Friday, 29 June 2012

Eyes on the Bigger Picture

Today was indeed somewhat crazy, annoying, and a stark reminder of the twisted nature of this market. To close today, here are a few different things, but together, they should be useful for tomorrow and for consideration into next week.

sp'15min - Friday scenarios

I never normally do scenario outlooks for such a small time frame..but after todays closing hour...I think it might be useful.

What is important I think is that if minor wave'2 (see hourly cycles) is not yet done, then we've still to put in one final high. Now, frankly, this is beyond annoying...but even if we open hgiher, it might not be too bad tomorrow for the bears

There is the slight possibility that even if we open up sp+6pts (1335 - which would be a new high)...we could still see a swift reversal..and even close significantly red.

After all, who wants to hold across the weekend? Only with a daily close 1335/40+, would I get concerned about potencial further index gains.

Now...reflect on the weekly chart...

sp, weekly

There is NOTHING bullish about the weekly cycle. Only a break above sp'1363 would make me re-consider my broad outlook..and even then...we have this...

sp' monthly., HS

Now, as I've said before, bears would REALLY prefer a June candle closing at least moderately red. Right now, that would indeed require at least a Friday close of sp-19pts...preferably -20/25.

The weekly 10MA at 1301 will be an important level to break in the days ahead. The 'big money' will probably pile into short positions once we break <1300 again.

Holiday week

Next week the market is closed Wednesday for July'4.. and arguably it will be even lower volumn than normal. the end of this weekend, EU summit no'20 (or is 19?) will be complete..and we'll surely see no progress (as usual). How will Mr Market cope with that?

I suppose after today, some would say 'ohh, we'll rally anyway', but I would refer them to FOMC week. Unless we break 1363..I can't presently take any bullish talk seriously.

...and finally

VEU, weekly

In FOMC week we saw a brief break above the 10MA..but it failed. Unless we close over 40.07 tomorrow, the VEU chart remains a stern warning to the bulls of.trouble ahead.

Clearly, bears need to see a break of 35.0 in July to support any notion of sp'1100s. never mind anything under 1000 in late Autumn.

So..keep in mind how we open tomorrow. Amongst at least 3 pieces of econ-data, we have the Chicago PMI data at 9.45am. That number has been dire across most countries lately, and I don't expect the latest USA number will be any better.

Best guess, an opening gap higher (to the understandable horror of some bears)...and then a hard reversal...closing lower..perhaps even below todays low.

One thing is for sure...this market sure is ill. Is there a doctor at the NYSE ?

Goodnight from London