Thursday 16 August 2012

Closing Brief

Significant gains for the broader market, which was certainly helped by all those who had short-stops at the 1410/12 zone getting booted.

No sign of a turn..the melt...continues.

IWM, 60min




What needs to be said? Market melt continues. I guess you could we're still in a giant narrowing wedge - although thats not the case for all indexes (Trans, R2K for instance).

A lousy day for those bears not already stopped out. As noted a few weeks ago, the serious money bears will have got kicked around 1380 though.

The primary monthly cycle is UP UP UP.

3pm update - 5pts from the April peak

We're now less than 0.4% from the April peak of sp'1422. Its pretty incredible to be back at these levels since the spring rollover where we fell all the way down to sp'1266.

Lets be honest, very few of the chart community (myself included) were calling for anything over 1375, and whats even more impressive is how the market has managed to melt upward - even though the consensus is arguably now 'no QE before the election'.




Other indexes like the tranny and Rus'2000 are still way behind the sp'500. More on that issue though later.

More after the close.

2pm update - melting...I'm melting...up

Slow motion, near zero volume, bear short-stops triggered, and now so close to the April peak of sp'1422.

Both the weekly and monthly cycles suggest 1422 will be hit..and we'll have a good chance at 1450/60 by mid September. Maybe its time for Draghi to make some more comments and alude to an LTRO'3 ? Thats gotta be good for another 5%.



The underlying issue is can this market hold together during the tricky Sept/Oct' period.

The remaining doomers keep mentioning the German court ruling on the ESM (due Sept'12) but hey, they could further delay that ruling indefinately if they really wanted to.

Is it the weekend yet?

1pm update - bears throwing in the towel

I can imagine many will be throwing the proverbial towel today. After all, a 9 day top...and now we're confidently trading over 1410, with the next obvious target of 1422.

So, the strength seen in the tranny and the Rus'2000 yesterday was indeed a warning.




I suppose it could be said the VIX is still higher than it was when the main market was lower, but at these levels, the VIX is almost entirely unreliable.

It would appear we'll at least test the 1422 peak in the coming days.

No volume.....melt up.

How about another 5-10 months of this crap?  Great thought huh ?

12pm update - breakout

The bulls finally breakout above the recent highs of 1410.



Very little to add, other than the obvious next target is the April peak of sp'1422.

Clearly, a fair few will be getting stopped out right now, and hence the somewhat rapid jump higher.

Time for lunch

11am update - bulls trying to breakout

Whilst volume remains near zero - except for FB, where the rats are continuing to jump, the bulls are trying to break out of the 9 day range.




VIX is appearing weak again...bear flag?

A fair few will have stops 1410/12, so..we could see a mini cascade up in the next hour.

Time to 'average down' on the FB, surely, right ?

10am update - morning chop

Well, here we go again...another near zero-volume day.

As stated many times, bears need a close in the sp'1380s to get 'something' started.


FB, daily


Nine days of..effectively nothing.

Entertainment can still be found if you check FB. Near term market target remains $15, with fair value @ $4.

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open around 1407


sp, weekly

Primary trend remains UP, no sign of a turn yet - although the daily is certainly appearing maxed out.


Another flat day ahead? It does seems very likely, there doesn't seem to be any mood change today compared to the previous 8 days.

Is it the weekend yet?

Bears have an awful lot to do

To close another trading day where the volume was again 35% or so lower than normal (whatever normal is these days), lets reflect on what remains a new bullish up trend.

SP, monthly, rainbow


The task for the bears right now is really mountainous.

First, bears need a monthly closing under the 10MA of 1344. Does anyone really think we're going to be able to close August under the key 1350 level ? Sure, its only 3.5% lower from current levels, but the current trading atmosphere is that of a graveyard.

There seems nothing that is going to knock this market below 1350 before the labour day holiday of Monday Sept'3rd. So, at the current rate, we'll close August, and put in another green candle on the Elder Impulse 'rainbow' style charts. That has to be a VERY serious concern for any bear out there.

Here is a really scary thought... how about we slow melt up to 1550/1600 by January 2013? 

Personally, I am kinda desperate to see an August close under sp'1350, but it just does not look very likely right now. The daily charts on the big sp'500 and dow'30 indexes are suggestive of a top, but what matters is how we close the month of August, not the day to day action.

Goodnight from London

Daily Index Cycle update

A largely flat day for the equity market, but there were certainly some differences between some of the indexes/sectors.

IWM, daily

Dow, daily

Sp, daily5

NYSE, daily



A quiet day indeed for the headline indexes (SP/Dow). However, both the Rus'2000 (see IWM chart), and the Transports closed with somewhat significant gains. The Transports put in what was a pretty clear breakout, and is potentially warning of a new up cycle, that might be seen in other indexes sometime in the next few days.

The broad formation on the Sp' Dow, and NYSE Comp' remains that of a very tight 8 day top.

It really won't take much to snap the main indexes lower, probably to the low sp'1350s. Yet, it presently seems almost impossible to get a dow 50pt decline to hold for more than 30 minutes.

All those calling for sp'1200, 1100..or even 1000 by year end, it sure is not looking promising right now.

A little more later, to close the day.