Wednesday, 3 July 2013

Low sp'1500s still viable

The mid-term weekly 'bearish' outlook/count is still holding together. The critical line remains the 10MA @ sp'1628, and we've repeatedly come very close to breaking it. Yet these borderline situations are typically the case in market land. Where we close the week will be pivotal.

sp'weekly7 - near term bearish count


So...we still have a blue candle on the weekly 'rainbow' chart, (we need 1605/1595 to get back to red), and the bearish case is still on.

Primary downside target remains the lower weekly bollinger, currently @ 1506, but that will rise to around 1512/16 next week, and the 1530s by mid July.

As has been the case since the 1687 high of May'22, 'the faster we fall, the lower we can go'.

Right now, it looks like the 1530s will be hit, but no lower.

WTIC Oil breaks the big $100 level

As I type (10.30pm EST), WTIC has now hit the $102s, and could easily be a few dollars higher in the morning.

WTIC, monthly 20yr historic

WTIC, monthly'2, rainbow

The Egyptian situation is a major one, and if the Suez canal is closed (or merely at threat of closing) - if only for a few days, we'll probably be looking at WTIC $110/120s. That will most certainly upset the equity markets, and we'd be unquestionably trading back under sp'1600.

From a simple price perspective, the first 'easy' target is the monthly upper bollinger of $106. A daily close >110, and then we could be looking at a couple of $10+ daily gains. I'm certainly not expecting the $147 all time high to be hit any time soon, but the daily, weekly, and monthly trends are ALL trending higher.

Higher Oil prices for the US..and other western economies, that will help the 'summer of recovery, ver'5.0', yes?

Looking ahead

Wednesday has three pieces of econ-data, ADP jobs, EIA oil report, and ISM non-manu (10am).

*there is a very significant QE of around $5bn to prop' up the market tomorrow, and bears are going to be under severe pressure until the early close of 1pm.

Things will become a lot clearer by the Friday close. At that time, we'll either be breaking well into the 1630s, or closing <1600. I'm guessing it will be the latter, and I remain on the short side.

Goodnight from London

intra-day video from Mr Permabull, 'Carboni

I certainly agree with him on Gold and bonds. Yet, higher bond yields will be a downward pressure on the market, at least until the market 'gets used to it'.