This week should see further gains, probably at least to around 1355/65...possibly as high as 1380/90. However, I hold to my original outlook. Nothing has changed, in fact things are exactly on track, and on schedule.
The VEU (FTSE Vanguard World Index - ex'USA) chart is very clear about the type of formation we have, and the broad direction for the rest of this year.
VEU, daily
A close up of the RS, of the giant H/S formation - as seen on the multi-year charts. The key levels of support/resistance are clear enough.
VEU, weekly'1
We have a very similar situation to the first deflationary collapse wave of 2008, although this formation is much bigger in both price and time.
VEU, weekly'2 - fib levels
VEU, monthly
Summary
So, this weekend we have the Greeks voting. It could be some days before we know if a coalition can be preliminarily agreed upon. Don't expect a result by Monday morning! Hell, we could even have a third election attempt in late July.
If the FOMC decision on Wednesday (2pm) results in extended QE-twist, that may indeed give the final extra kick to 1380/90 by Friday, however, I can't possibly see sp'1400 again this year. Any spikes higher are merely better levels to re-short from, and that remains my trading plan for the coming week.
The next big short
For the big players who are watching, there are some potential extremely profitable opportunities ahead. As noted, this week is expected to show some further gains, but I'm looking for VEU to get stuck around 41. Only with a break above 42 - the spring support level, would I consider the primary bearish outlook in jeopardy.
So watch for 41 by mid-week, and then a fail. Bulls get two warnings in the weeks ahead, a break under VEU 37.5 (sp'1266)..and then VEU 35.0. Once we're under 35...we should seem some real market upset occur.
Goodnight from London