Dow, daily
sp'daily5
Summary
Unquestionably, with a new historic high in the Dow, the broader ramp from Oct'15th continues. Price structure is offering an extremely broad wedge... but we're already at the upper limit.
There is a viable micro double top on the sp'500, but considering the new Dow high, it is highly suspect as to whether it will hold for the remainder of this week.
VIX stuck in the low teens
Volatility remains subdued, although is holding above the low from last Friday. Underlying MACD (blue bar histogram) continues to tick higher, indicating bullish price momentum (in equities) is weakening.
VIX'daily3
First upside remains the 18/20 zone... the mid 20s look 'highly' difficult, even if the key sp'1900 threshold is tested before Santa arrives.
--
Looking ahead
Thursday will see the usual jobless claims and productivity/costs data.
There is an an ECB meeting, and some in market land are going to be real disappointed if there is not further news on some kind of QE.
Even more importantly, the market will be focused on the Friday monthly jobs data. It is also notable that Yellen is speaking (Friday morning) - along with other central bankers, at a Paris meeting.
--
The next wave lower
A retrace of some degree is of course going to happen in the near term. The issue is... how low? Right now, considering 'everything', a break under sp'1900 looks almost impossible.
I noticed a new post from Redlinescenario this evening. A fall to 1900.. and then another hyper-ramp into early 2015 would make sense. The only issue I'd then ask is... 'why would it stop there?' What happens if we see the R2K break above the double top high of 1212/13?
Anyway, lets see how the rest of the week plays out. Two days is plenty of time for the bears to have a chance at knocking the market back <sp'2000, which would open the door to a further 5% across the next week or two.
Goodnight from London