Tuesday, 20 August 2013

Headed back under sp'1600

It was the fourth consecutive decline for the sp'500, settling at 1646, and looking set for a move <1600, if not this week...then soon after. The real issue is what happens later this year, a lower high (<1709)..or continued ramp into Christmas/spring 2014?

sp'weekly7 - near term bearish outlook

sp'weekly8 - mid-term hyper-bullish outlook


So...another day lower, and its somewhat amusing to see the mainstream mood change. The sp'1700s are now around 65pts higher..a good 4%. Even a 35pt bounce - back to sp'1680, will not do any real damage to what I believe is a new multi-week down cycle.

Autumnal problems?

The following remains something I will be keeping in mind for Oct/Nov


The only decent short-trade would be after that RS is confirmed. Were that scenario to occur, we'd see VIX back in the 30s, if not 40s. Yet for now, that is simply 'crazy talk'. First, we need a hit of that lower weekly bollinger, currently @ 1558, and rising each week.

Looking ahead

There is no sig' news/econ-data due tomorrow. Neither is there any sig' QE-pomo until this Friday.

I remain somewhat frustratingly on the sidelines, but hey, at least I've not been ground down on the long side. I continue to see a small bounce coming, back into the obvious gap zone of sp'1680/85.

sp'daily'3 - fib levels


With the weak closing hour, it looks like we'll break lower into the mid sp'1630s tomorrow/early Wednesday - where the 50% fib retrace is, along with the 100 day MA. With the FOMC minutes due Wednesday afternoon, I'm inclined to still believe the bulls will use that as an excuse to jump aboard, for a 3-5 day rally.

Goodnight from London