Whilst many continue to question the current levels of the US equity indexes, across the Atlantic ocean, the most problematic of the EU PIIGS - Spain, is seeing its equity market making another attempt to break/hold the key 12K threshold. A monthly close >12k would strongly imply for much higher levels, not just for Spain.. but all world indexes.
Spain - IBEX, monthly, 20yr
The Spanish IBEX is currently net higher for May by 1.8%, with a rather bullish spike floor candle. First key target is 12K... the peak from late 2009.
Any monthly close in the 12000s should clarify that 15/16K is due by next late spring. A grander target would be 20K by mid 2017... but first things first.... lets see how May concludes... and if June can break/hold above 12000.
Disagree with this bullish outlook? Okay.... but then what about....
Last summer, I made it quite clear, any break >2500 would bode for 3500, and eventually the big psy' level of 5K. The rate of increase in the SSEC was even faster than I had expected, and 5K is viable as early as next month.
The point should be clear, the IBEX is in the same situation as the SSEC was just a few months ago. When you consider the QE of the ECB and low rates, the IBEX looks set to break 12K... and that is about as bullish a signal as it gets.
Friday will see CPI data, and that should certainly cause some dynamic price action in at least some parts of the US capital markets.
*it is highly notable that the Yellen will be speaking at 1pm on the economic outlook, and Mr Market will be closely listening. I would imagine a press release of prepared remarks to hit the market at 1pm, and a probable Q/A session stretching into the 2pm hour.
Since next Monday the market is CLOSED, there will clearly be some pre-holiday issues.. so expect increasing price chop into the weekly close.
Gold still broadly weak
Yours truly remains more focused on the precious metals than the equity indexes, and I remain short Gold - via GLD. Today saw some moderate weakness, but if the USD can resume higher tomorrow into the DXY 96s, Gold will be highly vulnerable to a major net daily decline.
In terms of near term downside, there will be some degree of support in the mid 114s (equiv' to spot Gold $1190s), but I think its possible we might see a Gold -$15/20 day... with GLD 113s. If so, I will certainly close out the short into the long weekend. As ever... its rarely boring :)
Goodnight from London