sp'monthly8 - QE phases
Summary
So... another day for the equity bulls, with a daily close of sp'1985. Frankly, even I'm surprised. I thought my upside target for the mid 1900s - stated two weeks ago, was bold, but here we are... just 1.7% from breaking the 'Alibaba top' of 2019.
The weekly charts offer a mixed picture.
sp'weekly
I suppose it could be argued we are back testing the old broken support/trend, but still.. this is one mighty strong bounce.. if it could even be called that anymore.
Not waving the white flag... quite yet
Despite a move above my own 'last line' of the sp'1970s... there is still a moderate chance we'll see a major wave lower in November.
However, with each daily close >1970... it becomes less probable. The fact the Transports broke a new historic high this morning, makes a test of the 1820 low that bit more unlikely.
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Looking ahead
Wednesday will of course be all about the FOMC. The announcement is due at 2pm. There will NOT be a Yellen press conference. Market is expecting the termination of QE3, along with a press release stating 'rates will remain low'.
*Next QE is.... well, at least not until spring 2015
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A busy Wednesday is ahead
Today sure felt like bearish capitulation, as those who are already short were short-stopped in the 1970s. But what about Fed day?
I'll strongly consider an index-short tomorrow, after the 2pm announcement, but it will depend on price action. Personally, I want to see a minor initial spike on the upside, something on the order of 3-6pts, whether that is to sp'1980, 85, or 90s. A retrace of some kind... perhaps to the 1920/00 zone seems viable. Hopes of sub 1900... are pretty faded right now.
Finally, I want to say thanks to those that do say hello during the trading day... its always good to hear from some of you, bearish or otherwise ;)
One of these days the market will blow up.... when it happens.. I'll be there...
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Goodnight from London