Friday, 11 January 2013

Closing Brief

The main indexes closed largely flat, on what was a very quiet Friday. Its important to recognise that the Transports and Rus'2000 remain well above the Sept' QE highs, whilst the SP/Dow are fractionally below, with the Nasdaq trailing - no doubt held lower by AAPL.





Well, it sure was a tricky week, although it has to be said, the trading range was VERY narrow, from sp' 1451..and then 1472. We're only talking about 1.5% or so.

For the record, I'm still holding short, and still seeking a retracement. It had better come next week, or I'll be rather disappointed..and also a little surprised.

Have a good weekend.

*there will be the usual big post, late Saturday, probably on the US monthly index charts

3pm update - the end to a difficult week

The closing hour of what has probably been a difficult week for many, not least on the bearish side. Minor declines on Mon/Tuesday, but then slow melt from sp'1451 to the low 1470s. Can the bulls break the mid-Sept' high of 1474 to close the week? I'm guessing no, but it won't take much for the bots to spike it higher..and do a short-stop run.




Its almost time to lock the doors for the trading week...thank the gods.

From a technical perspective, a close >1474 would be significant..I hope it doesn't close like that.

*metals remain weak, although on the bigger weekly charts, the down cycle looks complete.

Something I just noticed... FCX, death cross..due.

Its had a good bounce since the take over of two Oil/Gas companies, but its approaching very significant double resistance with the 50..and 200 day MA..also about to cross.

back after the close

2pm update - daily charts offer some bearish hope

Whilst the indexes remain largely stuck, its important to keep the bigger daily charts in mind. The VIX certainly looks to have floored (at least in the near term) in the 13s, and the SP' sure appears stuck under the mid-Sept' QE high of 1474.




A key level on the daily chart is the giant gap @ 1425. Its not seen on the spx' chart, but more so on the index ETFs, such as the SPY.

The low end of a retracement was indeed in the mid that zone is certainly a natural place for any decline.

Yet..are we really looking at a move from 1472 to 1425 next week, in opex week no less?

Lets be clear, a move to the low 1420s AFTER next week would be a break of the rising channel support, and I can't see that happening.

So, if we are going to get a retracement to 1440/25..then it'll be next week, rather than the tail end of the month.

As ever..its just a thought..from someone who is still very much 'in love with the downside.'

12pm update - the bears need to close under sp'1465

The main indexes are indeed stuck, with the SP' failing to break the 1474 high. There are certainly a few signs of weakness out there, but really, nothing dynamic is going on so far today. Perhaps Monday will offer something?





As the hourly index charts all show, the bears need a break of that rising channel, which by the end of today will be around 1465. A close under that..opens up the 1450s on Monday.

Lets be clear though, the daily chart is still VERY bullish, and as I keep noting..even a move down to the low 1420s..- by the end of next week would do NO damage to the mid-term outlook for sp'1510/20.

Metals remain especially weak...

*metal charts...coming...soon....

GLD, daily

SLV, daily

Its starting to get a little ugly  Daily MACD cycles ready to rollover...hmm.

UPDATE 1pm  You can see how a close of 1465 would be useful, in that it'd make this at least flat week, after last weeks hyper-ramp candle.

 Underlying trend is clearly still UP on the weekly charts, and even a retracement next to the low 1420s wouldn't wreck the trend since November sp'1343 low.

 With 3 hrs to go of the trading week, lets see if we see some minor selling into the weekend.

11am update - stuck under 1474

Mr Market is still stuck under the mid-Sept QE high of 1474. Of course, the Trans/R2K are already well above that level, but still, with the VIX apparently floored...perhaps we'll get that 'minor retracement' after all. This market remains.....annoying.

sp'60min4 - retracement



On the hourly chart, there is a clear up channel, bears need a close <1465. Even that seems ''difficult'.

Right now, the VIX daily chart is probably the one thing those still seeking a retracement should be focusing on.

A brief VIX spike into the low 16s would still seem a 'reasonable' target, which in theory, should equate to at least sp'1445/40.  The daily chart/lower channel would permit 1425 - at the end of next week, and still do NO damage to the bullish mid-term outlook.

Metals are weak...not far from breaking what are significant multi-month lows.

10am update - is it the weekend yet?

The smaller 15/60min market index cycles are certainly on the upper side of being overbought. Perhaps a little weakness will be seen today, but there sure doesn't seem to be any serious catalyst for even a moderate 7-10pt move lower.




I'm really not expecting much of anything today. We'll probably close flat, maybe the market makers want to pin the SPY @ 147 ?

The question remains, do we get a retracement, or just keep going?

*I am resigned to a broader up move continuing into February, prime target would be sp'1510/20.

Bears beaten down

It is incredible to consider how things have flipped since the morning of New Years Eve. The market has battled higher from sp'1398 to 1472 in just 8 trading days. At this rate of increase, we'll be testing the Oct' 2007 highs of sp'1576 next month.

sp'monthly2 - Keltner


So, we're now a mere 2pts shy of the mid-Sept' QE highs. It seems a given that we'll break 1474 tomorrow..along with Dow'13600, and the Nasdaq similarly following. As the Keltner chart displays, a very natural target for February would be around sp'1510/20.

The fact the Trans/R2K are already well above the Sept' highs should be considered a huge warning of further upside into the spring.

USD - gets the smack down

One issue I did not highlight during today was the dollar, which really suffered, as the Euro soared. Today's move is the biggest closing decline since early August.

From what I gather, it seems Mr Draghi was trying to convince everyone that the EU will be back on the 'road to growth' sooner than most were forecasting. Clearly, we should all have 100% confidence in such econ-predictions from the ECB. Their track record is one of accuracy, right?

USD, daily

USD, monthly2, rainbow

We now have two red candles on the monthly rainbow chart, and its looking very bad for the equity bears. If the dollar breaks <79 in the next few days, then everything will be pressured higher, especially the metals and Oil.

Volatility update

The VIX closed the day -2.3%, and now rest @ 13.49.

VIX, weekly, 2yr

The weekly trend indicators are naturally still all negative, and even if the VIX trades flat, its going to take some weeks to see everything level out, and offer the next opportunity to move higher. Even a brief spike higher to 16/18 - where there is a giant gap, would make little difference to the underlying momentum.

As for tomorrow, considering 'everything' - not least the weak dollar, sp'1474 looks set to be broken above, and there really is nothing but empty air until sp'1510/20. I can only imagine the glee and level of hyper stock-pumping the clown network cheerleaders will be doing across the next few weeks.

For those still seeking a retracement...


Sp'1445/40 looks a long way down right now, but more so, because of the underlying lack of 'scary news' to kick this market back lower.

When you consider the price action in the above hourly chart, its utterly depressing how it can takes weeks to drop a few percent..but mere seconds for an opening gap of 2% higher to claw it all back.

Goodnight.. from a fairly disillusioned London

Daily Index Cycle update

The main indexes closed higher for the second day running. The gains were around 0.5-0.75%, certainly nothing major, but they now bring the SP, Dow, and Nasdaq within range of taking out the Sept'2012 highs - as the Trans/R2K already have.





Despite a little weakness on Monday and Tuesday, the market has again put in a higher low..and we're now breaking higher.

There really isn't much hope for the bears, aside from what is now a VERY slim hope of a retracement down to the 1440/25 level.

A gap above the sp'1474 high is now easy for the market to achieve, a mere 2pts away.

Frankly, I'm somewhat dismayed at this latest move.

We've now rallied 74pts in just 8 trading days. At this rate, we'll break the 2007 highs by the end of this month.

A little more later.