Volatility flat, despite index weakness

Despite continued weakness in the indexes for a seventh day the VIX remains very low, closing effectively flat, and rest @ 17.99


VIX'60min

VIX'daily

Summary

The price action of the VIX in the past two days is suggestive of a 5 wave move. Whether we've had a truncated fifth this afternoon, that's too hard to guess. Even if we've still to have a fifth wave higher early Friday, it won't likely be very much, and thus the indexes will probably be free to start a rally into next Monday.

Best guess, a pullback in the VIX, flooring next Monday, around 16.25/50


Strange days

It has to be said, the VIX action of the past few weeks has been truly strange. I won't even waste keystrokes on any of the somewhat more kooky theories out there, but suffice to say..the VIX is not properly reflecting what is going on with the price action of the equity indexes.

I realise the VIX itself is a mere calculation of option prices, but still....something sure seems 'off'.
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I don't expect VIX to break >20 for at least another trading week. Perhaps we'll see the much awaited VIX explosion in late Nov/early December?

For the near term, it just seems like Mr Market is still tightly holding onto the bullish hysteria of the past four years.

Eventually...the delusion will break...Mr Market will awaken, and then we will indeed the VIX explode into the 20s.and far beyond.

Closing Brief

Another weak day in market land, with the indexes closing a touch lower. The VIX continues to show a near fearless market though, and remains under the important 20 threshold. 


Dow'60min

Sp'60min

Trans'60min

Summary

So, my original primary target of sp'1345 was almost hit today, and that is pleasing to see. The multi-month target of sp'1200/1175 looks a long way down, but as the past few weeks have shown, when the market does fall, the declines can be quite fast and extended.

*I remain on the sidelines, waiting for the next minor wave higher, which right now looks to not conclude until next Monday.

bits and pieces across the evening...as usual.

3pm update - another closing hour sell off?

Here we are again, one hour left of the trading day, and the question is..who wants to go long this closing hour? Well, in that case, the underlying weakness should probably start to appear again.


sp'15min

sp'60min

Summary

Lets see what the bull maniacs got in them, this closing hour. Considering the past few weeks, a last hour ramp seems..highly unlikely.

I remain on the sidelines, waiting for the next bounce to re-board the bear train.

UPDATE 3.35pm Weak market..a close at lows of the day very viable. Would likely complete a major third wave decline from 1430 to 1340s. Pretty good.