Friday, 15 January 2016

Short term floor

US equity indexes have seen a clear short term floor of sp'1878, already rebounding into the 1930s. The fib' retrace/bounce zone of 1956/80 looks highly probable, along with VIX cooling back under the 20 threshold. However, the broader outlook remains absolutely bearish... as in ABSOLUTELY.

sp'weekly1c - bear flag scenario



I shall highlight the monthly cycle again, to note that until the bulls attain a monthly close back above the monthly 10MA (currently @ 2037), they have nothing to be pleased about.

As it is, a second consecutive net monthly decline looks a given, and that will further clarify that a bearish spring/early summer is ahead.

re: weekly cycle - bear flag. If you consider that this week will close at least moderately net positive, with another net gain next week, but with equities likely to unravel again, no later than FOMC week.

Right now, a break under this mornings low of sp'1878 looks viable in the first half of February.

Looking ahead

The week concludes with a truck load of data...

PPI, Retail sales, Empire state manu'
Indust' prod', consumer sent', bus' inventories

*a trio of Fed officials are set to appear, most notable.. Dudley

It is also important to note it is OPEX, so expect increasing chop into the weekly close. Further, because next Monday is CLOSED, there will likely be increased volume as some traders (long and short) wish to close out ahead of a 3 day weekend.

Goodnight from London