Tuesday 19 August 2014

Bulls back in full control

Equity bulls are back in full control, with all the bigger cycles now back to outright bullish for most indexes. The weekly 'rainbow' candle is confirming sp'1904 as a key floor, with viable upside to 2020/30 in early September.


sp'weekly8b


Summary

*first, I'll start with reference to last Friday. Price structure was a baby bear flag, and there was indeed viable downside to the sp'1930s, with VIX 15s. As I noted at the time though, I have ZERO interest in attempting to trade the short side, whilst the primary trend is UP.

So.. I have missed out on gains today (closed LONG Friday morning at 1962)...but at least I'm not losing on the short side.
-


Looking ahead

Tuesday will have CPI data and housing starts. That should be enough to give the market an excuse to move in the early morning.

*next sig' QE is Thursday
--


Waiting for a far better top to short

The recent down wave from 1991-04 was marginally interesting, but I continue to have no interest in trying to trade such tiny down waves. They are overly difficult to trade in my view...and simply not worth the effort.. or risk.

Instead, I remain looking for a key multi-month top, the following remains something I am keeping in mind...

sp'weekly9 - fib levels


Underlying MACD (green bar histogram) will likely tick upward for another 4-6 weeks, and then start to level out. So.. I'll only be interested in attempting to short the indexes/long VIX in mid/late September.

As ever, I'll endeavour to keep an open mind, and will adjust the outlook as I see fit in September.

Goodnight from London