IWM, monthly
Trans, monthly2, rainbow
Summary
Well, despite being a self-defined 'Permabear', it has to be said...seeing the Rus'2000 break to historic highs, and the Transports breaking into the important 5400s..this was an extremely bullish start to a new year.
It could all be a brief fake-out of course, but hey, that's mere 'doomer talk', and we have to deal with the facts.
The charts are clear...
The transports has broken a year long tight trading range..and the break is to the upside.
The Rus'2000 small cap is now in new trading territory...that's unquestionably super bullish.
In terms of the sp'500....
A move to sp'1510/20 seems very viable, based on a simple tag of the upper channel/band. That is a mere 3-4% away, so its easily within range by late Jan/early February. In any future multi-month downside cycle, the low sp'1200s remains the general target zone.
2013 begins with a hyper-ramp.
We have a very long year ahead of us, I'm sure we'll see many more hyper-ramp days like today...and no doubt...many similar sized ones to the downside.
There is plenty of econ-data this Thursday and Friday - including the big monthly jobs data. So, as the market begins to move past the fiscal cliff deal, it'll have to once again consider whether its priced correctly to reflect the upcoming Q4 earnings reports.
I think we'll see some very weak earnings from some of the bigger industrials (such as DD, GE), but as is often the case, the Market may simply dismiss such reports..and keep on going higher.
*I remain on the sidelines, and currently have no intention of re-shorting until next Tue/Wednesday, and that's at the earliest. If we break sp>1474, then the remaining bearish outlooks on the monthly charts will have to get thrown out.
Goodnight from London