Pre-Market Brief

Good morning. Futures are flat, as the market awaits the monthly jobs data. It is pretty quiet out there.

UPDATE: Jobs data: 171k vs 125k expected..... market ramps sp 7pts on the news, we're set to open sp'1435


sp'60min

sp'daily5

Summary

The only way I would be bearish about early next week is if we break below Wednesdays close sp'1412. Such a 'full reversal' would certainly be interesting, but I have to say, that seems unlikely today.

*factory orders data at 10am, still to come!

back at 10am

UPDATE 9.15am

Metals are especially weak this morning. Clown network says its due to 'deflationary fears', but I think they're just making that stuff up.

Indexes still look set to open higher by 0.5%..and thus confirming the baby bull flag.

If we're going to see the market not break new index highs, we need to see a strong reversal today..and at least a moderately red close. 

Primary trend...uncertain

Today saw the indexes rally for the first time in two weeks. Despite today's price action, the bigger monthly charts are still suggesting 'weakness', but we are within a very tricky trading level, one that both bulls and bears should be very cautious about.


sp'monthly3, rainbow

dow'monthly2, rainbow

Summary

With the new month, the important 10MA on the sp' is now up to the 1390s. That coincides with the important Sept'3 low of sp'1397.

The doomer bears out there MUST see a few consecutive daily closes <1397, in order to have any degree of confidence. Until that level is taken out, no one can get 'confidently bearish'. It is that simple.

The bulls merely need to push to new index highs, which are disturbingly only 3% away.

With the US election next week, it would be somewhat understandable if we rally for a few weeks. If that is the case, it would be surprising if we don't quickly make new index highs.


Trading stops..are useful.

Let me be clear, the big monthly charts - including WTIC Oil, and even the precious metals, are warning of 'some' weakness. Whether bullish or bearish though, the current index levels are a very treacherous zone to be trading.

Arguably the 'safer' bear trade is to chase lower with a break <1397, and the 'safer' bull trade is to chase higher once we see new index highs >1474. Until we see the market break outside this 1397-1474 range, I don't think anyone can be confident of where we are headed.

Goodnight from London

Daily Index Cycle update

The broader market saw its first major rally in over two weeks, closing around 1% higher on most indexes. With the VIX falling 10%, the bulls are back in control. Today was day'1 up, it will be important for the bulls to maintain these levels into the weekend.


Dow

Sp'daily5

Summary

The last 5 trading days have been a real mess. The bears tried to break the big 1400 level, but failed. It took the bulls five opening gaps higher to finally succeed.

The near term trend on all daily charts is now bullish. The underlying MACD (blue bar histogram) cycle is now indeed battling higher, and will go positive cycle in about 2-3 trading days - just in time for the election.

Are we looking at a major ramp to new index highs later next week?


The bigger picture charts...largely negated.

The weekly charts - which I have been droning on about recently are still suggestive of weakness, as are the monthly charts. Yet, the warnings were only 'mild' ones, and that has been the problem the bears have faced for so many months..and arguably for the past four years.

So, it would seem..on balance...we're going up. Clearly, the bulls will want to see sp>1474 this month, and that will open up the big 1500s, just in time for Santa.

A little more later.