Pre-market brief -short the open

Good morning

Whilst yet more rain and thunderbolts strike a little to close to my apartment, its time to prepare to end the week well.

Futures suggest around sp+6pts.

SP'15min cycle

Considering the state of the 15min and 60min cycles, a move to 1380/83 at the open is an easy short I believe. Of course, any decent bear would have equivalent stops around sp'1390/95, depending on how lose you like to be.

I think we have a good chance at slipping down to 1365 today. Anything in the 1350s would suggest something much more 'exciting' for next week, maybe even a break into sub'1300.

From a move to 1365 later today, we could trundle sideways - forming a wave'2 (bear flag)..before Mon/Tue' when the bigger wave'3 lower should occur. We'll know when we get there!

Regardless, only a maniac would be chasing the open..and going Long right now. 

Good wishes for Friday trading.

VIX weekly - bears should be seeking 19/20

Good morning

The VIX is so far failing to indicate any trouble/fear in the market, although we are of course only 3% or so from the recent highs. The bears need to see VIX close today in a good state. At the very minimum another close over the 10MA (16.89) is essential, but preferably..19s. A Friday close of 20+ would be the perfect set up for SP'1340/1300 next week.


VIX, weekly

More throughout the day !

Something for the Bulls to sleep on

To conclude today, lets just end with the SP' monthly, which remains my favourite to highlight.


SP'monthly..(simple version)

In both recent cases where we had a red candle after a 6+ month run, the market pulled back considerably. In 2010 we saw the May-July fall - which included the infamous flash-crash. Last year, we saw a very consistent decline spanning 6 months.

The best - and most obvious 'guess' right now, assuming we are starting a new multi-month down cycle, would be the lower channel, currently 1100, and which by early autumn will be around 1125. Such a target is some 20% lower, and would make for some very nice gains for those who could actively trade it from the short-side.

Goodnight..from a rainy London