sp'weekly8 - mid term bullish outlook
Summary
It was something of an interesting day, but still, many indexes declined by less than 1%..not exactly significant falls. Then there is the issue that trading volume remains very low. I would agree that volume is low most of the time anyway, but still, the point is...there isn't any panic/significant selling.
The current weekly rainbow chart is offering a second blue candle. I think bulls need sp'1695 to turn it green, whilst bears probably need 1660/55 to turn it red.
A weekly red candle in the 1650s would most certainly at least suggest an attempt on the key low of 1627. If that low is taken out, it would END the series of higher highs and higher lows...that we've seen from the Oct'2011 low of sp'1074.
Doomer bears need VIX 20s
More than anything, those seeking much lower equity levels of sp'1500/1400s within the remainder of this year, need to see a VIX that can hold the 20s for longer than a few hours. For the past 15 months, the VIX has occasionally broken into the 20s, but it has always been a brief affair.
VIX'weekly
So...regardless of how we trade tomorrow....lets see if we can get a weekly VIX close in the 20s...above the important 200 weekly MA. If we break VIX 23, then first target is the 2012 high of 27. After that, the target zone would be the 2011 spike zone of 35/45.
Looking ahead
There really isn't much tomorrow, aside from a few of Fed people whose comments might motivate the market..a little.
*the next sig' QE-pomo is not until next Tuesday.
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*I exited index shorts this morning, and frankly, am tired of meddling with the indexes. I might just leave the main market alone until after the debt ceiling is out of the way. I realise..many of you out there probably feel the same.
Bearish lights
To conclude the day, here is a little news story that won't get much attention, but is probably one of the bigger issues that most people will be whining and bitching about if it happens this winter
see BBC news - National Grid warning about lack of power
It remains lame that each year the UK - and indeed most other western nations, live increasingly on the edge of power loss. To think that with just a week or two of 'winter cold', and the UK grid will struggle to provide enough power to the general populace.
Hell, if we ever do have a winter like the 1960s (not that I was around then), then large parts of the UK will be without power for up to half of the day. I guess you could say I'm bullish batteries and blankets.
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Video update from Mr Permabull
The trendline that Oscar highlights is certainly important, but infinately more important is the actual low of sp'1627.
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Goodnight from London