10am update - morning weakness

Good morning. Today should at least bit a little more dynamic in terms of price action. Perhaps we might even fall 0.5%..at some point. Ohh..the drama! Dollar is a touch weaker, along with the metals...with VIX 1-2% higher. Overall though, its still kinda muted action.


sp'daily5

vix'daily3

Summary

It feels like we're stuck..but really...nothing has changed. There is no reason to believe the rally is ending.

With his highness due to speak later anyway, would they ever let this market stay red for more than 30 minutes?

*stopped out of my SLV short position in the opening 20mins. Might go back in later...not sure yet. 
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back 12pm

Dollar trying to break higher

The US dollar index is just 69bps away from the important 81.0 level. A weekly close in the 81s would be a major recovery from a three month decline, and at least become 'some' amount of downward pressure on US equities.


USD, weekly

SP' weekly

Summary

Just a brief update on the USD and the weekly index cycle.

First, its important to note the MACD (blue bar histogram) cycle which is now positive for the first time since last July. The USD 81s are indeed important, but dollar bulls should be seeking 81.60..and higher - breaking back above the November high.

If we see 82s at any point, the door opens to a considerable multi-month ramp, at least to the 83/84 level.

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As things are, the weekly MACD cycle on the US indexes is looking kinda toppy, but there is major support at the old resistance/high of 1474.

Best near term bear case remains, a minor retracement down to the sp'1470/60s, with a minor spike in the VIX to 16/18.

Finally, an interesting post on Gary Shilling @ arabianmoney.net. 

Were the fed 'pomo' program to end this summer/autumn, I would again be open to a massive down cycle. Yet...the notion that the fed are ever going to end what was acknowledged by many as 'QE-without end' I find almost impossible to believe.

Goodnight from London

Daily Index Cycle update

A very quiet Monday for the US market, with the main indexes closing largely flat.There is simply no sign of the broad upward trend ending. Even a move down to the sp'1470/60s would do no damage to what remains a powerful multi-month move higher from the post election low of 1343.


IWM

SP

Trans

Summary

A pretty dull Monday, but then...aren't they usually that way?

There is little to be said, other than the primary trend remains UP.

What should make the bears thoroughly despondent right now is that the underlying MACD (blue bar histogram) cycle on the daily charts is already negative.and looks like it could be flooring!

There is the very real possibility of a 7-10 day up cycle to begin as the week progresses.

*huge POMO of 5-6bn this coming Thursday, and it will be interesting to see if this Valentines is indeed a massacre for those on the short side.

A little more later