With the market failing to hold opening gains, the bears quickly seized control, and ground the market lower across almost the entire day. The close of sp'1612 is a mere 14pts above the critical low of 1598. Bears are on the edge of a massive break through.
sp'weekly7 'the high is in'
So...what to say about today? Well, I will say I am surprised that the bears are managing as well as they are. There certainly isn't anything scary in terms of econ-news out there. Is the market simply exhausted after its 7-8 month up cycle? Probably, but baring a break <1598, there is still the chance of another up cycle before this nonsense is conclusively done.
Of course, the bigger weekly cycles have been rolling lower on the MACD (green bar histogram) cycle for the past four weeks, so its not like the current equity weakness is entirely surprising.
Best guess remains..we hold the line of 1598. I'm trading it that way, am long (again) from earlier today, but if we break <1598, then its arguably a case of 'sell at any price'.
There is an array of econ-data tomorrow, including retail sales. Bears should be mindful that for the first time since last Thursday, there is a mid-sized QE of around $3bn.
Overnight futures trading will be important, but even more so, how we open tomorrow. Even a moderate gap lower in the 1605 area will put the market in imminent danger of a critical break down.
The bears have had another good run from 1648 down to 1610, good short-stops will be important. If the bulls do somehow magically ramp again, look for a daily close >1630.
Goodnight from London