Pre-Market Brief - its Bernanke day...again

Good morning. Here we go again, today will once again be all about the Bernanke, who speaks to the House Financial Services Committee at 10am.

Futures are moderately lower, sp-3pts, so we're set to open around 1360 - that is still pretty high, and just 14pts under the recent peak of 1374.


sp'60min

sp'daily5

Summary

So...when is this market going to drop? We've now seen around six full weeks of a broad up trend. There is mention in many other places of a 'necessary gap fill' around 1367/70. That would certainly make for a perfect top in this cycle.

I will look to short around 1367/70, if we can cycle higher today.
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Look to the MACD cycle on the daily chart, the third tower will be pretty close to completing today.

*there are 4 pieces of econ-data tomorrow, and I'm inclined to be short ahead of them, but as noted, it depends on the early action this morning.

Good wishes for Wednesday trading.

VIX/SP'500 Fibonacci targets for August

To close the trading day, lets take a quick look at the outlook for both the VIX and SP'500 - as based on extrapolated 1.6x Fib extensions. The Fib targets are based on the notion of a wave'1 down..and the 'best bear case' of wave'3 being 1.6x as strong as wave'1.


SP, daily, fib levels

VIX, daily, fib levels

Summary

VIX 35, and SP' 1170 ? Hmm, I suppose it could be argued that those two targets kinda match up, although perhaps we'd have VIX 37/40.. if we break into the sp'1100s.

Its very difficult to say of course, but...those are the levels to keep in mind for this August.

*Remember, we have more Bernanke tomorrow at 10am. I will be very tempted to re-short in the early morning if can get an early bounce to around 1365/70..and level out on the 15/60min smaller cycles.

Goodnight from London

Daily Index Cycle update - almost there

Across the various indexes, its looking like we're just about ready for the rollover, and the first attempt to break the recent sp'1266 low.

The dow in particular is setting up a very clear H/S formation on the daily cycle.


IWM

NYSE

Dow

Sp

Transports

Summary

A particularly weak day for the tranny. I'm not sure why this is, but the 'old leader' is probably just warning of trouble ahead - as it often does. We'll see if the rest of the main market catches up (or rather...down) in the next few days.

Whether sp'1374 holds, I'm really not too overly obsessing over. It is viable, but increasinly unlikely. The last real chance for 1375> is tomorrow or Thursday. Bulls need to keep pushing this market up..or it'll quickly fade - just as we saw this morning.

Under no outlook do I foresee the market breaking over..and putting in consecutive closes >1390.

If you think back to May..when the big wave'1 down began, I was noting the 'huge resistance zone' of 1375/80 -  that is probably still a factor in the next few days.

Those good bears who have been patiently waiting on the sidelines since the recent 1325 low, its almost time to start hitting buttons.

A little more later.