Pre-Market Brief

Good morning. The German court (as most expected) voted yes to the ESM bond buying, so, no market upset today. Futures are a touch higher, sp +3pts, we're set to open around 1435, just 3pts below the recent high.


sp'60min

sp'daily5

Summary

So, with the Germans voting yes, that's one major hurdle for the bulls out of the way. All the bull maniacs need now is for Benny to at least 'strongly hint' at forthcoming QE, or indeed actually announce new QE itself . I not expect the latter, and for this reason, I think the market will eventually sell off after any initial spike higher.

Considering the MACD on the hourly index cycle I'm still very reluctant to re-short, although we're pretty close to my price target level of 1440/45. I suppose its possible we'll spike briefly to 1450/60 if new QE is announce, but as noted, I'm guessing....no.

Good wishes for Wednesday trading!

Sp'1400 remains first key support

With the German court ruling tomorrow, and the Fed decision this Thursday, the next few days will be pretty dynamic. Also important to keep in mind, we have retail sales data this Friday.

From an index point of view, its clear sp'1400 is now the first line that the bears need to break. So, even if the Germans and/or the Bernanke upset the market, the bulls have a clear 33pts buffer zone of comfort.


sp' weekly, 2yr

Summary

Bulls have had a great run from the June low of 1266 to 1433, that's a very significant 167pts in just over 3 months. At the current rate of increase, we'll close 2012 @ sp'1600. Now that is probably the most disturbing trend/outlook I've posted in some months.

From a MACD (blue bar histogram) cycle, we are potentially levelling out on the cycle, but really, it will take at least 2 or 3 weeks to have any confidence that a rollover is taking place. Of course, right now, prices are still very much in an up trend.

One key aspect that I think is paramount to keep in mind - whether bullish or bearish minded, is that a break of 1350, will in theory at least, open the door to a fast move to 1200/1170, as based on various monthly support/MAs. The notion that the Sp' will be at 1350 sometime in the next month or so, that's a pretty bold target, considering the present general weekly trend.

So, all eyes to the German constitutional court tomorrow, lets see if they are obedient to the ECB wishes, and vote Ja.

Goodnight from London

Daily Index Cycle update

The main market close broadly higher, only tech' was a little laggy , largely due to mild concerns about how AAPL stock will react after the iPhone5 is launched.

Broadly speaking, the near term trend most certainly remains UP.


IWM, daily

Dow, daily

Sp' daily5

Transports

Summary

Interestingly, - as I often note, the transports showed leadership today, and closed reasonably well. There can definitely be expected further upside tomorrow, and possibly at least the earlier part of Thursday.

The Dow put in a new closing high today, bullish?


What happens Thursday with the Fed?

It is any ones guess what the Fed do, but as some have been stating lately, the Fed have NEVER pre-empted a down cycle with QE (twist does not count). They have always waited. Those expecting some kind open-ended QE to be announced this Thursday, I believe they will again be very disappointed, and sell..potentially quite hard.

If we are sp'1440/45 before the Fed make their decision this Thursday (12.30pm), I'll re-short. Until then...I wait.

A little more later.