Monday 21 May 2012

Closing Brief

A strong close today, the first decent 'rally into the close' we have seen in around four weeks. The big decline in the VIX was good confirmation for today's rally. Lets take a quick overview of the main index hourly cycles


IWM (representing Rus'2000 small cap)



Dow



Sp'30


Summary

We remain in the down channel on ALL indexes. The broad trend is still currently downward. However, today's action - when you consider the daily and weekly charts, is very suggestive of a multi-day bounce/rally.

It will be very important for the bulls to close tomorrow either flat..or marginally higher. Strong follow through of 0.75/1.0% would be very significant, and would open the door to a swift move to 1340...and more likely 1370/80 sometime next week.

More later..dealing with the VIX, those daily cycles..and the bigger bearish outlook