A huge week for the VIX

With equities sliding to sp'1820 (a level unthinkable just four weeks ago), the VIX exploded this week to a peak of 31.06. Volatility is back, and despite slipping to a Friday low of 20.23, and settling -12.7% @ 21.99, the VIX has confirmed a broader trend change in equities.


VIX'60min

VIX'daily3

VIX'weekly

Summary

So, the week concluded strongly in favour of the equity bulls, as reflected in a VIX that has been whacked lower from the 31s to 21s across just 3 trading days.

Despite the VIX pull back though, last weeks close above the weekly 200MA was decisive, and with the new highs this week, traders should remain focused on the bigger picture, which has now shifted in favour of much lower equity levels.

It would seem that VIX 40s are due in the next multi-week down cycle, which would likely begin somewhere in the sp'1920/50 zone in November.

--
more later... on the indexes

Closing Brief

The broader US equity market closed higher for the second consecutive day, sp +23pts @ 1886, but having cooled from an earlier high of 1898. The two leaders - Trans/R2K, settled +1.5% and -0.3% respectively. Near term outlook is still offering another wave lower to 1815/00 zone.


sp'15min

sp'60min

Summary

...and another week in crazy market land comes to a close.

The closing level should be seen as a real disappointment to the bears, not least in the two leaders, both of which saw very significant net weekly gains of around 3%.


Where do we go from here?

So, this week we saw the low 1800s, along with VIX in the 31s, something that very few had expected as recently as last week.. but what now?

Scenario'1, a further minor wave lower to 1815/00.. before a bounce to 1920/50.. and then a major wave lower.

S'2 continued strength to 1920/50... and then a huge wave lower to the 1600s.

S'3... up up up... breaking new historic highs (in most indexes) by year end.
--

To me, the notion of new historic highs this side of spring 2015 seems nothing less than crazy talk. The monthly charts ARE broken. The damage has been done... and it is not going to be reversed, even with a move to the mid 1900s by early November.

Regardless, its the weekend.... have a good one.
--

*I hold a minor short-index block across the weekend, but it ain't looking good, with the real threat of a straight run to the 1920/50 zone.. before next wave.

--
the usual bits and pieces to wrap up the week... across the evening.

3pm update - cooling into the weekend

Having built gains from sp'1820 to 1898, US equities have started to cool, with the VIX holding the psy' level of 20. Metals remain a touch weak, Gold -$2. Oil has lost almost all of the opening gains (1.2%), now just +0.2%.


sp'60min

VIX'60min

Summary

Its been one hell of a dynamic week..  with sp'1820, and a VIX of 31. Just a month ago that seemed impossible to almost everyone... including yours truly.
-

With one hour to go, equity bears should be looking at least for a close <1880.. something in the 1875/70 zone would be 'useful', and would break the near term up trend.

Similarly, look to the VIX, for a close in the 23/24s which will keep open the door to a sub 5'th wave down to sp'1815/10 next week.

Notable weakness: RIG, -5.3%... with continued talk of renewed lower oil/gas prices into next year.


3.09pm chop chop.... bulls struggling to hold the 1880 threshold... the hourly 10MA is 1879....a weekly close in the 1875/70 zone looks very viable, with VIX 24s.


3.16pm.. and another jump higher..... sp'1888... with VIX cooling to the low 22s.

This is starting to get real annoying.


3.39pm.. a close <1880 looks out of range now.... which is pretty depressing. We'll close within the near term up trend... with the threat of 1900s on Monday.

oh well, at least volatility is back...  so the weeks ahead won't be dull.


3.51pm... tiresome end to the week.... with sp'1890s... and VIX 21/22s.

back at the close...