VIX ran up to test weekly Intermediate-term resistance at 10.79, but closed beneath it. A buy signal awaits it above that level, with further confirmation above weekly mid-Cycle resistance at 14.75. It has an inverted Head & Shoulders formation that, when triggered, offers us a potential target for the next rally.
(TheStreet) Although it is early in the month and a lot can change between now and the 31st, October is on pace to be the least volatile month ever in the S&P. Not surprisingly, the lack of volatility has sucked the life out of the Chicago Board of Options Exchange’s (CBOE) volatility index, known simply as the VIX. Likewise, those attempting to go long volatility with inefficient ETF derivatives of the VIX have likely suffered surprisingly painful losses.
SPX tangles with Cycle Top resistance
SPX has been attempting to overcome Cycle Top resistance at 2560.92, to no avail. It also has challenged its Broadening Wedge trendline, but closed beneath it as well. A decline beneath the upper Diagonal trendline at 2545.00 may signal an end to the rally. A further decline beneath the Broadening Wedge formation at 2450.00 gives a sell signal and suggests a much deeper decline may follow.
(Reuters) – A surge in technology stocks sent the S&P 500 and the Nasdaq to record highs on Friday, but the gains were kept in check by a drop in banks as Wells Fargo missed revenue estimates for a fourth straight quarter.
Wells Fargo tumbled 3 percent, set for its biggest drop since mid-April, adding to the pressure on bank stocks after results from JPMorgan and Citigroup on Thursday stoked concerns about consumer credit.
NDX pressing against the top of the Ending Dagonal
NDX rallied to the top trendline of its smaller Ending Diagonal, closing under a technical stop at 6102.00. Short-term support and the lower Diagonal trendline lie at 5952.37. A decline beneath that trendline may produce a sell signal.
(ZeroHedge) Despite storms, wildfires, quakes, higher gas prices, and failed Washington policies, Americans are – according to The University of Michigan – their most confident since January 2004.
But we think it’s clear what is driving the optimism… total delusion!
Americans have never been more confident that that stock market will rally further in the next 12 months.
High Yield Bond Index reaches parity
The High Yield Bond Index appears to have made a final push to reach parity [Wave (5) equals Wave (1)], a common target. A break of the upper Diagonal trendline at 180.00 may tell us the rally is over. This is no time for complacency.
(Bloomberg) The largest European high-yield bond fund is now cutting down on risk as higher interest rates loom on the horizon.
“This is the time you want to be fearful and not greedy,” Sandro Naef, chief executive officer of Capital Four, said in an interview in Copenhagen on Thursday. “You want to have good downside protection.”
USB rallies above Long-term support
The Long Bond rallied above Long-term support at 152.41 as it emerges from its Master Cycle low. An aggressive buy signal may have been made, with confirmation above Intermediate-term resistance at 154.50. Should the right shoulder of a potential Head & Shoulders reach proportionality with the left, the rally may go to 165.00. However, should it go higher, there is the possibility of new all-time highs in USB. The next rally will tell.
(CNBC) U.S. government debt yields fell Friday, as investors digested another round of economic data and a batch of speeches set to be given by leading Federal Reserve members.
The yield on the benchmark 10-year Treasury note sat lower at around 2.277 percent at 2:39 p.m. ET, while the yield on the 30-year Treasury bond was down at 2.81 percent. Bond yields move inversely to prices.
The 10-year Treasury note yield neared a session low of 2.273 percent, which would be its lowest level since Sep. 27, when it yielded as low as 2.237 percent.
