Tuesday, 25 June 2013

Primary target is currently sp'1495

Another lousy day for the bulls, and with the break of the up channel last week, the bears remain firmly in control. A near term equity bounce seems very viable, but the trend is broadly on the downside. Primary target remains the lower weekly bollinger, currently @ sp'1495, but rising.

sp'weekly7 - near term count'1

US 10 yr, yield, monthly'2


Well, another victory for the bears, and the weekly'7 count/outlook remains on schedule. Based on a number of the recent multi-week down cycles, the obvious target (in my view) remains the lower weekly bollinger, which is currently sp'1495 - but which is rising each week.

By next week, the weekly bol' will be around 1505/10, which is interestingly where the 200 day MA is also lurking.

10 year yields above 3%, by early next week?

I have added a very simple 10yr Tbond yield chart. Many out there recognise the importance of the 2.75 level. If that is broken at ANY time, then we could spike >3%, perhaps 3.20/40s. That would easily be enough to whack this market down to sp'1500.

Best guess....sp'60min'3

I have to think we're due some kind of continued bounce, and that today's upside action was perhaps the first 30/50%. It will be difficult to clear sp'1600 again, but if the market does, then 1615/25 would be the target re-short zone.

Looking ahead

There is a VERY large array of econ-data tomorrow morning. If some of it comes in 'reasonable' the market will likely use it as an excuse to ramp into the 1590s..possibly even higher. Perhaps most important, we have durable goods orders (8.30am), and consumer confidence (10am).

*there is no significant QE tomorrow. Next major POMO is Wed' and Thursday.

**Bonus chart...

Copper, monthly'2, with fibs

Even though we closed in the 3s, the earlier break to 2.99 was very important. The door is now open to the low 2s, That is viable within a few weeks, although it could take a few months. Regardless, it is a very bearish chart, and bodes badly for Gold/Silver, and the entire mining sector.

I'm on the sidelines overnight, and am merely seeking an equity bounce, and will look to short this market down to sp'1550/30, but possibly as low as 1510/00 by early next week.

What is clear, if we hit the lower weekly bollinger, I'm going all out long. So much for the 'permabear' eh?

Goodnight from London