10am update - opening chop

Good morning. Indexes are opening choppy, a micro move to the downside, but its really all noise. There seems a complete lack of energy to the downside, and I'd be very surprised if we manage to close lower by more than 0.5%.

VIX remains muted in the low 15s, and is sporting a black fail candle on the hourly - not a good start for those seeking index declines across the morning.


sp'60min

sp'daily5

VIX'60min

Summary

I really don't expect much today or tomorrow. More than likely, we'll just put in a few doji-candle days, not least because its opex tomorrow.

At noted on the daily sp' chart, bears need to keep this nonsense below 1470. If we go no higher than 1462, that would make for an acceptable lower high, but then we'd need a strong rollover next week, and take out the recent 1427 low. Right now, that looks a tough task.

*as many have noted, metals and Oil are weak, and are not confirming this weeks market rally.

back at 12pm

Dirty European Paper - still bullish

Perhaps the most bizarre aspect of the financial year so far is the price action of the Euro currency. Despite literally hundreds of scary news reports/rumours, the Euro has managed a very strong rally since the 1.20 (to the dollar) lows in July, to the current 1.31, although we are only fractionally higher since the 1.30 opening level in January.


Euro, daily

Euro, weekly

Summary

The weekly chart looks disturbingly like it could be a bullish flag/pennant of some type. If that is the case, then the target would be somewhere between 1.37 and 1.43 in early 2013.

I have no doubt some Euro members will leave the currency union at some point, but that could literally be some years away. To my own surprise, there is now a distinct calm across the Eurozone. Yes, there have been some notable social disturbances in many countries - not least Spain and Greece. However, there is very little fear in the actual currency markets, traders seems very content with how things are right now.


A further wave higher

The current uptrend does look set to continue. Only with a break back below the weekly 10MA - currently @ 1.28, would I be able to consider that the current up cycle is complete.

If the up trend does continue though, then the outlook for US equity market would most certainly have a very strong currency motivator.

After all...Euro up...dollar lower..and generally, that should allow the algo-bots to melt this market higher into early 2013.

All those bullish maniacs still touting sp'1550/1600 by year end are STILL on track with their 'everything is alright with the market and the global economy' outlook.

The last thing that comes to mind..is the 'fiscal cliff' issue, but hey..the political lunatics will merely delay that for another year or two, right?

Goodnight from a Euro-less London

Daily Index Cycle update

The broader market showed gains for a third day, although the Dow and Nasdaq lagged due to IBM and INTC. We are still yet to break the QE spike highs of mid September, but we are likely within a single strong trading day of making such new highs.


IWM

Sp'daily5

Trans

Summary

Lets start with the tranny, which has closed above the 200 day MA for the first time in around a month. Bulls should seek a weekly closing high >5250 next week. That is certainly well within range, and the current trend supports it.

The SP' closed within around 1% of the 1474 high, it sure won't take much to break new highs.

I will note again, the break last week of the June rising support (across all indexes) IS an important issue to keep in mind, but that can be entirely thrown out as irrelevant, if we break sp'>1474 in the coming days.

The bulls are clearly back in control, and with opex on Friday, we are very likely to maintain the weekly gains so far, and merely trade sideways.

A little more later.