10am update - the rally not going to hold?

Despite the opening gains..there are very clear warnings right now. The VIX is holding up VERY strongly, when was the last time we saw the VIX green whilst the market was up almost 1% ?

*Consumer confidence: 64.9  vs 69.7 expected...hmm, much worse than expected!


IWM, 60min

SP'60min

VIX, 60min

Summary

This next hour is very important. If the bears are going to stop this market advancing, they need to do it this hour!

Note that the VIX'60min cycle is due to go +cycle in 2-4 hours. So, the opportunity does exist for the main indexes to turn red sometime in the late afternoon.
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FB remains laughably weak, sub 30s' still likely by the close. Quite a few people buying FB option puts today, but the bid/ask spread is overly wide - but thats normal for first day/week trading.


FB, daily

More later!

Pre-Market Brief

Good morning. Futures held the overnight gains, looks like we'll open up around 0.5/0.75%, taking the sp' from 1317 to 1324 or so. That is just a touch below the recent highs, and its possible we might still turn red on the main indexes by late morning.

We have housing and consumer confidence data today, they are not exactly the most market moving things, but market will doubtless be swayed a little. I'd guess con'con will show just as stupidly high a number as the consumer sentiment number from last week. Just who are they asking those 'how bullish are you?' questions anyway?


Sp'60min

Considering the cycles, we should be opening lower, but since we're not, I'd still look for black candles on the indexes (especially the Rus'2000) in the opening 9.30/10am period. Similarly, if the VIX opens down around 5%, look for a red reversal candle.

As ever, how we close today..will be even more important. Bears would really prefer a close under sp'1300, but that now looks way out of range. Something in the 1310/05 would be my target.

Bulls just need to break 1330..and that opens up 1340...if that is held over..then 1370/80.
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*FB -1.6% in pre-market...sub $30 is possible today !

More across the day...

Monday Night Chatter

Its the midnight hour in London City, the futures wheel is indeed spinning, so far its showing a moderate gain of sp'+5/6pts or so. Nothing too significant, but neither is it a decline. The bears could understandably be a little concerned that there might yet be some crazy rumour causing a stupid large gap higher.

Regardless, the following remains my outlook....

..and relating to the 5 scenario chart...

My best guess remains scenario B, where the Bernanke will likely be under pressure from even the normally anti-printing groups to initiate a very large QE3 ($1 trillion MBS purchases?), sometime in late summer.

Zerohedge reporting that FB was down again 2-3% in European trading. A break under $30 this Tuesday probably opens up 26/24 by the end of this week. There is also the issue that options trading will begin at the Tuesday open, I'm sure many traders will be prepared to chase FB lower via Puts right from the open.

Hope you enjoyed the 3 day break, we have a busy 4 day week ahead.

Goodnight!