Friday, 24 October 2014

The ramp continues

US equities have now climbed 141pts since last weeks low of sp'1820. With the 'old leader' - Transports, already close to breaking a new historic high, the bigger bearish scenario for November is in serious jeopardy.


sp'weekly7


Trans, weekly


Summary

For me, the transports will be key to watch across the next 4 days.. into the FOMC of next Wednesday. So long as the Trans' doesn't break a new high, there is still a chance of a bigger bearish down wave in November. As things are... its already too damn close for comfort.

As for the sp'500, the weekly 'rainbow' candle turned green this afternoon, but closed the day blue. Still, another move into the 1960s looks due.. the issue is whether this is merely a 'crazy bounce'.... or the start of a giant new wave to the sp'2100s - a level many are still seeking in early 2015.


Looking ahead

The only data due is new home sales.

*next QE.. the FINAL QE.. is next Monday.
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Video update from Carboni



I do strongly agree with Oscar on Gold, and another crash wave in the precious metals - along with the mining stocks, could occur across the next 3-5 weeks. I look forward to further capitulation amongst the gold bug maniacs.. when Gold is testing the giant $1000 threshold.
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Ebola headlines make for a twitchy market

As of writing (9pm EST), another Ebola headline has hit the market, and the futures have been knocked moderately lower by around -0.5%, offering an open of sp'1940 or so.

Reading around this evening, I see a fair few people open to the scenario of a VERY powerful down wave in November/early December. So long as we aren't consistently trading above sp'1970 in the days ahead, I'll certainly also strongly consider it.

For me, the two warning levels will be sp'1900... and then the key low of 1820. If the latter is taken out, there really isn't any reason why the 1650s - the key fib retrace target, wouldn't be hit within a matter of days of such a break.

Goodnight from London

Daily Index Cycle update

US indexes closed strongly higher, sp +23pts @ 1950 (intra high 1961). The two leaders - Trans/R2K, settled higher by a rather powerful 2.1% and 1.8% respectively. Near term outlook is for continued upside into the FOMC of next Wednesday.


sp'daily5



R2K



Trans


Summary

Suffice to say.. the Wednesday decline looks to be a micro washout of no importance, and we're broadly still climbing.

There seems litlte reason why the market can't climb at least a little higher into the middle of next week. Whether the market can break and hold the sp'1970s... that is difficult to guess.
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a little more later...

Thursday, 23 October 2014

Volatility back on the slide

With US equities opening sharply higher, the VIX was knocked back into the 15s. Despite an opening reversal candle, the VIX failed to climb, settling -7.5% @ 16.53.  Near term outlook is for VIX to melt lower into the 14/13s by next Wednesday.


VIX'60min



VIX'daily3


Summary

Little to add. VIX looks set to remain subdued for another 3-4 trading days.
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more later... on the indexes

Closing Brief

US indexes saw renewed gains, sp +23pts @ 1950. The two leaders - Trans/R2K, both settled powerfully higher, by 2.1% and 1.8% respectively. Near term outlook is for continued upside into the FOMC of next Wednesday.


sp'60min


Summary

Suffice to say... this morning should have opened moderetely lower, to at least 1915/10... but no.. .a large gap higher.. and we just keep on climbing.

For now, this is no market for the bears... and it is arguably a case of 'no shorts' until next Wednesday afternoon.. when the fed will officially terminate QE3.

However, if the Transports has broken new historic highs by that time, the notion of trying to re-short this market is arguably off the agenda.
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more later... on the VIX