Pre-Market Brief

Good morning. Futures are slightly higher, sp +2pts, we're set to open around 1459/60. For those bears seeking a retracement lower, it will be important to break <1450 later today. The dollar is 0.25% higher, but remains below the important 81s.


sp'60min4 - retracement levels

sp'daily5

Summary

Well, nothing remotely interesting overnight, and we're going to open within 0.5% of the recent highs.

Considering the VIX is so low, and  hasn't even bounced back to the lower end of the 16-18 gap level, I'm still seeking a move to at least the low 1440s. Even 1425 is still easily within range by the end of this week.

I am short from 1457, seeking an exit @ 1445/40 later today/early Thursday. I will be somewhat disappointed if the market does a moon trip >1467 within the next day or two.
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WTIC Oil - mixed outlook for 2013

Whilst the US equity markets are still close to their post 2009 highs, WTIC Oil is well below the April 2011 high of $114, closing today @ $93. The near term outlook appears moderately bearish, but the monthly Oil charts have now flipped to bullish. A break above the big $100 this spring/summer would be pretty decisive.


WTIC Oil, daily

WTIC Oil, weekly

WTIC Oil, monthly2, rainbow

Summary

In the very near term, it does look like WTIC Oil will slip at least a few dollars lower. First target would be the 200 day MA @ $91.85. That could easily fail though, and open up the $90 level.

All things considered, it will be difficult for WTIC to break much below 89/88, not least if the main equity market holds above the key December low of sp'1398.


Bigger charts..bullish.

The fact we now have the monthly rainbow charts sporting a bullish green candle should not be too surprising, since we had both the Nov/Dec candles- blue, giving a provisional warning of a turn back to the upside.

The big psychological level of $100 will obviously be massive resistance. A weekly/monthly close >$100 would be very bullish into the spring/summer.

As always, the Oil price will be subject to changes in the US Dollar, and with annual QE of 1 trillion, there is obviously some inflationary upward pressure to ALL asset classes.
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*I am short the sp' from 1457, seeking an initial exit around 1445/40.

Goodnight from London

Daily Index Cycle update

The main indexes closed lower for a second day, and despite the declines being very slight, we now have clear rollovers on many of the daily charts. The key downside target zone is sp'1440/25. It would seem very unlikely we'll go below 1420/15 any time soon.


Dow

SP

Trans

Summary

So, a second day lower for the equity market, and the daily charts are displaying a pretty obvious gentle rollover. Certainly, its nothing dramatic yet, and its easily possible we won't get any major down days in this new cycle. A few more days of sp -5/10pts a day could be all that we're going to see.

The important 50 day MA will be around 1420 by the end of this week, and my best guess is that we won't be going anywhere under that.

A brief spike in the VIX into the low 16s seems likely, and that would probably equate to sp'1435/25 later this week.
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*I am short from sp'1457, seeking an initial exit around 1445/40, perhaps as early as tomorrow.

A little more later