Pre-Market Brief

Good morning. Futures have turned around from sp -5pts overnight, to now +3pts, we're set to open around sp'1432.  That's a pretty good turn, but we do need to break the recent high of 1438.

Target remains 1445, that may take as long as tomorrow to hit.


sp'60min

sp,daily5

Summary

So, those bears looking for follow through after yesterdays closing hour weakness will be annoyed at the overnight swing.

I've seen plenty of others out there though suggest this is some kind of fourth wave, with one final push into the low 1440s...just as I am looking for.






If we can somehow break over 1440 today, I will be very tempted to re-short ahead of the German court ruling and FOMC.
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*it is now eleven years since that fateful morning.... a reminder that we're all only getting older.

Good wishes for Tuesday trading.

Bears need Dow back under 13k

With the market weakening into the close today, there is again a little increase in bearish chatter across the financial web.

The Dow - along with all other indexes, is continuing to climb on a general basis, but its certainly looking like a giant wedge, which by definition should break to the downside. There is reasonable confidence in this outlook, the big unknown though is how far down do we go in the next multi-week down cycle.


Dow, weekly, 2yr

Dow, monthly, 6yr

Summary

Clearly, dow 13k is a key level of support, and until that is taken out, the bears are arguably better to just sit and wait for the break lower first. After all, the current trend could just keep on going all the way into 2013.

What is interesting is if 12k fails - as near impossible as that might seem right now,  it would probably lead to an eventual hit of the 11k support/channel. Right now, 11k sure is a very long way down, a 'distant hope' doesn't even begin to cover it.

Were I the Bernanke, I'd sure wait until dow'11k, and then spool up the digital printers to max. As it is, another FOMC decision is due this Thursday at 12.30pm. We'll just have to see what the Fed maniacs decide, I'm guessing nothing is done until the December FOMC.

As for the German court decision on the ECM this Wednesday (time unknown), that's probably even more an unknown variable than the Fed.

Goodnight from London

Daily Index Cycle update

The biggest closing decline in the sp' for six days, but the transports is warning of further upside in the broader market this Tuesday, and possibly also into Wednesday.

Primary target remains sp'1445.


Sp'daily5

Transports

Summary

The broader market was weak into the close, but it really wasn't anything for the bears to justifiably get excited about. Considering the mega ramp on Thursday, today only makes a minor dent to those strong gains.

I think the tranny should be a real warning to the bears tomorrow, it shows no sign of weakness, and in fact is due to have a MACD bullish cross, and go positive on the underlying cycle. A move to around 5200 looks easily within range, thats around 2%, and would equate to sp'1445.

I am patiently looking to re-short this nasty market somewhere in the 1440/45 area. Downside should be to at least 1420, if not 1375 by the end of the month.

Lets be clear though, any of the 'doomers' out there need to see a monthly close <1375, until that is achieved, shorting this market is definately the riskier side of the trade.

A little more later.