A quiet day in market land. Everyone seems resigned to another 1-2% higher in the sp'500 to 1550/60, before there is the opportunity of a moderate wave lower. As ever, even if there is a down wave this spring, I would have to assume the market will merely put in yet another higher low.
sp'daily7 - fib levels
USD - daily
USD, weekly
Summary
Both the daily and monthly fib charts suggest sp'1550/60s as a very valid target for this cycle. The monthly upper bollinger is now offering 1570s.
One thing in the bulls favour though is the USD. Now, the trend is clearly UP - which is bearish for equities, but we're arguably overbought. USD could easily cycle lower for a week or two.
Perhaps the market will put in a choppy top lasting into the second half of March..before seeing the a wave lower?
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New chart... sp'weekly4, rainbow
The chart above is part of a hyper-bullish scenario that I am trying to keep in mind. I've actually seen the same kinda outlook mentioned by a few others lately.
The key issue I would like to highlight is the next wave lower. On any basis, the most natural target would be the lower bollinger band (weekly cycle) - which itself will be turning upward in the next week or two.
By April/early May, we're probably looking at the market getting stuck around 1425/00, that remains my best guess. On any basis, we'll then likely cycle back higher again..perhaps completing a larger wave'3 (blue) around August/Sept' in the mid 1600s
At this point though..its merely 'academic interest'. First...we'll need to see if the market can break under the lower channel (see daily charts), which by end March is sp'1520)
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Regardless of all the other variables out there - such as Merkel getting the kick this Autumn, until the Fed end the QE-POMO, I find it difficult to imagine this market seeing a sequence of down cycles into 2014.
Looking ahead
Friday will be all about what the headline jobs data is. Anything >180k is very likely to satisfy the bull maniacs, and would offer a potential gap right into the mid 1550s, even 1560s.
Regardless of price action tomorrow, I won't be shorting into the weekend, no point, not least for the option players.
That's all for today!
Goodnight from London
