sp'monthly2 - Keltner
Summary
So, we're now a mere 2pts shy of the mid-Sept' QE highs. It seems a given that we'll break 1474 tomorrow..along with Dow'13600, and the Nasdaq similarly following. As the Keltner chart displays, a very natural target for February would be around sp'1510/20.
The fact the Trans/R2K are already well above the Sept' highs should be considered a huge warning of further upside into the spring.
USD - gets the smack down
One issue I did not highlight during today was the dollar, which really suffered, as the Euro soared. Today's move is the biggest closing decline since early August.
From what I gather, it seems Mr Draghi was trying to convince everyone that the EU will be back on the 'road to growth' sooner than most were forecasting. Clearly, we should all have 100% confidence in such econ-predictions from the ECB. Their track record is one of accuracy, right?
USD, daily
USD, monthly2, rainbow
We now have two red candles on the monthly rainbow chart, and its looking very bad for the equity bears. If the dollar breaks <79 in the next few days, then everything will be pressured higher, especially the metals and Oil.
Volatility update
The VIX closed the day -2.3%, and now rest @ 13.49.
VIX, weekly, 2yr
The weekly trend indicators are naturally still all negative, and even if the VIX trades flat, its going to take some weeks to see everything level out, and offer the next opportunity to move higher. Even a brief spike higher to 16/18 - where there is a giant gap, would make little difference to the underlying momentum.
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As for tomorrow, considering 'everything' - not least the weak dollar, sp'1474 looks set to be broken above, and there really is nothing but empty air until sp'1510/20. I can only imagine the glee and level of hyper stock-pumping the clown network cheerleaders will be doing across the next few weeks.
For those still seeking a retracement...
sp'60min'4
Sp'1445/40 looks a long way down right now, but more so, because of the underlying lack of 'scary news' to kick this market back lower.
When you consider the price action in the above hourly chart, its utterly depressing how it can takes weeks to drop a few percent..but mere seconds for an opening gap of 2% higher to claw it all back.
Goodnight.. from a fairly disillusioned London