Tuesday, 29 May 2012

12pm update - only the bigger perspective keeps me balanced

Whilst this latest Monday morning rally is still holding to some extent into this afternoon, I'm again trying to keep in mind of just what is happening in the grand picture...


If you look at the previous two major down cycles of summer 2010/11, you'll see that we often see a significant bounce in the first 1 or 2 down months.

So, as long as we close Thursday (the end of May, how can it be almost June already?), no higher than about 1355/60, the trend is still very much downward.

In the meantime of course, we've probably a few more days of nonsense to come, maybe even a week or two. Yet, its just noise in the bigger picture. I envy the bigger players, who can sit back with non-leveraged ETFs, or super long dated index Puts. They can merely sit back and relax across this summer - with a good stop, no higher than the peak of sp'1422, which should arguably be tightened to around 1395/80.

Quick update on the sp'60min cycle

*ignore the wave count on my hourly charts, I'm as confused as anyone else out there lately. What I am certain of, is the bigger monthly cycles.

IWM, daily - bearish outlook

*most interesting of all so far today, the Rus'2000 index, is putting in a black candle..warning of at least 'weakness after the opening gap UP' in this market. I can't fathom to guess whether this is the top of a 'wave'2 - considering the daily MACD, I'd say 'no, there is more upside to come'. But hey,...here we are..and black candles are NEVER to be dismissed lightly!

Time for lunch!