10am update - messy open

We're now 1% lower or so than the overnight peak. Not exactly a super bullish open anymore. Even the cheer leading maniacs on clown channel appear to realise that the latest bailout plan (and it remains a plan still), is not going to lead to underlying economic growth in Spain.


IWM'60min

Sp'60min

Summary

IWM putting in a classic warning black doom candle - with the VIX hollow-red reversal candle (15min cycle).

I sure won't be shorting from this level though, given a few hours of shakeout, this market might easily still close up 1% or so, with follow through tomorrow.
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Better to do nothing.

Pre-Market Brief

Good morning. Futures are currently showing sp+9pts, so that would be an open around 1334. That is somewhat off the highs of 1341.

I hold to my original target zone of 1350/60 for this week, however, after a lot of consideration, I think there is the real risk to bears that wave'B has not occurred yet, in which case, I would look for a move from 1350 to 1300..and then a final high in the 1360/70s later next week.


Primary outlook

A secondary outlook

sp'60min

Summary

I think it will be fine to re-short in the 1350/60 zone, although that seems not likely to be hit today. The plan remains to short late Tuesday or early Wednesday 1350/60. Certainly, I won't be shorting today, its still too early in price and time.

Good wishes for the week ahead

Sunday night - bits and pieces

Futures showing...sp+16 - so thats sp'1341 - a gap straight over the troublesome area of 1332/38/40. Bears can understandably feel annoyed, but its not surprising - the daily trend IS up after all.

For this Sunday night, I thought I'd highlight a few different things for you to keep in mind over the coming week....I'm sure there will be something of interest!


sp daily, fib levels

My target range is 1350/60 this week, the fib levels suggesting something around 1340/65. 


sp, monthly, scenarios

The bull maniacs will clearly be now looking for scenario A' to occur. After the dire jobs data some 9 days ago, and this weekends Spanish bank bailout (so far..its just a plan..nothing is done yet)...many of the bulls are already touting new highs of sp>1422.

From a cycle perspective, a brief move to 1350 would be easily acceptable for a wave'2....and then a very strong down move into the 1100s.


VEU, world indexes

Seeking a move back to the 10MA of 41, and then a fail - to be confirmed the following week.

This VEU chart out ranks EVERYTHING currently out there in chart-land. It was inspired by John Murphy of Stockcharts no less, but I will continue to highlight it..over and over again. A break under 35.0 will be the very last warning the bulls get this summer.


Dow, weekly

A dow target this week of 12750/850 looks very reasonable, before a sharp reversal. I can only imagine the surprise, soon to become terror as we quickly take out the recent low of 12035. So, look for the dow to break 12k...that will open up a quick move to 11k. A move under 11k..and then the games can begin.


Summary - The week ahead

We don't really have too much key econ-data this week. The major one is Retail Sales data on Wednesday - market is actually expecting a minor fall of 0.2%. Hmm, so a positive number would be another excuse for the market to rally Wednesday.


The plan?

I'm sitting this nonsense out still, I will not feel comfortable re-shorting until at least the low sp'1350s. If we are at those levels (somehow by late Tuesday), I might take a short trade. Otherwise, I might sit out the entire week.

There remains the issue of whether we have even see a clear enough wave'B yet (see intra day charts from Friday). If we haven't, then maybe we'll get stuck at 1340..then 1300..and finally a move 1350/60s in the following week.

What matters for all the good bears out there, is to have good dry powder ready for the next wave lower- which should be much more dynamic and stronger than what we saw in May. A big short from the mid 1300s to the low 1100s...yeah, that would make the entire summer a good one.

Goodnight from London