Daily Index Cycle update

The main indexes melted higher across the day, and closed the week pretty bullish. The two leaders - Transports and R2K, both closed around 1% higher. With the Dow @ 14000, and the SP @ 1515, the US market remains on a very bullish upward trend.


Dow

Sp'daily5

Trans

Summary

It looks like the market makers may have been playing some clever games this afternoon, pinning the Dow to destroy as many of the weekly option positions as possible. Dow 14000, I'm sure they are very pleased with themselves this Friday evening.
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There is little else to be said.

It was a somewhat compressed week, the Tuesday highs really capitulated a few. The two day reversal was somewhat impressive, yet..Fridays action negated half of the declines.

I realise some would merely say its a 50% fib retracement of the first wave lower, and I can understand that outlook.

Yet even if we do somehow see a further down wave next week, into the sp'1490/80s, I have near zero doubt we'll be breaking sharply higher in March..and probably April too.

A little more later...on what was a marker day for this site.

Volatility ends the week on a downer

With the main indexes melting back higher across Friday, the VIX naturally responded by slipping lower. The VIX closed -6.9%, settling @ 14.17. This was the highest weekly close since late December.


VIX'60min

VIX'daily3

VIX'weekly

Summary

Not much to add..suffice to say, VIX did break into the 16s on Thursday morning - with sp'1497.

Whether the market can see a further equity wave lower next week, to around sp'1490/80 - with VIX 17/18s, that is now the minor curiosity.

I say curiosity, since the broader picture is absolutely still bullish, not least whilst the Feds POMO program continues.

A little more later..on the indexes.

Closing Brief

A pretty lousy end to the week for the bears, with most indexes closing moderately higher. We're a mere 1% away from the recent index highs. It has to be said, that anyone touting significant declines (<sp'1470) in the immediate term are out of their minds.


sp'60min

Summary

It looks like the few hours of intra-day churn was merely about forming a baby bull flag..and that was confirmed to some extent in the closing hour.

Baring a move under the Thursday low of 1497, the trend is clearly back on the bullish side.
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Next week will be all about the Bernanke.. If he is careful with his words, Mr Market should merely continue to melt higher. At worse..a brief decline to 1490/80.......and then 1550s..if not considerably higher.
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No hope of major declines until May, and even then..just how the hell are we going to decline whilst POMO continues?
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Have a good weekend

*next main post..late Saturday, probably on the US weekly cycles (again!).