sp'weekly3 - Keltner
sp'weekly2, rainbow
Summary
Just a few short notes on two of the weekly charts that I like to regularly highlight..
First, Keltner. If there is going to be a down cycle in the coming weeks, first target will be NO lower than the lower band, which is currently @ sp'1439 and rising. By mid April, this will be around 1470/75.
Second, my somewhat infamous 'rainbow' chart. Lower bollinger on here is still all the way down at 1359, but that is going to battle higher..and will be around 1425 by late April.
No hope of sub sp'1400s
The bears can NOT expect this market to be trading under sp'1400 any time soon. Its just so very unlikely..arguably near impossible. The weekly charts are all generally saying the same thing, by late April/May, the bears will be lucky to see the 1470s....perhaps the 1430/25 zone.
It really depends on how long it takes to churn out a top. If you look at the previous 3 cycle tops on the rainbow chart, we generally put in 3-6 candles before putting in a consistent close under the weekly 10MA.
My best guess from all this...we do cycle lower across April/May (not least if Q1 earnings suck), but..probably only to the sp'1470s - which interestingly, was the old resistance high from Sept'2012.
Looking ahead
Thursday will likely be more busy than today. We have some key econ-data, in particular the GDP and Chicago PMI data. If those are somewhat lousy, it'll give the market another excuse to sell off early.
The Cypriot banks open Thursday, and Mr Market is going to be keeping a close eye on any civil disturbances. I'm guessing the populace (or should that be ignorant Sheep?), will line up very politely though.
Finally, it should be recognised that Thursday is not only the end of a short week, but end of the month..and quarter. The late afternoon will probably be somewhat unstable, yet we have a large 4-5bn POMO to placate the HFT algo-bots.
That's all for today.
Goodnight from London