Friday, 15 March 2013

Another day...another high

The indexes closed higher yet again, with the VIX now looking like it'll be in the 10s within the next trading day or two. Primary trend remains higher, but we're unquestionably getting over-stretched, and the market is due a multi-week down cycle of at least 5-7%.

sp'monthy3, rainbow

sp'weekly4, rainbow, - hyper bullish scenario


Sp'1563 is a level that even most deluded bullish maniacs would hardly have seen as viable, even just a few months ago.  Yet, here we are, and the primary trend remains to the upside. There is simply NO sign of a turn..or levelling phase.

The monthly chart is offering 1570/80s in the immediate term. 1600s look a little out of range, especially given the recent run up.

The 'disturbing' weekly4 chart

I will again highlight the 'hyper-bullish' chart which I am keeping in mind for the coming weeks..and months. Unless the Fed POMO program stops, I will be trading this very bullish outlook.

I am seeking the top of minor black iii, and then a multi-week down cycle - that might not complete until May. A basic fib retracement (from the November 2012 low of 1343 to 1563) offers the sp'1480/70s, and with the 1470s being the highs of the last big up cycle - Sept'2012, I am very much going to have that as my primary downside target.

I suppose 1450/25 is viable - and indeed there remains a big SPY/ES gap at the 1425 zone, but that just seems like too big of a move lower, whilst the Fed is still throwing 85bn a month at the financial markets.

Looking ahead

The market has four pieces of econ-data to digest tomorrow, but perhaps more importantly, its a quad-opex, and its a big POMO day.

Price action will likely be a bit more choppy than today, but still..the pressure should in theory be to the upside. We could very easily close the week in the 1570s.

*I will seriously consider a major index re-short towards the end of next week, but as ever, one day at a time.

Goodnight from London