The bears should be seeking to at least close the market under the sp'1700 level this Friday. If that is achieved, it will start to confirm that sp'1709 was indeed a mid-term cycle peak. Target downside is 1600/1550 into September, with VIX 'briefly' in the low 20s.
sp'weekly7 - mid term bearish outlook
So, despite the index gains, we still have a blue candle on the weekly 'rainbow' (Elder Impulse) chart, and so long as the market closes the week <sp'1700, we'll keep that initial sign of a market turn.
Considering the 149pt ramp from 1560, I do indeed think the top is in, and that now its just a case of when we start seeing a few bigger daily declines.
There is no major econ-data tomorrow.
*There is ZERO QE-pomo tomorrow, and interestingly (and I do think its rather important), there is no sig' QE until next Thursday.
From a QE perspective, the bears now have a 4 day window to knock the indexes lower. Next Thurs/Friday both have sig' QEs, so I'd have to assume next week ends on a slightly upward note.
Best bear case in the next few days is the 1660/50 zone- where the 50 day MA is lurking. That won't be easy though.
A H/S scenario to keep in mind, not least if we do break lower tomorrow/early next week, but get stuck around 1675.
It would sync up well with no QE until Thursday, with moderate upside - back to 1695/1700, before a post-opex move down to the 1650/40s.
One final chart on fib levels, where both the mid 1670s...and the low 1650s (where the 50 day is lurking) are both kinda good targets for the next week or two.
Goodnight from London