Tuesday 27 March 2012

A holding-pattern day. 1440 still due

We are just circling around like a C5 Galaxy, nothing much happened today. I expect more dynamic action back upward in the latter part of Wednesday or more likely Thursday.

SP' daily

Tuesday was nothing less than minor noise. How many bears were getting overly hysterical during today's closing hour? The trend is still up!

VIX Daily

VIX did show a moderately interesting move, but whilst it remains at such a low level, its likely to see occasional moves of 10, even 20%, and such moves will not be valid as significant. Only if VIX can get over 20, can the bears start to get a little curious about things.


Holding to all original targets, Sp'1435/45 within the very near term...probably only days away. If a couple of days securely closing over 1440, then 1550 by late June/July.

More later....maybe.

US Dollar..a bullish count

Good morning. The Futures wheel is moderately green. Follow through of +0.5% or more today would be a major victory for the bulls, and seal the deal on a charge to 1435/40 by end of the week. Meanwhile, lets take a look at the US Dollar. Here is something to consider in the coming weeks and into early summer.

US Dollar - weekly, a bullish count

This is something I put together this morning. It assumes the mid-term outlook is still bullish - primarily as a result of the eventual (in my view) implosion of much of the Euro-zone members. There are of course huge issues regarding further QE, but I'll set that aside for now.

Key issues...

1. Look for a low early summer, maybe we are in a standard ABC correction from wave'1 (black number). Dollar bulls will not want to see USD below 75 under any circumstances.

2. If the Dollar does floor in early summer, we will want to see a pretty strong back upward move to break the recent high of 81.78. A move into the 82s.. and certainly 83s..would surely lead to a move to around 83/84 (the 'Benny @ Jackson Hole'/August 2010 high).

Good wishes for Tuesday trading.

Tbill yields..another problem for the bears

I've been keeping a close eye on the Bond market.

Tbill yields, monthly

Just look at the MACD (green bar histogram) indicator. We have a real chance of going positive cycle in April. That in itself does not guarantee anything, but it is arguably one bullish sign for the equity market. It could fail of course - as it did in late 2008 no less, but that is highly improbable.

So, the bears have got a real problem on almost every monthly chart out there.

A move beyond SP'1550 ?

When I consider the bond market yields, - which offer an easy 3-6 months upside, with corresponding moves in equities, it makes me wonder if sp'1550 will be the max, or if even 1600/1700 is viable this autumn?

It is a disturbing thought, but one that must be considered.

Good wishes