sp'weekly4 - hyper-bullish outlook
sp'weekly8 - near term view
Summary
Without question, another fiercely nasty day for the bears.
Yet, even yours truly noticed that from a purely technical/chart perspective, today looked a lousy set up for the bears. All of the smaller cycles appeared floored on their respective MACD cycles, and I sure wasn't going to get involved on a 'fed day'.
The daily index closes were extremely bullish, and with the weekly charts offering massive potential for another few weeks at least, the sp'1750/75 zone looks an easy target for October.
The only issue now, is whether the market gets upset by anything in Oct/November...or just keeps on battling higher all the way into spring 2014.
By that time, the sp' would surely be in the 2000s. An incredibly disturbing thought, but it is something I've been keeping in mind for many months.
A wildly bullish scenario
The following outlook is about as crazy as anyone could come up with, not least a self-titled permabear
sp'monthly6e
Broadly, this would call for 'general' gains into next spring, before a 20% pull back - analogous to that seen in 2011. There would then be a final wave from late 2014 into 2015...perhaps into spring 2016, where the main indexes would rally at least 50%..perhaps even double up in an insane blow off top.
The USD - breaking (badly) down
With QE continuing in full, the USD was smacked over 1% lower today, and today's fall makes for a decisive break on the monthly charts. It will only need a little further weakness across tomorrow/Friday to break the big 80 threshold..and that will really start to get some concerned.
USD, monthly, 15yr
Even if the USD can rebound across the rest of the month, that is a pretty significant break of trend/channel, and bodes badly for the rest of 2013. Of course, a lower USD will help kick equities and most other dollar denominated assets to the upside.
Looking ahead
There is an array of econ-data tomorrow, inc. Jobless claims, phil fed survey, and leading indicators. Market should be able to cope, even if some of those come in a touch disappointing.
There is sig' QE-pomo of around $3bn.
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*I remain on the sidelines, having avoided today's carnage, and will not be shorting the indexes for some weeks, if not months to come. Indeed, I will be looking for something to go long, perhaps a sector ETF, or even Oil.
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Goodnight from London