sp'daily3 - news to come
sp' weekly, 2yr
Summary
The bigger weekly cycle is continuing to warn of weakness - despite the last two days of gains. The underlying momentum (see MACD, blue bar histogram) cycle, is still set to go negative within the next 2 trading weeks.
With the June up trend broken, what is now vital to focus on is the secondary rising support - from the Oct'2011 sp'1074 low. That rising support is currently in the sp'1350s. So, the bulls have a huge 100pt buffer zone of comfort.
Considering the looming fiscal cliff, and GDP data for Q3 - which in my view will probably come in <0.5%, Mr Market is going to need to adjust to the downside across the next few months.
The good thing - and it is a good thing, at least there is no fear of 'ohh, what about the Bernanke, he might launch QE3'. I'm forever glad that uncertainty is now dealt with.
Looking ahead
The next few days could be mostly chop, not least since its opex. There are a few pieces of econ-data, but there is nothing too important. If the bulls get stuck below the recent high of 1470 (and QE spike high of 1474), then things could get real interesting. The last time we put in a marginally lower high was July 2011, and I think most remember where the market went from there across the next 12 trading days.
So, lets see if the bulls can make it 3 in a row tomorrow, or whether we get stuck, and start putting in a few doji-candle days.
Goodnight from London