10am Update

The bounce continues - as expected.

The question remains..how far? Considering the daily cycle - as noted last night, its VERY viable for the market to cycle upward for the next 5-7 trading days all the way into opex next Friday.

A bearish scenario would be that market at least moves no higher than the recent high of 1422..or preferably 1395/1405. That would be a nice lower high..and would be a fine set up for a major wave'3 after opex.

The bullish scenario needs to get Sp' back above 1400 quickly. It is arguably VERY important we stay above the 10MA on the hourly charts. Its acceptable to briefly go below the 10MA, but generally, anyone day/swing trading in a Long position, would have a stop just below the 10MA.


Sp'60min

Vix'60min

Only a maniac would be adding..or holding to short positions right now.

Arguably, any new/existing long positions should have a 'get outta there!' stop around the sp'1365 level. As always, it depends on how flexible you wish to be..and we all know the algo-bots love to do stop-sweeps to kick traders out, in order to churn/create market volume.

*I hope these intra-day updates are of use this week. Good wishes for your trading day!

More later in the day.

Silver/Gold morning briefing

Good morning, a quick look at the two shiny metals.

Both Precious metals remain weak, on a daily, weekly, and monthly cycle. The 5-10 year up trend is of course still massively bullish, but the last year has been rough for those who bought near the highs.

SLV, daily

GLD, daily

Summary

Silver MUST hold $30..or there will be real trouble. Gold is still stronger, but is also still in a broad downward channel.

*considering the weakness in Copper (see previous post)...if I had to guess...I'd say Silver will snap through $30 within the next 1-4 trading days, and take Gold down with it.

Commodities - Bearish

Commodities seem to be leading the equity market by a week or two lately, they were certainly warning of problems last week - whilst SP' was making a new high at 1422.

First, lets look at the CRB

CRB, weekly, 6yr historic

We have broken below what was indeed probably a bear flag..and now the next major target is the support level at 290.

*if 290 fails to hold..then its highly probable we'll quickly drop to 250. That's 40pts..around 15%. Would it be a bold step to suggest that would knock off 10% (at least) from the main equity indexes, giving us sp'1250 ?


CRX, weekly

The CRX is a commodity stock-related index. Take a look at the mining or some of the Oil/Gas sector lately, many of them have been smashed down. The CRX broke a major trend support just over 2 weeks ago. The next major support is 800 (5% lower)...if that fails..then the next primary bear target would be 690 - a further 15% lower - this would arguably suggest sp'1150 sometime 'soon'.
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Lastly this evening, Metals..lets look at Copper

Copper, weekly

The bearish count on this chart is very preliminary. It assumes a major cycle high occurred in February 2011. We have seen a bullish pennant break...to the downside! This was very surprising, and bodes VERY badly for the main markets.

From a cycle perspective, just look at the MACD (blue bar histogram)..we are due to go negative cycle NEXT week. So..further declines in Copper, and the wider commodity/equity market would be the default viewpoint.
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So...whilst I earlier posted near term index cycles that do suggest a number of days upside, I am trying to keep in mind that commodities are flashing major warnings - and have been for a number of weeks.

This is an especially tricky time to trade. The ultimate question remains...was Sp'1422 the top?

Goodnight!