Pre-Market Brief

Good morning. Futures are a touch higher, the sp +2pts, we're set to open around 1411. I'm kinda surprised at the lack of a significant gap lower. Metals and Oil are especially weak, although the dollar is also weak, falling to USD 79.60s, this is a borderline break of a 2 year up channel. More on the latter..later.


sp'60min

sp'daily5

USD, monthly, rainbow

Summary

So, no big gap lower, but the near term trend does allow for some weakness this morning. We could still trundle down to 1405/00, with the VIX 17s.

Indeed, eyes on the VIX, which should be a rough guide to re-shorting (as necessary) across this week.

I am short, seeking my next around exit around 1395/85, although right now, I'd settle for 1400 !

*what will be important for the bears, no breaks back above 1420. The daily, and monthly charts argue against such a move anyway.

RE: dollar. I'm somewhat bemused at further $ weakness in pre-market. So far, its nothing too significant, but its pretty close to breaking what is a two year channel on the monthly chart. Anything <79.50, and the channel is surely busted, which frankly, would be a big deal.

More across the day!
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UPDATE 8.50am. Indexes showing weakness, sp-2pts, set to open 1407.

I will look to (briefly) exit @ sp'1400 - if I can get it in the opening 30 minutes.

GOLD - $21... only another $60 to.go.

Be clear though, I'll merely re-short a few hours later though.
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UPDATE 9.20am Stock of the week AAPL

It will be a news story later this week. 'Death Cross' on AAPL, as the 50 crosses under the 200MA.

This X' is likely to occur BEFORE this week ends. It will very likely become a news story that the clown networks run with, not least if the main indexes are also starting to unravel.

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Futures..back to largely flat. Still looks like we'll get down to 1403/00 within the opening hour though.

Major wave lower underway?

A new week and month, and today may have seen the peak of what was probably a wave'2. If that is the case, then December will be all about market weakness, and nothing else. The monthly rainbow (Elder Impulse) charts are still signalling a provisional warning of trouble, and trouble is indeed what I'm expecting.


sp'monthly3, rainbow

sp'weekly2, rainbow

Summary

Today ended well for the bears. In some ways, it was good we opened a little higher - although I realise those bears who got stopped out, would not agree.

We have a good spike on the daily candles, we tested the 50 day MA - and failed, and hit (approx) the 61.8% fib retracement. The bears have a lot to be pleased about today.


Keeping an open mind

Now, I'm bearish for almost ALL of this week (I am admittedly concerned about Friday - jobs data), and I think its important to consider a few of  the broader near term scenarios...


sp'daily5b three scenarios..

I can't see scenario A', the monthly charts argue against it.

I'm very much unsure whether we just fall straight down (B)- breaking the sp'1343 low, or we are yet to put in a B' wave (scenario C). I just don't know.

What will be of utmost importance, when we are trading in the 1380/70s, bears need to be very mindful, and personally, I will probably exit there, and see what happens. If market keeps falling, and takes out 1343, I'd merely rejoin the bear train.

Be absolutely clear, there is still the annoying possibility that this market might go to 1380/70..and then bounce again, perhaps even breaking into the 1430/40s. Although I will again note that the monthly charts STRONGLY argue against such an outlook.


A quick update on the daily Fib' chart.

Sp'daily7 - fibs

A break of the recent sp'1343 low, should in theory open up a test of the June low in the 1260s, and a standard 1.6x fib extension, would certainly suggest it.


Important days ahead

This week will indeed be important, not least if we can break under the 200 day MA @ sp'1385, and move into the 1370/60s. That seems a long way down, but it is viable, not least if the market gets increasinggly frustrated at the lack of a fiscal cliff agreement.After all, the clock is ticking.

Today was good, yet I have much higher (bearish) hopes for both tomorrow and Wednesday.

Goodnight from London

Daily Index Cycle update

The market closed moderately lower, after the opening minor gains. The closing hour was choppy, but closed somewhat bearish, and the declines were confirmed with a slightly higher VIX. It would appear we are now seeing a new down cycle underway, the only issue is how far down do we fall, and over what time span.


Dow

Nasdaq Comp

Sp'daily5

Trans

Summary

Well, that went pretty good after a somewhat annoying open. I was always concerned I was a day or two early when shorting last Thursday, and now we're past those two days, I think we are now finally seeing the underlying market weakness re-emerge.

First target for Tuesday is sp'1400, a break of that opens up a swift decline to the low from last Wednesday (remember that crazy morning reversal?) @ 1385.

The big question is can we break 1385, I believe we can 'sometime' this week, but most important, is taking out the key low of sp'1343.

Until 1343 is taken out, I will not be confident of my broader outlook, which is seeking a challenge of the June low of sp'1266.

Regardless, I am confidently holding short overnight.

A little more later