Friday, 12 October 2012

Daily Index Cycle update

A real mini roller coaster of a day. The indexes opened higher on jobs data, but the gains only lasted until lunch time. The bears seized control in the afternoon and the main indexes closed broadly flat.

Yet the VIX still closed 4% lower, and is not supporting what remains a broad 4 day down cycle.






First, we have a black doom candle for the Rus'2000 (see IWM) small cap. Thats a very clear warning that the rally failed, and is suggestive of a red Friday.

The other indexes are largely the same, flat/fractional declines. Yet, those are some pretty impressive spikes on the daily candle, a good sign of weakness, and that traders were selling into strength.

A close under the 50 day MA ?

Doomer bears should be seeking a Friday close where the sp' closes under the 50 MA @ 1427. If that is the case tomorrow, I will very likely hold across the weekend, with a revised exit target of 1410/00 for Monday.

A key thing to watch tomorrow will be the VIX, bears must see a VIX in the 16s at least, preferably 17.25/50.

*the weekly index cycles ARE rolling over, so..there is some underlying pressure to the downside.

A little more later