sp'weekly
sp'weekly2, rainbow
sp'weekly5, fib retracements to the Oct'2011 low
Summary
So, a third day higher...as I was seeking. Yes, we closed a little high for my liking, but I'm not going to get too obsessive about a few tenths of a percent above my RS target zone of sp'1573.
The obvious question remains, is the current market still possibly building a larger H/S formation ?
sp'daily5a - H/S formation
The break/snap levels are very clear. Bulls need >1597, whilst the bears need to take out 1536. From a trading perspective, its simple, and for those using tight trading stops*, risk can be made very limited.
*although today's mini flash crash of sp'15pts in barely a minute, was again a reminder of the fragility of the current market. A lot of traders were stopped out, only to see prices higher than their exit a mere minute or two later.
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For the moment, baring a daily close in the 1580s, I'm holding to the above scenario in the days ahead.
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**Bonus chart...
Copper, monthly2, downside Fib levels
For those who are especially bearish out there, take a few minutes to stare at the above chart. Its arguably hugely important. A break below the key $3 level opens a swift move down to the low $2s, where there is support around 2.15/2.00. If Copper breaks, I'd have to expect the precious metals will follow in a secondary..and much deeper collapse wave - one that very few are considering.
Looking ahead
Wednesday we have a few things for the market to cope with. First, there is Durable Goods Orders @ 8.30am, and then there is the EIA oil report @ 10.30am. It will be interesting to see if we have any further signs of econ-weakness out there.
Market is still expecting GDP Q1 of 3.1%, which I find unfathomable, but then, maybe there are some reasons I am not taking into consideration. I am still looking for a negative number, but then..I'm an econ-permabear.
So, lets see if the bears can break under the lower (hourly chart) channel - which by the Wednesday close will be <1570. That's not asking much, barely -0.5% on the indexes, with VIX in the 14s.
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*I will likely hold heavy short into Friday afternoon. Best bear scenario right now are the sp'1540s late Friday with VIX back in the high teens.
Goodnight from London