sp'monthly3, rainbow
sp'daily4 - original bearish outlook
VIX, weekly, 6yr, rainbow
Summary
Tomorrow is the end of what has been a pretty busy week, and also the end of the trading month.
The daily'4 chart - remains on track, and effectively, my outlook is that we are in back test mode - against the (now broken) Oct'2011 rising support. If I'm right, we shouldn't be putting in any daily closes >1430, and in fact, we should see a pretty strong reversal within the next day or two.
VIX - tight...and ready to explode.
Here is a new chart, rainbow VIX, spanning the past six years. The point I'd like to highlight is the super tight bollinger trading bands. We've not seen bands this tight since spring 2007. Usually - as is widely recognised, when the bands get tight, eventually there is a snap move.
With the VIX in the lowly 15s, I can only imagine that any 'snap'..will be to the upside. The only issue is 'when'.
Monthly closings
One particular aspect that I will be focusing on tomorrow is how the monthly charts will be closing, not least my infamous 'rainbow' (Elder Impulse) charts.
As things stand, despite yet another higher close, the Sp' monthly is still sporting a blue candle. Now, it was red earlier this month - when we were in the mid 1300s, but a blue candle is still an important provisional warning of trouble.
At the very least tomorrow, I will want to see the indexes close flat, or preferably, at least a little lower. A close <sp'1400 would be an absolutely superb way to end the month. I can't wait to find out!
Goodnight from London