Wednesday 7 December 2016

Where are the 2138 people?

US equity indexes closed broadly higher, sp +7pts @ 2212. The two leaders - Trans/R2K, settled higher by 0.6% and 1.1% respectively. VIX settled -2.9% @ 11.79. Near term outlook threatens some cooling to the 50dma, which will soon be in the 2160s. Broadly though, the market looks strong, with a year end close somewhere around 2230.




Suffice to add, a day of moderate chop, leaning on the upside. Most notable, a new historic high for the second market leader - R2K, of 1353.

With the market mostly trading choppy, the VIX was further ground lower, breaking into the 11s, the lowest level since early Sept'.

On balance, a move to test the 50dma in the 2160s still seems probable, but that will now only likely equate to VIX 15/16s. Even the 17s look a stretch ahead of the fed raising rates.

I'll end tonight with a question...

Where are the people who were touting the importance of the Fibonacci extrapolation number of sp'2138?

Remember how for MANY years - some as early as late 2009, highlighted the fact that if you extrapolate from the 2007 high to the 2009 low.... the 1.618x fib' gave 2138.

sp'monthly5b - fib numbers

Last year saw the market get decisively stuck, with a May 2015 high of sp'2134. Clearly, it was reflective and evidence that 2138 WAS important. We saw two sig' down waves, the first in Aug', and then another in Jan/early Feb'.

This past July saw the May 2015 high decisively broken.

At that time I did note that the next number of importance was around sp'3K...  3047.34 to be precise.

Where are those same people who touted 2138 for years? Why aren't they now highlighting sp'3K as the next natural target ?

Similarly, for the Dow...

Dow, monthly3 - fib numbers

Its partly why this past weekend I noted there is a viable upside target of 25/26k by late 2017/early 2018.

Anyway... its something to reflect on, and I sure don't see anyone else highlighting this.

Goodnight from London