VIX naturally cooling

Equities opened higher, but with severe closing hour weakness, the VIX rebounded (intra low 28.08), settling -11.6% @ 36.02. Near term outlook is uncertain, and will be dependent on whether the market can hold the sp'1867 level.


VIX'60min

VIX'daily3

Summary

With the severe equity weakness into the close, the situation is far from clear.

There is high threat of further equity downside to the Oct' low of sp'1820.. which would kick the VIX back into the upper 40s.

Regardless... VIX is greatly over-extended, and a broad cooling to around 20 looks due within the next week or two.

*perhaps a more interesting question is... after a sustained multi-day equity bounce (as we're still due) how high might the VIX spike in the next equity crash cycle? Are we looking at VIX 60s.. 70s? Frankly, if sp'1700s.. then... yes.
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more later... on the indexes

Closing Brief

US equity indexes saw a severe late day downside reversal, sp -25pts @ 1867 (intra high 1948). The two leaders - Trans/R2K, settled lower by -1.7% and -0.7% respectively. Near term outlook is very borderline.. if 1867 fails on Wednesday, downside to 1820... otherwise... renewed upside to 2000.


sp'60min

Summary

Q. Do I get a prize for worse post title in the past hour 'upside into the close' ?
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Closing hour candle... the worse net hourly decline since the Monday open... swinging from 1926 to 1867...a monstrous swing of 59pts.. almost 3% !
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So... I had expected some downside from the earlier high of sp'1948... and I thought 1920/15 was a bold target.

The closing hour candle is a serious problem to those seeking renewed upside tomorrow.

Now overnight futures/Asia market action will be critical.

No doubt - and justifiably so, some bears will be clawing for the Oct' low of sp'1820 tomorrow.

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*I hold overnight, long-AAPL, from the $107s, with sp'1916. Seeking an exit in the 109/111s... within 2-5 days, although after today's closing hourly candle.. that is probably optimistic.

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more later... on the VIX

3pm update - upside into the close

US equities are set for significant net daily gains, with the VIX having already cooled from a Monday opening spike in the 53s to the 28s. It remains a case of how many days.. or even a few weeks... might a bounce last. For now... first target is the psy' level of sp'2000.


sp'60min

VIX'60min

Summary

*I'm tired... and not exactly running on full power today...
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Suffice to say.. market looks set to push higher tomorrow... very likely above today's high of sp'1948.

A test of the sp'2000 threshold before the weekend remains very possible... and I sure won't short anything right now.

*as of the past hour, I am long-AAPL from the $107s.. with sp'1916, and will hold overnight.
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back at the close... unless something bizarre happens.

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3.23pm.. Hmm... some weakness..

Ironically. relative to recent days.. even on the 15min cycle... a 15/20pt drop doesn't look big.

sp'1906... Mr Market trying to washout the weaker bulls, before next wave up?

After all... unless you think we're going to see renewed severe weakness to 1820... this is merely a 'relatively' moderately down wave.
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3.32pm.. so.. err.. the title of this post was 'upside into the close'.... hmm

sp'1904.... with the Monday close of 1893 looking within range.


3.35pm.. sp'1897..... just 4pts from the Monday close... with the R2K already fractionally red.

Hmm.... well, not such a predicatable close after all.

*I would add to long-AAPL from these levels... but I am in 'trade light' mode, and will merely hold what I have.
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3.41pm.. indexes turning red... sp'1891... a full 57pts below the earlier high... almost a 3% bearish swing!


3.43pm.. That sure ain't a pretty candle on the hourly...

Bears will be screaming to break the 1867 low tomorrow... but I'm guessing... no.
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3.46pm  1884.....     I guess you could say.. 'shields weakening'.