Wednesday, 30 May 2012

The 2009-2011 trend line - monthly cycle

A poster pointed out something to me which I've been remiss to note. The trend line from the index lows of March 2009, all the way up to last October'2011..such a trend line (purple) offers a possible market floor of sp'1225/00 by late June/July.  Will that be the low for this year though?


Transports, monthly (bearish/doom chart)


There is no question - as I've noted for the world indexes for 3 months now, that we are rolling over. The issue remains..where is the floor? When will the printing man..aka..the Bernanke appear? The Fed never pre-empts a market fall, so at what level might he step in to announce he is spinning up the printers again?

I have to think that sp'1225/00 will simply not be enough of a down cycle for the Bernanke to appear. The natural level in my view remains sp'1100/25 - no later than October.

Re: the Transports chart....

You can ignore the 'crazy talk' count, I'm not much a fan of it myself, but the key issue is that the 5 month flat top did break below 5000, and we're likely going down to at least 4500. Were there serious social/financial 'issues' this summer in the EU, then trans'4000..if not the natural 3500 Fib zone area appears still very viable.

**Special note...I do really welcome all comments, especially when it comes to targets for the indexes (stocks, VIX, currencies too!). so if you think I'm failing to note something important, please let me know!

As for Wednesday, there is only some housing data to come, doubtless the market will be pulled in both directions by more endless rumours from the EU. The bulls do have the ball right now, but they are facing multiple brick walls of resistance at sp'1340, 50/60 and especially the 1370/80 zone ;)

Goodnight from London City.