sp'weekly8
R2K, weekly'4, rainbow
Summary
*the weekly 'rainbow' candle for the sp'500 has indeed turned blue, and even if equity bulls can hold the 1860s across the rest of the week, unless we close Friday >1880, the weekly charts will be flashing a 'provisional warning of trouble'.
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So...a day for the bears..but...taken together, I am still holding to the original outlook, of broad upside into the next FOMC of June'18.
If we break under sp'1860..along with R2K 1080, then I'll drop the upside scenario.
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..and if we do break...where to?
Based on previous cycles, first downside target for the headline sp'500 would be the lower weekly bollnger, currently in the 1780s.
sp'weekly'9
If 1800/1780 zone is hit in the coming weeks...then a bounce...to be followed by some form of 2-3 week collapse wave to the 1625/1575 zone. Indeed, the 'big short' trade would be on the bounce, that would be the safer short side trade..and the most profitable.
My greatest concern for this summer/autumn would be a HUGE response from the central banks, not least from the ECB and the JCB. Frankly, I'd not be confident of calling a multi-year top unless we see Dow in the low 13000s.
Looking ahead
There isn't any econ-data tomorrow of note. In addition to Yellen, there are three other fed officials on the loose, and as ever..Mr Market will probably be paying some attention to them.
The FOMC minutes are due at 2pm..and that will likely be the major market moving event of the day.
*next sig' QE-pomo is not until next Tuesday.
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Still trying
Yours truly does indeed still remain on the long side. I have 'last line in the sand' stops, IWM <106.90, a touch under the February low - roughly R2K 1078. If I get the kick, it will be damn annoying, but from there, I would look to pick up a short side trade. As ever...like the rest of you...I am trying.
Goodnight from London
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Video update from SMF
Mario from SMF is not one to get overly bearish, so...his outlook on the longer term is one to at least reflect upon.