Monthly Index Cycles - flipping bullish

Once again, we have a very sick and twisted market, from the Monday opening morning decline of dow -239...to the Friday close of dow +187, which is a huge 550pt swing.

On any basis, a dire end to the week for the bears..and the bulls can now start to dream of sp'1500/1600 by the year end - if they get a big enough QE3 fix within the next 7 weeks.


sp, monthly, rainbow (Elder impulse)

*ignore the projection on the chart. Right now..the trend is back to UP.
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Summary

The monthly cycle...is now outright bullish. The July trading month still has two days left, but baring a significant turn around (with declines) by the Tuesday close, we will close July..bullish.

Yes, not all the indexes are as bullish as this. The Rus'2000, Transports, NYSE Composite, and the Nasdaq Composite are now back to neutral. Yet, the bullish SP'500 and Dow'30 are hugely important, and they are currently warning of a major trend change to the upside.

Right now..that's all that needs to be said.

Goodnight from London

Closing Brief

For bears..a truly dire end to the week, and an outright horrific letdown after what was a superb opening Monday morning. For the bulls, they can revel in the fact that the central bankers can happy-talk the market to new index highs.

*the monthly cycles have now flipped to outright bullish for the SP'500 and Dow'30. There are still two trading days left of the month, but..its looking like we'll close outright bullish.

Only the Rus'2000 small cap and the Transports are still suggestive of mid-term weakness.

As things are, the entire bearish outlook will need to be thrown out next Tuesday.
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The closing hourly index charts...


IWM

Dow

SP

Summary

Very little needs to be added. We all know how sick and stupid this is..yet we ARE closing with the weekly cycles at what are now borderline outright bullish.

If we're still at these levels by the Tuesday close..then its all over for the bears, and all those touting sp'1500/1600 by year end..can start to smile.

3pm update - a lousy end to the week

Whilst the sporting (and financial re-hypothecated) capital of the world is preparing to begin the opening ceremony - for which it can't actually afford without more deficit spending, we still have one more hour left of this trading week.

We will doubtless close at a level which is borderline breaking the weekly cycles - since the April rollover.

*As we've seen in the past hour..a lot of big money bear short-stops have already bailed out.


sp'60min

sp'weekly

Summary

Monday morning...seems like so very long ago.
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A little more after the close.

2pm update - there go all the 1380/85 stops

With the algo-bots managing to push the market just over 1380/81...a truck load of bear short-stops just get triggered, causing a reverse-cascade up. Its turning into something of a horror story to end the week.


sp'60min

sp'daily5

Summary

Its starting to get to bear apocolypse levels now. Way worse than even the deluded bull maniacs could have hoped for. Dow, Sp' new cycle highs. All thats missing is a new cycle low on the VIX, and index highs on the Transports and Rus'2000.

If we are around these levels by next Tuesday, the broader bearish case is...out. With the action as it is, it seems highly unlikely we'll get any kind of reversal until after the next FOMC.

If Bernanke wants sp'1500 pre-election...all he has to do is s small QE3 next Wednesday.

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A lot of trading accounts are going up in flames today....

1pm update - dow 13000...just great.

Whilst the Sp' is holding still under the 1380 high..the dow is now well above. The consolation is that Rus'2000 and Transports are still well below their 1380 equivalent highs.

VIX is trying to floor, but..nothing definitive yet.


dow'60min

iwm'60min

vix'60min

Summary

Nothing much to add..other than...Gold/Silver are two weak signs for those inflationists/QE3 believers out there.


GLD, daily

More later

12pm update - it burns..burns burns

Well, it probably can't at least 'feel' any worse than now. So..err..those bears who are holding it together right now, should be okay once we do level out..whenever that might be!


sp'60min

sp'daily5

Summary

Rough end to the week, feels like we're right back to late April...again.

I think this sums up everything...

11am update - when will it stop?

We're now just 8pts away from breaking the recent 1380 high. It won't take much to kick it over that. Just another baseless rumour/lie from the EU..and the bulls can take back the weekly and monthly cycles..and then we'll all be set for sp'1500.

