VIX made a swing low at Long-term support at 18.21 on Friday morning, then rose to challenge Intermediate-term resistance at 20.27. While the VIX is on a long-term sell signal, this level would be considered “neutral.” However, the buy signal (NYSE sell signal) may be confirmed with a rise above the Short-term resistance at 22.66.  A breakout above the neckline suggests a very robust follow-through rally that may last up to a month.

(ZeroHedge) VIX mini ‘flash-crashed’ this morning to test its 200-day-moving-average to the lowest level since Dec 31st 2015. For now, it appears to have marked a low…

(Bloomberg) Hedge funds and investors in exchange-traded notes are plowing money into bets that pay off should last week’s soothing of U.S. stock market turbulence prove temporary.

SPX makes a 50% retracement. 

The SPX made a 50% retracement of the decline from November 3 to February 11. This is a normal retracement pattern and anticipated by many market technicians. The January bottom support at 1812.29 was broken and an open invitation for a retest once this rally fails. The Cycles Model suggests the decline may start immediately.

(ZeroHedge) With the S&P retesting its stubborn support level of 1,812 as recently as a week ago, many have continued to predict that failures to breach said level would result in violent bear market rallies, most recently JPM which however “should be faded”, as it noted three weeks ago, looked at earnings and said that “16x and $120 create a firm ceiling at ~1950 and thus moves toward that level should be faded.”

Others such as BofA’s Michael Harnett, and overnight Citi, went so far as saying that unless the G-20 comes out with a big stimulative surprise, it would open the path for the market’s next leg lower, below this critical support.

NDX ends week at Short-term resistance.

NDX challenged weekly Short-term resistance at 4228.83 this week, closing just above it. Its retracement was a weaker 46% of it decline. Should selling resume, NDX may decline to 3000 or lower.

(LATimes) Even in the volatile world of technology stocks, it was a stunning moment for investors.

Shares of the tech companies LinkedIn Corp. (LNKD) and Tableau Software Inc. (DATA) dropped like an anvil from a cliff early this month after the firms reported disappointing growth forecasts. Their stocks plunged more than 40% in a single day and sparked a sell-off in other tech stocks as well.

“I don’t remember seeing a reaction as violent as that since the dot-com bubble burst” in 2000, said Pat O’Hare, chief market analyst at Briefing.com, an investment research site.

High Yield Bond Index may have completed its rally.

The High Yield Index made some wide-ranging moves this week, but could not overcome its November 3 high. MUT is no longer on a sell signal, but may resume that status next week by declining beneath the trendline and mid-Cycle support at 139.00.

(ETFTrends) As equities markets bounce back and oil prices edge higher from a 13-year low, the rising risk-on sentiment has brought fixed-income investors back to the high-yield bond exchange traded funds.

Over the past week, the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK)attracted $340.2 million in net inflows, iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) added $945.4 million and iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEArca: LQD) saw $387.5 million in inflows, according to ETF.com.

After underperforming government bonds during the risk-off environment, corporate debt is finally starting to outpace Treasuries. Over the past week, HYG rose 1.1%, JNK gained 1.3% and LQD increased 1.3%, whereas the iShares 3-7 Year Treasury Bond ETF (NYSEArca: IEI) was up 0.2%.

The Euro pulls back to Intermediate-term support.

The Euro pulled back even further to Intermediate-term support at 108.99.  The Cycles Model suggests a period of strength beginning imminently and lasting approximately three weeks with the minimum Pennant target in reach.

(Reuters) A wall of consumer and business angst is standing in the way of euro zone economic recovery and there are renewed signs of deflation in the bloc’s biggest countries to worry the European Central Bank.

Data from across the 19-member currency bloc on Friday will put pressure on the ECB to take strong additional policy actions at its meeting in March on top of the unprecedented stimulus it is already giving.

Reports of falling prices in Germany, France and Spain along with an array of weak sentiment surveys for the bloc as a whole will also provide ammunition to those arguing that governments must now loosen their budgets to stimulate growth.

EuroStoxx bounces from its Cycle Bottom.

EuroStoxx bounced from its weekly Cycle Bottom support at 2819.43, but stopped short of its Short-term resistance at 2973.06.Having failed to overcome resistance, it may resume its decline.Crossing beneath beneath Cycle Bottom support reinstates a probable sell signal.The Head & Shoulders neckline defines the magnitude of the decline..

