Wednesday, 4 December 2013

Staying focused on the bigger picture

Whilst the bulls and bears continue to battle it out in the remainder of the year, the bigger picture is what remains important. The weekly and monthly index trends remain strongly bullish, and there is easy upside to Dow 16500 and the sp'1840s.




It was not the most exciting of days, but hey, at least the bears saw some downside price action..if only moderate. Perhaps most notable were the gains in AAPL and TSLA. AAPL looks set for the 580/600 zone by year end. TSLA remains the most unstable, and tricky one to guess. Certainly, I'd be looking for at least an eventual test of the big $100 psy level.

Something I noticed just a little earlier...

'Are we going to crash' - from Red Line Scenario

I certainly like the style of wave decline, and there are some good obvious levels at which I would jump on board such a decline. In my view though, I think it pretty unlikely. FIrst, dow 15800s need to be broken, and even if that goes, there is the 50 day MA - along with lower bol' support in the 15500s.

Obviously, ANY break <15k would be decisive enough to confirm a major trend change, and everyone would need to prepare to trade much lower levels. I just think we'll more likely than not, just trundle somewhat higher for a few more months before we see any major break lower.

As ever, it is important to keep an open mind. One of these days the market is going to break lower..and the infamous dip buyers will be the ones needing a warrior helmet and titanium flak jacket.

Looking ahead

Tomorrow is actually pretty packed. We start with ADP jobs, and no doubt that will get the market fully focused on the bigger Friday jobs data. There is also home sales, ISM, and trade data. Most important of all...there is the last Fed beige book of the year.

The market should be especially focused on growth/inflation expectations for Q4..and Q1 2014. I'd especially look for metals/Oil to see some kind of major jump higher..if briefly.

*there is sig' QE of $3-4bn...bears...beware!

Permabear on the ocean drilling rig

I follow many companies, and today picked up Transocean (RIG). Yes, despite what some might think..I do actually trade on the long side. I remain a real fan of RIG, and was waiting for a retrace to the gap zone of 50/49 to start a position.

RIG, daily

I realise the upside targets are bold, but I am seeking the 60/65 zone by late spring 2014. $75/85 looks viable at some point next year. As ever, I am very curious to see how this one turns out. Hopefully, not in a giant ball of fire in the gulf of Mexico.

Goodnight from London