Thursday, 23 October 2014

An exciting setup for the bears

Regardless of any near term retrace to the sp'1910/00 zone, market looks set for 1950/60s next week... coinciding with the next FOMC, when QE3 is set to be officially concluded. Frankly, the setup for November, is near perfect for the equity doomer bears.


sp'weekly7


sp'weekly9


Summary

A bounce was expected.. and we've already seen a huge move from 1820 to 1949.

My 'last line' remains around 1970... I certainly don't want to see any sustained price action above there.. otherwise the bigger monthly cycles will start turning back upward.
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Looking ahead

We have a fair few bits of econ-data, jobless claims, PMI manu', and leading indicators.

*there is QE of around $1.5bn.... the penultimate QE-pomo day.... :)
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Goodnight from London

Daily Index Cycle update

US equities closed very weak, having broken a new cycle high of sp'1949, but settling -14pts @ 1927. The two leaders - Trans/R2K, settled significantly lower by -2.0% and -1.4% respectively. Near term outlook is for 1910/00 zone, before 1950/60 next week.


sp'daily5


Dow


Summary

Suffice to say... a new cycle high of sp'1949 - some 129pts higher across just 6 days... but now we're in some kind of minor retrace.

Market will likely hold the 1900 threshold, before renewed upside next week to 1950/60s.
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a little more later...

Wednesday, 22 October 2014

Volatility back on the rise

With US equities cooling from a morning high of sp'1949, the VIX rebounded from a morning low of 15.56, settling +11.1% @ 17.87 (intra high 18.43). Near term outlook is for 19/20, before renewed melt lower to the 15/14s by the FOMC of next Wednesday.


VIX'60min


VIX'daily3


Summary

With equities back on the slide, it was not surprising to see VIX break out of the big down trend from 31.06 - as best seen on the hourly chart.

A short term bounce to the big 20 threshold looks viable, I'd be surprised if we break much above 21/22..... and that would need at least sp'1910/00.

As things are.. best guess, sp'1950/60 with VIX 15/14s.... before a possible 'crashy' setup for November.

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more later.. on the indexes

Closing Brief

US equities closed very weak, sp -14pts @ 1927, after a new cycle high of 1949. The two leaders - Trans/R2K, settled lower by a very significant -2.0% and -1.4% respectively. Near term outlook is for 1910/00 zone, before renewed upside to 1950/60s.


sp'60min


Summary

A pretty interesting day, having broken a new cycle high of sp'1949, but with a rather strong swing of over 1%.

There is a rather obvious gap to fill, and market should find support in the 1910/00 zone.. where the 200 dma is also lurking.

Outlook is for broader upside into next week... we still look set for 1950/60s.. which would probably equate to VIX melting into the 15/14s.

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more later... on the VIX