(Bloomberg) European stocks rose for a second day as investors assessed corporate results, and amid speculation that central banks will support global growth.

Eni SpA climbed 5.1 percent after the Italian oil company’s exploration and production division performed better than expected and output increased to the highest in five years. BASF SE added 3 percent after proposing a higher dividend. Gamesa Corp Tecnologica SA climbed 5.8 percent after moving its earnings goals a year forward to 2016 on surging sales.

The Yen breaks out.

The Yen broke out above its two-week-old high before pulling back into its trading range.The immediate implication of the breakout is a probable rise to an average near 92.74 or higher. The Cycles Model suggests a potential period of strength lasting through the second week of March.The (short-term) pennant target may come in a matter of a week or two, while the Cup with Handle target may take up to a month.

(Reuters) The yen gained against the dollar on Friday and with one more trading day to go was on track for its best month in 7-1/2 years, as investors eyed a G20 summit they did not expect to produce any agreement to stop competitive currency devaluations.

With recent market turbulence front and centre of discussions at the Group of 20 meeting in Shanghai, leaders were under pressure to agree a coordinated stimulus programme that could stop a global slowdown from turning into something worse.

The Nikkei meets neckline resistance.

The Nikkei retracement from the February 12 low was met with resistance at the neckline.Some analysts would not consider the Head & Shoulders formation as valid if the neckline is violated.However, the Nikkei stayed within the 3% rule to keep the pattern under active consideration.The Cycles Model suggests that the rally may be over with three weeks of decline ahead.

(Reuters) Nikkei soared to a 2 1/2-week high on Friday morning after risk sentiment recovered on Wall Street’s gains and the weak yen, but individual stocks such as Sharp Corp were also in focus.

The Nikkei rose 0.6 percent to 16,241.89 in mid-morning trade after rising to as high as 16,472.50 earlier, the highest since Feb. 9. The benchmark index has gained 2.7 percent for the week.

U.S. Dollar challenges Intermediate-term resistance.

USD challenged Intermediate-term resistance at 98.48 this week, completing a 50% retracement of its decline.The Cycles Model suggests a long decline may follow, lasting through mid-May.It may finally turn traders bearish the dollar..

(Reuters) The dollar rose broadly on Friday after mostly upbeat U.S. economic data renewed some expectations that the Federal Reserve could raise interest rates again this year.

The dollar index, a measure of the greenback’s value against six major currencies, posted its best weekly performance since November. Against the Japanese yen, the dollar rose to a more than one-week high.

Friday’s data showed that U.S. economic growth slowed in the fourth quarter, but not as sharply as anticipated, while consumer spending rose. Those reports, if followed by another robust U.S. nonfarm payrolls report next week, should put rate hikes back on the Fed’s agenda.

USB consolidates.

The Long Bond consolidated this week, establishing a new trading range.The pullback may be a prelude to one more probe to or above the Cycle Top.Over the next month we’ll be looking for the 34.4-year high in Treasuries. The long Treasuries trade is getting very crowded.

(CNBC) Low interest rates are here to stay for the time being, and may even fall further, according to one prominent investor.

Scott Minerd, the global chief investment officer of Guggenheim Partners, said on Monday he sees the 10-year Treasury note yield falling to 1 percent, and perhaps even lower, before the end of 2016.

Investor worries about the health of the global economy is leading them to the shelter of government bonds, pushing down yields.

Gold continues its consolidation.

Gold continues to make wide-ranging swings, but doesn’t show what direction it will go.A rally above 1263.90 would indicate another rally is brewing, at least for a while.However, a decline beneath its consolidation bottom at 1191.00 would indicate that the party is over.Once complete, Ending Diagonals are completely retraced, leaving this move as a potential false breakout to the downtrend.

(WSJ) Gold prices fell Friday as the U.S. dollar, oil prices and equities around the world sapped the precious metal’s haven appeal.

Gold futures ended the day down 1.5% at $1,220.40 a troy ounce on the New York Mercantile Exchange. The metal had been seesawing in recent days amid fluctuations in world equity markets and volatile oil prices, after surging nearly 18% to start the year amid financial market volatility.

Crude challenges neckline resistance.

Crude probed above the Head & Shoulders neckline and weekly short-term resistance at 32.13, but failed to overcome its previous high at 34.88 or Intermediate-term resistance at 35.71.The Cycles Model suggests today may be the Pivot high for WTIC.Crude may resume the decline through late March, with Cycle Bottom Support continuing to fall away at 16.45, supporting the target analysis.Analysts won’t be calling for a bottom when it finally arrives.

