sp'weekly7
sp'daily6 - bands
sp'daily4b - fib/key levels
Summary
With the market rallying, the second red candle on the weekly 'rainbow' charts has now flipped to blue. This should concern the bears, and frankly, I will be VERY concerned if we close the week at..or above current levels.
Bears seeking further downside should look for the current weekly candle to flip back to red, and for that, the market will need to be in the 1640s.
As things are, I think even if the market opens in the low 1660s tomorrow morning, there is no reason why things won't sell back lower into the Friday close.
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Re: chart daily'6. The 'worse case' for those bears considering a re-short, is probably the sp'1680/85 gap zone. The problem with that though, any weekly close in the 1680s, will threaten/overturn the bigger mid-term bearish outlook.
The 2011 analogy..where are we?
I have been inspired to dig up an old historic chart, after seeing a posting by 'TraderMoe' He (or she) has a different take on things than me, but still...worth checking out.
April-Oct'2011, daily
As ever.. ALL cycles are unique. Nothing ever repeats exactly, but the style of a down..or up wave, will often repeat in the same manner.
If the market can get stuck in the coming day or two..and then proceed to hit the lower weekly bollinger (the target I been droning on about for some weeks) - currently sp'1579...then the analogy is arguably still viable. Similarly, ANY daily close >1709..and it has to get dropped.
Looking ahead
There is a very wide array of econ data for Thursday....
ADP jobs, weekly jobs
ISM non-manu, factory orders
Productivity/costs
EIA Oil, and Nat' Gas reports
That should give the market plenty of excuses for some dynamic price action in the morning session.
*there is sig' QE-pomo of $3bn, bears...beware!
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I also noticed an interesting outlook by Knight on slopeofhope . Knight is seeking 1670 - where the weekly 10MA is..then a big drop..before a hit of the 200 day MA..within the next 2-3 weeks. Certainly, that is effectively the same as what I've been talking about.
The patient bear
So, having bailed last Friday, I remain waiting to re-short this nasty market. I will be looking to pick up a new VIX call block, and will look to hold at least until late Friday.
There remain a great many issues that should kick the VIX into the 20s this month, whether its the German elections, US debt ceiling talk, the FOMC, or the looming US attack on Syria. I find it next to impossible to believe the market is going to ramp to new index highs.
As ever, despite my own permabearish thoughts, form your own conclusions ;)
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Video update from Walker
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Goodnight from London