Volatility cooling in the afternoon

With equities breaking a new multi-year low of sp'1812, the VIX finally showed some upside kick (intra high 32.07), but then saw very significant afternoon cooling, settling +5.9% @ 27.59. Near term outlook is uncertain, as there is clear threat that sp'1812 is a short term low.


VIX'60min

VIX'daily3

VIX'weekly

Summary

*I've included the bigger weekly cycle, to help put things in perspective. The 30s are kinda high.. but its nothing relative to the capitulation (53.29) as seen Aug'24th.

The two most recent weekly candles are somewhat spiky.. and threatening the equity bears with a short term floor from sp'1812.

Broadly.. VIX 40s look an easy target.. but perhaps not this cycle.
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So.. what to make of today?

First, we saw VIX 32s.. which certainly confirmed the new multi-year lows seen across most equity indexes. Yet, VIX then cooled over 5pts to 26.59, before a minor rebound in the closing minutes.

Frankly.. its not a great close for those long the VIX. There is clearly still threat of renewed equity downside - not least from further weakness in Oil, but still.. VIX may have well maxed out in the 32s today.

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*I launched a VIX-long trade (via TVIX) in the 2pm hour, but bailed a mere 45 minutes later as the equity recovery turned somewhat hyper bullish.

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more later... on the indexes

Closing Brief

US equities closed very mixed, sp -22pts @ 1859 (intra range 1812/76). The two leaders - Trans/R2K, settled -0.5% and +0.4% respectively. With a rather powerful wave from 1812 to 1876, the market is threatening a short term floor, although 1812 makes little sense as a key floor.


sp'60min

Summary

*closing hour action: more crazy ass swings... with the Trans, R2K, and Nasdaq actually turning positive. There was renewed weakness in the closing minutes, but it was not a great close for those in bear land.
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Well, that sure was much too wild for yours truly.

The market had setup a pretty good bear flag by 2.30pm.... and after a little chop... we saw a very significant hyper-ramp, especially seen in the two leading indexes - R2K swinging from 958 to 1008, a VERY powerful 5%

sp'1812 makes little sense as a key low, but I can't be in denial about the closing daily candles, which are warning of a spike floor.

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*I went long TVIX around 2.30pm.. but bailed just after 3pm as the market went hyper bullish. If it was just a market fake out.. it was a nasty one.

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more later....on the VIX

3pm update - trying to keep things in perspective

With price action increasingly wild - not least the earlier swing from sp'1812 to 1847 (for no good reason), it is getting a little difficult to keep things in perspective. However, the bigger weekly/monthly cycles sure help, with a viable short term target of sp'1750/25, and the grander 1600/1500s in April/May.


sp'15min

sp'weekly8d

Summary

I think its fair to say many  - myself included, have been waiting for a bounce that just didn't come.

After trying to fine tune an intraday entry, I'm long the VIX, via TVIX, from sp'1844.. and VIX 28.70s.

All things considered, a target of sp'1780/70s, with VIX 36/38 does not look overly bold, whether tomorrow, Friday.. or early next week. It makes no real difference.


We are STILL due capitulation.

Right now, a daily close <1830 would be useful.. along with VIX >30
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updates into the close....



3.18pm... sp'1866... now a full FIFTY FIVE points above the earlier low.

Urghh.. is that really it, or is it just a crazy ass short-stop cascade?

VIX remains broadly elevated in the 27s.. but that is a clear 5pts below the earlier high.
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3.21pm.. A daily close >1870.. would be a real problem to those short.  Short term trend is broken..   urgh.
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3.28pm.. Hyper-spike floor candles on the two leaders - Trans/R2K.

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3.30pm. EXITED TVIX-long....  major fail.. as the market appears to be putting in a giant spike floor.

Seems no point holding short above sp'1870... VIX looking dire.. in danger of closing red.
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3.35pm... The scary daily candle...

That is too bullish for my liking. sp'1812 makes little sense as a low... but it is.. what it is. 


3.49pm.. and now a swing from 1876 to 58.... another 0.8% within barely 30mins.

This market is really start to annoy me.

VIX rebounding, +7% inthe 27s... but that is still a long way from 32s.

back at the close......................