Another down day for the market, and with the break of the sp'1538 March low, the bulls are now clearly in real trouble. With the weekly charts looking imminently prone to a major snap lower, there is a chance of very significant downside across the next six weeks.
spdaily5b - best guess
sp'weekly2, rainbow
vix,weekly
Summary
Today was a real mind-frak..to be honest.
I took the simple decision to merely exit a USO (long) trade at the open, and sit the rest of the day out. I still think we have a VERY clear 5 waves lower, from what I now am calling a top @ sp'1597. There are many other issues that support weakness in the main US and world markets into May, and I won't be changing my mid-term bearish outlook any time soon.
I do of course seek a 2-3 day bounce - forming a sub'2 wave (see daily5b), which - since we closed lower today, now seems likely not to complete until next Mon/Tuesday.
There are certainly days when I simply can't stomach the instability, and today was one of them.
Small H/S, within big H/S ?
I had this idea recently, but ditched it when we broke above the sp'1576 high. I think it probably deserves being highlighted again though.
sp'daily5
One major key issue is extrapolating viable downside - see pink lines, first set is from 1597/1536 - which gives 1485. Second set is 1597/1485...which gives 1380. I have to say the latter number would make for a pretty exciting May. It would take the market to marginally negative on the year, and I can only imagine the near terror on the faces of those cheer leading maniacs on clown finance TV.
US, GDP Q1 - weak, weak, WEAK!
I thought I'd end today with a few thoughts on the big economic picture. We have Q1 GDP data out next Friday Apr'26. The Q4 GDP data - to the surprise of many, originally came in a little negative, but (I think) the second revision was +0.4%. Well below 'stall speed', and clearly, borderline recession on any basis.
My guess for next Fridays data point is for -0.5 to -1.0%. I think that would make for a real wake up call to the mainstream, and be a clear warning that Q4s weakness was not a one off. The EU is a basket case, and that has to have been affecting the US for some considerable time now. I would be stunned if GDP came in over +2%, and even 1% looks like a stretch.
There are possible implications for Gold/Silver, in that if the main market sells down on a lousy economic outlook, perhaps the metals will use it as an excuse to ramp 'flight to safety'?, after their recent extreme drops? Its just an idea, and I will add, I sure won't be trading them.
Looking ahead
There is no econ-data to end the week, and of course, its option expiration for April. It could certainly be a bit choppy across the day, and especially in the closing hour.
I will throw out a vague guess that the market makers might want to nail/pin the SPY and SP'500 @ 155/1550, that is just over 8pts higher. Similarly, for AAPL, I'd guess they will try to pin it @ $400, to nuke all the call and put holders - at what is a very obvious key strike level.
So, lets see if we close the week @ sp'1550, with AAPL @ $400.
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*I do not intend to trade tomorrow, and indeed, look to wait for a full re-short in the sp'1570s, with VIX back in the 15s. As ever, I will try to keep an open mind to things, but broadly speaking, I will be looking to trade the daily5b chart outlook.
Finally, it was good to see some more comments today, always good to hear from some of you!
Goodnight from London
