Mr Market now awaits the monthly jobs data for January. We have seen a reasonable bounce from sp'1737 to 1773. Is this the start of a new multi-week up wave, or was Thursday the mere conclusion of the latest 'stupid bounce'? Friday should be pretty dynamic, one way or another.
sp'daily7 - bearish outlook
sp'daily8 - the bullish outlook
Considering the fact we still have THREE consecutive red candles on the weekly 'rainbow' (Elder Impulse) index charts, I'm highly inclined to hold to the original outlook.- of weekly'7.
For those doomer bears seeking much lower levels this spring/summer, they really should be seeking a hit of the lower weekly bollinger, currently 1690 - which will jump to 1700/05 next week.
More than anything, recent price action is nothing like what we saw in 2013. Indeed, the recent two major daily declines of -38 and -40pts on the sp'500, are 'something new'. Since the break of 1815, I have to hold to weekly charts, which remain bearish.
Market is seeking monthly job gains of around 181k, with a static jobless headline rate of 6.7% Frankly, I find it hard to believe we'll see a gain >100k, but hey, its the BLS data, and that is always tough to 'guess' their calculations.
Besides the monthly jobs data, there is also consumer credit data in the late afternoon.
*there is no sig' QE until next Monday
So...we now await the next big econ data point. Last month saw 74k net job gains, which really surprised many - myself included. If tomorrows number comes in <100k, then surely we'll lose all of today's gains..and keep falling?
The hourly index and VIX cycles are both arguably exhausted, and there is certainly the potential for a major drop tomorrow. Equity bears should be seeking a weekly close <1750, with a VIX of 19.50..or higher.
Perhaps the following outlines what I believe is viable tomorrow in what remains a twisted and bizarre market...
Goodnight from London