Friday 21 September 2012

Closing Brief

A touch of weakness in the closing hour, but it remains all noise, and the broader trends remain up. The daily charts remain highly suggestive of a bull flag, with a target probably in the 1490/1500 level within a week or so.




The tranny continues to collapse, the consistancy in the cycles is VERY interesting. Not that it matters for the bigger indexes, everything remains outright bullish.

I'm tired of it all though...

Have a good weekend

3pm update - a witchy closing hour

The closing hour of quadruple witching option expiration. Whilst the transports is continuing to collapse, the main market is still holding up very well.


transports, monthly


Another tiresome week for the bears. I suppose it could be said at least we have not soared 'to da moon', but still, everything - besides the tranny, is outright bullish.

If I sound despondent, its because I am. Why aren't ALL the bears shorting the transports. Clearly that's the only index that now seems 'allowed' to reflect reality.

With the transports breaking multi-month lows, to think that we have the VIX -2% in the 13s.  sigh.

A little more after the close.

12pm update - sleepy Friday

All things considered, its a quiet end to the week. Margnal gains for the main indexes...yet once again, the transports is lower.




There is certainly nothing for the bears to get excited about. Quite the contrary in fact, just where is the downside momentum expected to come from? Right now, there just isn't anything, other than slow motion low volume melt upward.

It sure won't take much -a few comments from Draghi/Spanish bailout news, to kick this market >1474, next week.

Time for lunch, back at 3pm.

10am update - another higher high?

Good morning. It looks like yesterday was yet another cycle low, at least for a few days. Baring a major reversal, with a red close, we're set to break >1474, and have a chance at the big 1500 next week.

For the bears, this is again sickening, but to be expected.

*one amusing thing I've noted, I've seen many analysts tout 'bold predictions of sp'1600 by 2014/15. the current rate of trend, we'll be sp'1800 by end 2013. With the Bernanke and Draghi out there, how come the bulls seem to be ignoring the rate of trend?





Its quadruple witching opex, and we have a rebalancing of the sp'500 today. I honestly don't quite understand why there is so much doomer chat out there about these two aspects.

The chances of a reversal to the downside seem small. Considering the recent few days, and the style of recovery yesterday morning, looks like we're headed up to new highs.

The one solice for the bears, the VIX daily cycle is a touch higher, despite the index gains, but that matters nothing if we start breaking new highs next week.
back at 12pm

Transports smashed lower

Another bad day for the transportation index, losing a pretty severe 2.7%, and closing below the big 5000 level



sp'monthly, rainbow


With today's strong decline, the transports is again sporting a red candle on the monthly rainbow (elder impulse) style chart. If we can close the month at this level, it would be the most significant bearish signal we've had in the market since May 2011. Yet we still have six trading days left of the month, and a lot can happen between now and then.

There is unquestionably a number of underlying problems in the global economy rearing up again. Last weeks QE3 launch certainly helps to dispel some of the fear in market-land, but QE3 sure ain't going to solve the structural problems out there.

I certainly can't fathom where the market is going this Autumn, but...if September does close with a few red flags - such as trans <5000, and Oil <90, then the bears have a chance to break back under 1400, and challenge the rising 2009/12 trend (sp'1300, as at Oct'1st)

*I remain short, and with the dow/sp' utterly failing to match the transports action, I am not pleased at all. Friday is quadruple witching, and I'm just not expecting anything much for the bears tomorrow.

I guess there is always next week....sigh.

Goodnight from London

Daily Index Cycle update

The main indexes showed very marginal declines, but it was the transports where we saw what were arguably pretty devastating declines. Were the dow down 2.7%, that would be an equivalent loss of around 375pts !

NYSE Comp, daily




Lets start where the action was..the tranny. Today was the biggest fall for the tranny in over 3 months. This sort of decline is not to be taken lightly, and yet the dow/sp, seemed completely content to ignore it.

I'm really not sure what to make of this extreme disparity between the 'old leader' and the main indexes. Which is wrong here? Is the tranny just over-reacting to a few earnings concerns, or are the bigger indexes just lagging a lala land of delusion?

The master index (NYSE comp) slipped a little lower, but like other indexes closed well off the morning lows. The underlying MACD (blue bar histogram) cycle certainly continues to tick lower, and is suggestive of upside momentum weakening, yet we just aren't seeing any decisive significant daily declines.

So far - aside from the transports, the main indexes are largely trading sideways -in what could just as easily be yet another bull flag, which would point to the sp'1490/1500 level by early October.

A little more later