Volatility continues to melt lower

With equities gaining for a fourth consecutive day, the VIX naturally continued to melt lower, settling -4.9% @ 14.51 (intraday floor of 14.08) - the lowest level in over two weeks. Near term outlook is for the VIX to attempt to battle back to the 16.50/17.00 zone


vix'60min

vix'daily3

Summary

When taken together, the equity hourly..and the hourly VIX charts are offering a possible ceiling/floor respectively.

Best guess...sp' slips, with a natural retracement to 1800/1780, with VIX jumping back to 16.50/17.00
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Considering the broader turn in the weekly index cycles, I'm resigned to general equity upside into March/April...to new historic highs. If that is the case, the VIX will very likely slip lower to the 12/11s.

more later...on the indexes

Closing Brief

The US capital markets coped with the first major appearance of Fed Chair Yellen, building significant gains across the day, sp +19pts @ 1819. The two leaders - Trans/R2K, settled higher by 1.1% and 0.9% respectively. Near term outlook offers minor retracement, but with eventual new historic highs.


sp'60min

Summary

*from the closing hour price action, we probably have a multi-day top of sp'1823.

Downside fib-retrace..1790/80, although we could easily get stuck at the big 1800 level.  The point is...the notion of sub 1770 now looks completely off the table.
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..and thus concludes the first 'Yellen' trading day. Certainly, for the few bears out there, it was a day to forget.

With the daily close above the 50 day MA of 1809, things are now fully back to the bullish side. This has been an especially power rebound, since last Wednesday's spike floor of 1737, which now looks a very long way down.

With the weekly 'rainbow' charts now turning to an outright bullish green candle...the bulls are back.
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more later...on the VIX
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**every closing bell on clown finance TV should be drowned out by cheesy music.

3pm update - Yellen into the close

US equities are holding significant gains, with the sp' comfortably above the 50 day MA in the upper 1810s. VIX confirms the gains, -6% in the low 14s. Clearly, Yellen is going to solve ALL our economic problems within her first year (idiocracy reference..anyone?)


sp'60min

Summary

*oh jeez, Yellen is STILL talking..   see cspan'3   I can normally cope with 2 hours of fedspeak..but 4, 5...urghhh
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Clearly, we're due some kind of retracement after the ramp from 1737 to 1820, but hey...guessing a small cycle top is damn tricky.

The fact we're already above the old floor of 1815 (remember how that was a key break?), should be enough for anyone still short..to be waving the white flag.

However you want to count this nonsense..the trend sure ain't down, is it?
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Notable strength in UGAZ, +13%.

Is it getting cold again? There is the usual problem of decay though. Daily MACD cycle is kinda low..., but it doesn't look so great as a long.
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*watching the Yellen..into the close.... VIX looks set to lose the 14s.


3.02pm.. If you listen closely, you can hear cries of 'make it stop...make it stop'.

sp'1821.....a mere 29pts to new historic highs.  I don't expect that this week. or even next (since its opex), but in March...absolutely.


3.20pm.. 1823...and just like Yellen...this market keeps on going.   VIX set to lose the 14s.


3.40pm.. looks like we have a multi-day top of sp'1823...

Hourly MACD cycle is starting to rollover...nothing decisive yet..but for the swing traders out there, makes for an easy short-stop.
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*Yellen has finally stopped talking (I think).


3.43pm.. first retracement target...would be big 1800 psy level

Looking at the fib levels...1790/80 zone would be the primary target zone, before new historic highs.

3.50pm...1823 is a good ceiling....downside retrace to 1800/1780...but certainly NOT <1770, with the weekly charts now bullish.

3.57pm...rolling over............ back at the close !