sp'weekly7 - near term bearish outlook
sp'weekly'9d - H/S 'most bearish' outlook
Summary
So..today was another little victory for the bears, and the bull maniacs are no doubt even more surprised that we again closed lower.
What is becoming laughably apparent. Mr Market can not cope with the notion of QE being reduced. Despite some recent mainstream assertions that a minor taper of 15/25bn would not damage the broad multi-month equity ramp, it would seem the reality is very embarrassing for the bulls.
Most, if not all of the rally from the Oct'2011 low of sp'1074 is based on QE. Now that we're perhaps mere weeks from a small reduction, the US and World markets are increasingly unsettled - especially in the bond market.
I have no doubt the 10yr yield will be in the 3.25/40 zone within the next month or two. The only unknown is how will the equity market cope with such an increase? Right now, I'll hold to the original outlook. sp'1575/50 by mid-September, followed by a significant bounce, that may..or may not stall <1709.
Looking ahead
There is the usual weekly job claims, the house price index, and leading indicators. None of those will likely be 'major' market movers.
*there is no sig' QE-pomo until Friday.
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sp'60min'4
I will consider a (brief) long position, from sp'1635/25...or a short position from no lower than 1680/85. The latter of which no longer seems viable this week. Indeed, a few people are now suggesting that gap will not be filled for a 'very long time'.
Considering the relatively low VIX, and continuing mainstream delusion that 'everything is fine', I'm still guessing we'll see a bounce back into those 1680s. That will make for a superb downside trade to the 1575/50 zone in September.
Goodnight from London
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**Overnight video for Thursday trading..from Mr Carboni
For the macro-economists out there...
'Is the US in recession?' - Gordon T Long
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