC minutes) from -$11 to -$3.   


sp'60min

Summary

So...a little post FOMC chop, and we have an interesting closing hour ahead.

Many are agreed that the market will hold up, ahead of the 3 day weekend, only to slip lower. Perhaps that is how it will work out.

Regardless, I am just not in the mood to take any new positions..either way until next week. I am simply tired! Right now, the only decent 'chase it lower' level would be a break of the weekly 10MA, which next week will be around 1868/70 - around yesterdays low.

So..I might take a short position next week..if the setup is there.
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Notable strength, NFLX, +4.3%..and if the main market can keep pushing upward..$410/420 by mid June looks very easy..before the next down wave. More on that later..on my fair value page.


3.07pm... Equity bears seem absent....and VIX is back in melt lower mode.

Oh well....a long weekend is ahead...and I'm more than content to sit it out until next Tuesday. After all, there is no hurry..right?


3.14pm.. and there goes VIX..back in the 11s, with sp'1888 seemingly imminent.


3.34pm.. sp'1888.80.... yeah.. a lot of 8s..for those into numerology.

With VIX being ground into the 11s....truly bizarre.

Did everyone forget about Q1 GDP of 0.1%...and the Ukraine?

Bears....need some patience...across the long weekend.