It has been a very dynamic week for the market, slipping to sp'1767, before a hyper-ramp into the 1800s. With further QE this Friday, equity bulls should be seeking a weekly close in the 1820s, which would be extremely bullish into January.
The weekly charts are offering a clear bull flag spanning the past four weeks, and the Dow is arguably already confirming that outlook - with a new historic high today. With yesterdays clear turn - as confirmed in the VIX, there is little reason why the market won't broadly rally into mid/late January.
For me, the only issue is where we get stuck in the 1875/1925 zone next month, before a drop of 75-125pts. Even then, I'd still look for another wave higher..into the March/May period.
The week concludes with GDP (final reading), market is expecting an unchanged Q3 growth rate of 3.6%.
Friday is Quad-opex..so there will likely be some very serious price chop across the day.
*there is the last sig' QE of 2013, around $3bn, bears beware!
The new crazy talk
The latest chatter out there is of a cycle top in mid January, often linked with some sort of analogy to the market crash of autumn 1929. It should be embarrassing to many that the 1929 analogy is still being thrown out there, and overlaid onto the current cycle.
Naturally, Zerohedge is leading the way with this sort of nonsense talk, and what happens when it is late spring, and we're in the sp'1900s..or even 2000s? Ohh yeah, you'll see the same people bring out the 1929 chart again, and start touting their relentless 'omg, the top really is in..here comes the crash wave'.
As many other traders might also admit, I've found this market a real battle zone to trade over the past few five years, but hell, at least I've progressed beyond the 'call a top every day' phase.
The primary trend remains to the upside, lets see if we get a strong weekly close in the sp'1820s!
Goodnight from London