Colonel Kilgore would
have made a great trader. Were he a Permabear (could he be anything
else?), he'd be short, and he'd sure as hell not let himself get
rattled by any incoming fire from the bulls as they try to recover
the market intra-day.
No, the good Colonel
would stand tall, and stay focused on the bigger battle.
The ultimate line in
the sand
The real battle is about the ultimate market line - sp'1000. It remains such a distant target.
Clearly, the mainstream media would have us believe it'll never be
reached ever again. Most (but certainly not all) chartists dare not
suggest we'll be sub'1000 any time soon.
Days like today make
being part of this market worthwhile. We had some good dynamic market
moves. Even the VIX had a significant +20% move.
Right, lets get to the important charts!
Ignore the 'count'. What matters is that we are yet to even breach the October trend line. That points to around sp'1325.
Sp' weekly - a clear break
Clear levels are the 10MA around 1335..and the main October low trend line at 1310/15.
SP'60 min cycle - massively oversold after a triple down cycle. .
VIX 60min - a surge is in progress, but a pullback first?
The VIX move was pretty impressive, but certainly the VIX is still at very low levels from a daily perspective. Lets keep in mind that the daily 'first target' remains 24/26.
Wednesday outlook
Considering the VIX - and index 60min cycle charts - they are both heavily oversold, my best guess...
A morning bounce, which may stretch all the way into the afternoon. We have the possibility of good ADP jobs data, and there is the very real threat that the media will get all hysterical over the IPAD'3 launch..urghh.
Targets (best bullish bounce case)
SP' 1355/60
VIX 20. It'd seem unlikely VIX can go back under 19 in the near term.
I realise we could get another gap lower at the open, but that seems unlikely.
The plan
I myself will look to short the indexes and again go long VIX Calls sometime tomorrow. I believe there is good potential for substantially more dynamic moves of 3-4% in the coming days. The weekly charts all support some exciting possibilities for this Thursday and Friday.
More later this evening...perhaps