Friday, 26 October 2012

Daily Index Cycle update

The main indexes closed slightly higher, but it remains important to note that the early morning rally entirely failed to hold, with the market even going briefly negative. Despite the closing hour mini-rally, the daily near term trend remains downward.

IWM, daily




I suppose some bears can feel a little disappointed with the closing levels. After the early morning rally failed, and with the market red, the door was open to breaking much lower...but no. The bears did not have the energy to break lower today. Perhaps tomorrow.

The underlying daily MACD (blue bar histogram) cycles are very low, and there is now the persistent threat of a major jump to the upside on any 'excuse'. At the moment, considering the VIX is still not even 20, I'm not too concerned though.

Transports remains trading in its own little world. I'd certainly like to see it close the month <5000, to maintain a generally bearish trend on the monthly charts.

I remain short, seeking an exit on a major down day, preferably somewhere around sp'1375, with VIX 20/21. With the weekly charts suggesting a target of 1325/00 as viable within the next week or so, I am reasonably confident of an exciting end to October.

A little more later.