sp'daily5b - best guess
sp'daily3 - fib levels
sp'weekly3 - bollinger and keltner bands
Summary
So.....the market opens higher - although for anyone watching, pre-market price action was weakening into the open. The opening gains then quickly failed, and the market broke into the 1540s again.
No doubt, a fair few bears were chasing that open lower...and got burnt, especially those running without trading stops. The latter day recovery was certainly expected, and the algo-bots (in melt mode), were given free reign during what became a very quiet afternoon session.
The bands of constraint
As ever, I think its important to note the current weekly Bollinger - and sometimes, Keltner.bands The lower weekly bol' band is now up to 1408, and that is going to keep rising in the weeks ahead - even if the indexes decline.
Quite frankly, it seems near impossible for the market to be trading anywhere under the 1450/40 zone in the current down cycle. Its possible we could break much lower levels, but only on a secondary down cycle - see May-August 2011 for a good example.
Holding to the 'best guess'.
Nothing has changed in my view, and so I'm holding to what I stated last week. Bears should be seeking a market fail/rollover in the sp'1570s...and then a swift move lower. Perhaps the 1500 level will hold on first attempt, before the FOMC give the market a wave'4 bounce higher..only to eventually hit the primary target of 1485 - the old February low.
Looking ahead
Its hard to call how the market will open tomorrow. Regardless of the open, I'd be looking to wait until I see the sp'1570s, before I start hitting buttons. Another 8-12pts on the sp'500 certainly look viable by tomorrow afternoon.
We have a very long week ahead!
Goodnight from London