Great huh? On days like today, I really wish I wasn't part of this.


sp'60min

sp' monthly

You can already see the underlying cycle on the monthly is now almost starting to flip positive, and we're very close to breaking what was a pretty weak downtrend since the April rollover.



Summary

No sign of any turn..or levelling out. If the algo-bots want to melt this nonsense to new highs..then they have it relatively easy now.

A lousy end to the week..and a stark contrast to how we opened Monday.

10am update - Friday meltup..on more lies

Another Friday of nonsense, we're now just 10pts away from breaking the recent high..and its all starting to fall to pieces for the overall bear case.

With just 2 more trading days left of July, a monthly close of sp'1360/80..would be dreadful for the bigger picture bearish outlook.

*consumer sentiment: 72.3 vs 72 expected.   Clearly, everything is great for the American consumer.


sp'60min

IWM'60min

*again, putting a black candle..warning of trouble for at least 'some' of the morning ahead.


Summary

I'm not expecting anything good for the bears today. I suppose a close under 1360 is possible, but..there just doesn't seem any momentum at all for the bears now.

We just earlier had a Reuters report about Merkal/Hollande will do 'all they can to save the Euro'. sigh.
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Pre-Market Brief

Good morning. Futures are up..again. Sp is set to open +5pts to around 1367 or so. Once again the bears are starting the day...somewhat badly.

If Mr Market decides the econ-data is 'good' - even if the actual data is pretty lousy, then a breach of 1380 is a real possibility.

Q2 GDP 1.5%... vs 2.0% Q1

This is NOT good for those looking for QE3 either next week, or Sept'13th.

Look for market to sell off later.


sp'60min

sp,daily5

Summary

I'm still short from1340, and this is starting to get really annoying.

With the FOMC next week, I have the fear that next Mon/Tue will be moderately higher. Even another 1% higher across 3 days gets us at the borderline of another new high for what many called the 'big wave 2'.

So...how we close today will be important. Right now, a close under 1350..is a distant dream.

Bears can't sustain a close over sp'1380

With today's index ramp - based on more utter nonsense 'central banker chatter', the bears are understandably a little rattled. Yet, we've not broken the previous 1380 high.

What is critical both tomorrow and early next week, are no daily closes over sp'1380. It is a little disturbing to realise we are again a mere 4% from the April peak.


sp' weekly, 2yr

Summary

Monday's morning gap lower of dow -239pts (with VIX +26%) now feels like a distant memory. These sort of crazy gaps higher on shear crazy 'excuses' are clearly going to happen again and again in the months and indeed years ahead. Even now though, after so many such 'stupid' days, its still pretty surprising and disturbing to see it happen.

Can we at least close Friday lower? Clearly the smaller cycles would allow for some kind of fall tomorrow, but today's move higher was pretty strong. I'd be more inclined to guess that Friday will close flat.

Lets see if the US Q2 GDP and consumer sentiment data can at least produce a flat index close, or preferably a weekly close a touch under sp'1350.

Goodnight from an overly warm London

Daily Index Cycle update

With the ECBs' Draghi's comments of 'I'll do anything to save the EU', the indexes gapped strongly up, but they really didn't do anything other than the initial gap. No one - not even the most deluded bull lunatic, who is touting new highs can suggest that today was anything other than an opening gap up based purely on 'mere talk' from a central banker.


Dow, daily

Sp, daily5

Transports

Summary

Certainly, we saw some large bullish candles on the daily cycle, although there were a few signs of weakness - see the Transports.

One real concern is that we now have an up tick on the MACD (blue bar histogram) cycle on ALL indexes. So, its possible we could tick up for a few days, put in a fourth lower MACD tower..before a collapse wave. Of course, price itself could trade sideways, whilst the MACD resets to a brief positive cycle.

Clearly, for those bears who were shorting from the 1350 to 1330 level in the past few days, today's close of 1360s is painful.

Lets see how the market reacts to the big Q2 GDP data (and consumer sentiment) tomorrow morning.

A little more later.