(ZeroHedge)One week ago, we reported that even as traders were focusing on the daily headline barrage out of OPEC members discussing whether or not they would cut production (they won’t) or merely freeze it (at fresh record levels as Russia reported earlier today) a bigger threat in the near-term will be whether the relentless supply of excess oil will force Cushing, and PADD 2 in general, inventory to reach operational capacity.

As Genscape added in a recent presentation, when looking specifically at Cushing, the storage facility is virtually operationally full (at 80%) with just 4-5 more months at current inventory build left until the choke point is breached, and as we have reported previously, storage requests for specific grades have already been denied.

Shanghai Index sells off from mid-Cycle resistance.

The Shanghai Index rallied toward mid-Cycle resistance early this week, but sold off strongly on Thursday. The key pivot was due on Tuesday, but appears to have been activated on Thursday morning.The Cycles Model calls for a three week decline that may shock investors.

(ZeroHedge) Last April, China had an idea about how to boost the country’s dying credit impulse.

As we’ve been at pains to explain for more than a year, China is attempting to do the impossible. They need to deleverage and re-leverage all at the same time. Efforts to rein in the mammoth shadow banking system after years of expansion put pressure on an economy that was already decelerating and by the end of 2014, Beijing was struggling to figure out how to keep credit flowing without embedding more risk into the system.

One idea was to supercharge the country’s nascent ABS market which was barely producing $50 billion in supply per year (for context, consider that the US auto loan-backed ABS market alone saw $125 billion in issuance last year).

The Banking Index is becoming more volatile.

BKX made a weaker bounce this week, after a flash crash-style 3% loss at the open on Wednesday.Attainment of Cycle Bottom at 63.66 is no longer assured.The Cycles Model suggests a probable Pivot reversal this week that may resume the larger decline. Remember, BKX is a leading index.

(NYTimes) Long gone are the days on Wall Street when our leading investment banks were stock-market highfliers.

When Goldman Sachs went public in May 1999, for instance, after years of internal debate, it was valued at more than four times its book value. That was a slight premium above where its then-biggest competitors, Morgan Stanley and Merrill Lynch, were trading.

That seems like a long time ago now. Not a single one of the leading American investment banks – supposedly the best in the world – trades above its book value. They trade like utilities. Goldman trades at 0.86 times its book value; Morgan Stanley trades at 0.74 times its book value; and Bank of America, which now owns Merrill Lynch, trades at just more than half its book value. JPMorgan Chase, our largest bank by asset size, trades just below its book value. (The dynamic is even worse in Europe, where the big banks seem to be melting down in real time.)

What gives? And is there any chance the market will ever again take a more charitable view of the value of these so-called “Too Big To Fail” banks?

(ZeroHedge) In what the companies billed as “a new effort dedicated to building a better American housing system,” Quicken and Freddie announced what they called an “innovative solution” to “meet the needs of emerging markets, including millennials, first-time homebuyers and middle-class borrowers.”

What’s “innovative” about Quicken and Freddie’s “solutions”, you ask? Well for one thing, they’re willing to give millennials a home loan with just 3% down. That’s great if you’re a struggling graduate waiting tables and having a hard time saving enough money for a down payment, but it’s not so great for the stability of the US housing market and/or the financial system which got itself into all kinds of trouble making just these kinds of loans nine years ago.

(ZeroHedge )One week ago, when we commented on the latest weekly update from Credit Suisse’s very well hooked-in energy analyst James Wicklund, one particular phrase stuck out when looking at the upcoming contraction of Oil and Gas liquidity: “while your borrowing base might be upheld, there will be minimum liquidity requirements before capital can be accessed. It is hitting the OFS sector as well. As one banker put it, “we are looking to save ourselves now.”

In his latest note, Wicklund takes the gloom level up a notch and shows that for all the bank posturing and attempts to preserve calm among the market, what is really happening below the surface can be summarized with one word: panic, and not just for the banks who are stuck holding on to energy exposure, or the energy companies who are facing bankruptcy if oil doesn’t rebound, but also for their (now former) employees. Curious why average hourly earnings refuse to go up except for those getting minimum wage boosts? Because according to CS “It is estimated that ~250,000 people have lost their jobs in the industry in the last 18 months.”