Sp'daily4 - a doomy outlook
Summary
The daily chart across the last 15 months shows one hell of a rally, an up move of 362pts !
Lets consider the following truly disturbing thought, at the current trend, the sp' will be around sp'1800 by December 2013.
I suppose if the Fed really goes all-in, with the QE nonsense - and if the EU doesn't lose any members in 2013, then the market could indeed just keep on going. Its just a consideration, but one which arguably even the doomiest bear should keep in mind.
Targets for the bears
We are clearly in a strong up trend, but its very much looking like it could be a bearish wedge, one that should break to the downside at some point. Lets assume we do start to decline..what are the key levels...
First...sp'1400...with the recent 1397 low a very important level to take out
Second... sp'1375 - as at end Sept', the next channel/trend to take out. This sure won't be easy, and it is very possible we'll just bounce right off, and up we go into year end, and close in the 1500s.
Third...the last line for the bulls... sp'1350. Any break into the 1340s or lower, and its game on for the bears, the door would then open to the *1200/1170 level - as determined largely via the monthly index charts.
*It remains my original belief (and a hope) that the Bernanke will wait to do further QE until the main market experiences a major down cycle this Autumn.
Day of the Bernanke
Thursday could indeed be the day the Fed begin their third round of QE, which might be the start of the end game. The US Dollar monthly chart is starting to rollover, and that is arguably the scariest chart for any permabear right now. Despite the lousy economy, if the dollar falls off a cliff, that'd very likely mean equities and commodities will - regardless of any economic turmoil, soar.
Goodnight from London