Friday, 22 June 2012

Overnight - bearish bits and pieces

A few little bonus notes....after my most recent semi-coherent ramblings. First, lets take a slightly broader look at the daily chart. There is of course the very clear H/S formation, then the break of support - with 5 waves down..and now what is probably the completion of wave'2 (blue)..and the start of 3.

For the bears, to confirm wave'2..we need a new low <1266. I suppose that's possible as early as the tail end of next week. Sp'1225 would make for a really nice minor' wave'1 of 5. There is some VERY significant long term trend support around 1225 on the monthly charts, so bears need to be careful around there.

sp' daily, bearish outlook

No one knows of course how far a given wave or how many waves might constitute the next multi-week move will be. However, the rough count above is something to start a few ideas from. I'd look to the July 6 jobs data as a critical marker point in the market.

I would guess the general wave itself - to reach the low sp'1100s will take 5-7 weeks. We'll certainly see some bounces along the way. From a MACD cycle point of view, we can easily fall for the next 2 trading weeks...without any concern of being oversold.

The daily 10MA will now be prime resistance, today's close under it....a good bearish sign.


A good day for the bears. Reading around this evening, its amusing just how many "sp>1422 new highs coming" posts I'm still seeing! Those same people sure never saw today coming, and they sure don't see sp'1100s coming either.

The primary outlook - as based on the monthly cycle remains 1150/00 - by end July. I suppose it might take until early August. I don't much care either way. Price level is what matters, and I'll be shorting all the way down until we're in that range.

Other targets - remain unchanged.
WTIC Oil, $60
Gold $1300, Silver $22

*also a break of VEU (world index chart) <35, will be a key chart to follow

Key signs

Those bears looking for a break under the critical sp'1100 level, should look to some specific world indexes for more significant breaks. IBEX <5000 would be a VERY important one to keep in mind...Any break of 5k..and IBEX will hit 3k before end November.

VIX 50+ would be another one of the top signs

It remains (yet again)..a case of whether the Bernanke will initiate QE3..enough to stop the market breaking under sp'1100 - along with VIX 50+. That will all become clear around August time.

Friday thoughts...

There is no econ-data due this Friday. So, it'll be all about the technicals, and any spurious 'EU rumours'. I'm seeking a Friday bounce to sp'1335/40. I suppose its even possible we'll see a 1.5-2 trading day bounce, but anything to a new high now seems crazy to imagine. As I keep saying... LOOK at the monthly charts! They 'demand' we close June at least <sp'1305, otherwise the bigger bearish outlook is likely not correct.

I will short EVERY spike/bounce/hyper ramp all the way to sp'1100 this July/August. Hopefully, I can capture more downside than I did today!

Good wishes for Friday trading