VIX battles upward

With US equities seeing another day of broad weakness, the VIX was naturally on the rise, settling +21.4% @ 24.99. Near term outlook offers the sp'1920/00 zone, and that might equate to VIX in the low 30s. If next Monday is crashy to the sp'1700s though... VIX will explode to the 55/65 zone.


VIX'60min

VIX'daily3

Summary

re: VIX 55/65

If the Friday equity close is at/near the lows of the day/week - in the sp'1920/00 zone, then the outlook for the Monday open will be exceptionally bearish.

If equities opened lower by 5-7%, then VIX would jump into the 50s.. perhaps even 60s.

There should be clarity of whether that scenario is viable at 3.55pm Friday.
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*I am long VIX via TVIX. I am seeking at least another push higher in the VIX, but with a viable explosion next Monday.
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more later... on the indexes

Closing Brief

US equities closed significantly lower for the third trading day of four this year, sp -47pts @ 1943. The two leaders - Trans/R2K, settled -3.1% and -2.7% respectively. Near term outlook is for continued weakness to the sp'1920/00 zone. If the Friday close is at/near the lows.. Monday will likely see a mini-crash capitulation in the 1700s.


sp'60min

Summary

*closing hour action: a lot of chop, but with a new cycle low of 1938.
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So... another day for the equity bears, and the mainstream are getting notably twitchy. There is increasing talk of 'the next 2008', the China upset, weak commodities, and just plain weak earnings.

Clearly though.. we're likely no more than a day or two away from a capitulation low.

The only issue is whether that is the sp'1920/00 zone... or a brief crashy washout in the 1700s.


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**I have had a case of trader-paralysis for some days.

However, in the closing hour I did pick up a small block of TVIX. The actual stock.. not options. I have little tolerance lately, and rather than play VIX calls (notoriously problematic to offload in a market crash), I think I might get into the habit of meddling in TVIX as a VIX-long vehicle.

In any case... I'm on the short train... at least a little.

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more later.... on the VIX

3pm update - just another down day

US equities remain very significantly lower, with the sp' having broken a new cycle low of 1941, with VIX confirming the increasing market upset, @ 25.57. Gold is holding another fear-bid gain of $15. Oil remains somewhat choppy, but weak, -1.7%.


sp'60min

VIX'60min

Summary

There is ZERO reason to think 1942 is a key low, any more than 1989, or 1979.

With VIX already in the 25s, next level is the 30 threshold.

Indeed, if sp'1920/00s tomorrow, then VIX could max out in the 31/33 zone.
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The Friday close will be critical. There is HIGH risk of a Monday washout of another 125/150pts.

We should have clarity of that issue by 3.55pm tomorrow.
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notable weakness...

AAPL -3%
CHK -5%
FCX -11%
TWTR -4.2%... as most momo stocks are also unwanted

strength: GDX, +4.7%.. as the precious metals hold that fear-bid... but it won't last.
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3.25pm.... sp -49pts... @ 2041

*I've been suffering from trader paralysis for some days...  however, I am now long VIX.. via TVIX.  Stock.. NOT options.
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3.32pm... sp' breaks a new low of 1938... with VIX 25.86.

A move to 1920/00 zone looks a given... that should offer VIX close to 30.
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3.41pm.. chop chop.... but clearly.. another day for the equity bears.

Ohh lookie.. Mr Mcclellan

back at the close