Whilst the equity market chops around in the sp'1760/50s, the bigger question is how much higher can the market climb by year end? Certainly, the low/mid 1800s look likely, but the weekly charts will be pretty over-stretched by early December. Some significant year end profit taking seems likely.
sp'weekly8 -mid term bullish outlook
Dow, monthly'2, rainbow
Unquestionably, the primary trend remains to the upside. The Dow monthly chart is pretty clear. Baring a break <15k, the trend is strongly bullish.
We have the fifth green candle on the weekly 'rainbow' chart, and there is simply nothing bearish right now. Indeed, first support is around the 10MA of 1716..but that is rising pretty strongly, and will be 1750 by end Nov.
Upper bol' on the weekly cycle is offering 1776 in the immediate term. However you want to count this nonsense, we sure aren't trending down. I have to say, I'm utterly bemused how anyone could dare call a top right now, not least with the weekly charts still outright bullish.
Maybe if we get 2 or 3 blue candles by early December, then we can see a little down wave, but even then...post Christmas..we'll more than likely surge higher - just like this past January.
I'm holding to the original outlook I posted some months ago...I'm seeking a yearly close..somewhere in the sp'1850/1950 zone.
Certainly, it will be damn difficult to close in the 1900s, not least since there will be a massive likelihood for year end profit taking. Yet...QE continues at $85bn a month, and the market remains powerfully strong.
There is simply nowhere else for the 1trn of 'new money' to go. Never mind the capital inflows from the EU/Asia. The US capital markets are like a giant vacuum, and US equities look to be strong into spring 2014..before some degree of intermediate multi-month correction.
There really isn't much of anything tomorrow, aside from the usual QE nonsense.
*there is heavy QE-pomo this Wednesday...bears...beware!
A somewhat tiresome Tuesday...so...that is it from me... for today.
Goodnight from London