Pre-Market Brief

Good morning. Overnight futures minor chop has gently turned to moderate gains so far. SP'500 is currently set to rise 6pts to around 1322. There are two minor pieces of econ-data at 10am.


Sp'60min

Summary

By the end of today, the upper channel line will be sp'1320. A close today over 1325 would likely confirm a new wave higher is indeed underway.

For the bulls, a second consecutive close over the hourly 10MA - currently 1305 will be important, and is something we've not seen since late April.

*Best buy numbers came in line, but same store sales kinda sucked. They are leaving guidance unchanged...I'm guessing they will have to change that later in the year once they concede the US is probably going to slip into a recession.

*FB is already lower by around a dollar, back to the low 33s. Fair Value remains $4, and that is arguably being overly generous. Mid-term primary price target is $12/10, within 9 months.
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As ever....more across the day.

Sp'500 weekly - some ideas to keep in mind

With the Sp'500 index breaking higher today - the first decent closing gain in over 3 weeks, this past weekends idea for a new up-cycle is already starting to take shape.


Sp' weekly - 3 scenarios

Sp' weekly, bullish outlook (the wave'5 idea)

Sp'monthly - primary outlook remains bearish

Summary

Today's 20 point gain in the sp'500 was a good start to the bullish near term outlook (even if its a wave'2 up). First targets are 1340, then 1370/80. The weekly 10MA @ 1368 will also be a soft resistance level to the advance. Its certainly interesting that the 1370/80 level would make for an ideal level to bounce to, before a collapse wave'3 in June.

I think we'll know if the 'wave'5 chart idea is correct, if we are higher than sp'1340 by the end of this week. If we are higher than 1352, that would make for a bullish engulfing candle on the weekly chart - matching the very same style of candle seen after wave'2 completed last November. It would be VERY bullish, and highly suggestive of new index highs by late June/July - perhaps as high as sp' 1440/60.

So...that's something to keep in mind for the rest of this week.

Goodnight from London city.

Daily Cycle Update

It appears the market has floored on the daily cycle at the secondary support level of sp'1292, and we are beginning some degree of an up-cycle. The move lower in the VIX today likely confirms this viewpoint.


IWM daily, bearish outlook

NASDAQ Comp

Dow

Sp, bullish outlook

Transports

Summary

The above selection are a real mixture of outlooks. I'm trying to keep a very open mind as to what happens in the coming few weeks. The bounce/rally, could easily just be a minor wave'2 UP, before a collapse wave in June.

It will be imperative for short term traders to watch for the market getting stuck at either 1340, 1370/80..and whether it can break above 1295. A move over 1422 would doubtless dismay the bears, and lure in another large number of permabulls.


My best guess?

I defer to the monthly charts when I'm unsure, and monthly charts say 'sp'1100s this year'. As I noted this past weekend, it is even viable we get new highs briefly in June, before quickly falling back - aka, the 'ultimate mind-frak for traders'.

Right now, my best guess would be we move up to that big resistance area of sp'1380. That would make for a strong minor wave'2 UP of 7%, and if we do rollover at that level, a swift and severe collapse to the sp'1150/00 level would occur in the span of 2-4 weeks, no later than early July.

For the moment, I remain in an underwater long position, looking to exit around 1340..where I will reassess.