Wednesday, 2 September 2015

Just a retrace?

After a very significant net daily decline for the sp'500 of -58pts @ 1913 (intra low 1903), the big question is whether today was merely part of the expected retrace of last weeks hyper-gain of 126pts... or day'2 of a down wave that will take out the recent double floor of 1867?



*its been a long day.... so I will keep this relatively short.

As for the question... I am indeed still guessing this decline from the Thursday spike high of sp'1993 to today's low of 1903 is a retrace (if a very powerful one).

re: chart'8. Best case downside after mid' Sept' remains the sp'1725/00 zone.. which would equate to Dow somewhere in the low 14000s. VIX would likely take out the recent high of 53s.. and max out in the 65/75 zone... which is a pretty bizarre thought after some years of waiting for sustained action in the mere 20s!

Looking ahead

Wed' will see ADP jobs, EIA oil report, factory orders, productivity/costs, and a Fed Beige book (2pm).

Market will be increasingly focused on the looming Thursday ECB meeting (along with a Draghi press conf').. and the Friday jobs data.

Not a great start to the month


We have the second consecutive red candle on the 'rainbow' chart, something not seen since the collapse wave of 2011. There will be clear resistance at the 10MA of 2047. I certainly don't see sustained price action above sp'2080 for probably the rest of the year.

The lower bollinger at 1838 is an obvious target for Sept/Oct'... along with the nearby Oct'2014 low of 1820.

As for yours truly.. like last week, I have again been overly early on an AAPL-long, but given another 2-3 days, I should have a fair chance at exiting that at least moderately profitable before the (3 day) holiday weekend. As things are, I remain under a 'trading light' rule until mid Sept'. Once the FOMC is out of the way.. and if we're somewhere >2000, I'll go heavy short... in prep' for a crash wave to the low 1700s.

It would be somewhat annoying if we're already in the crash wave itself...  we shall see.

Goodnight from London