Good morning. The main indexes are moderately higher. VIX is noticeably lower, -11% in the 12s. USD is somewhat lower. Oil jumps higher at the open, with the metals still looking a little weak.
sp'60min
vix'60min
Summary
Things are looking on track.
If this mornings opening gains hold..and build across the day, then the bulls should have a fair chance at spiking into the sp'1570s by the close/early Thursday.
At that level, I'll be seeking to take significant index shorts/long VIX.
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The market - and mainstream media, has been strangely concerned that QE will end 'sometime soon'. It seems very likely that the FOMC announcement tomorrow will reaffirm that the Fed will continue to throw 85bn a month at the financial markets for many months..if not.. years to come.
sp'daily7 - fib levels
sp'weekly
VIX'weekly
Summary
Near term price action remains a bit choppy. I still think there is a fair possibility of putting in one final marginally higher high. The sp'1580s now seem out of range, but the 1570s look viable on a crazy 'QE inspired' spike.
VIX weekly chart is set up very nicely for the doomer bears. First primary target would be the 200 weekly MA @ VIX 20/21. A weekly close above that level would bode for 30/40s, but I don't expect that for months..if at all this year.
Looking ahead to the 'Fed day'
Wednesday afternoon will indeed be a major market event.
The Fed will issue their primary press release on interest rates/policy @ 2pm. There will also be an economic outlook report, and (I believe) the Ben Bernanke will appear to do one of his periodic press conferences around 2.15pm.
I think its fair to assume the Fed will be looking to placate the markets mild concern that QE might actually end this year.
If the Bernanke can convince the market that QE will continue into 2014, then we have a very significant chance of seeing the indexes jump into the 1560s..even the 1570s by the close. That would make for a nice cyclical peak.
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In terms of price action, trying to trade Wednesday is arguably a major 'no no'.
*I'm holding a small block of USO (long Oil), seeking an exit early Wednesday, and aim to then sit back, and see how the market trades..I do not intend to take any major new positions.
On any basis, I think the more conservative bears should be looking to re-short the indexes/long VIX no earlier than Thursday morning, after the FOMC induced price swings are out of the way.
Fed days are pretty dynamic and exciting, so updates will be even more frequent tomorrow. Be sure to check in often!
The main indexes failed to hold opening gains, and we saw some moderate declines by late morning. Yet the usual latter day recovery did appear, and the main indexes closed with only very minor declines of around 0.2%. Near term trend looks weak.
IWM
SP'daily5
Trans
Summary
Today was a lot more volatile than I had expected. No doubt, a lot of it was due to the ongoing developments - or should that be 'Cypriot tragedy?', but there is clearly some underlying weakness on top of that.
Key rising support - by end of March, is sp'1520. I'd certainly guess we'll break that lower channel within the early part of April, which should open up the primary target of the 1470s.
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The weekly charts are looking increasingly weak, and even if we close this week with just these moderate declines, it'd be the first real warning of downside trouble for April/May.
