Pre-Market Brief

Good morning. Futures are back to flat after overnight moderate declines. The sp +1pt, we're set to open around 1563/64. The dollar is a touch lower, as Euro rallies on a little 'Cyprus relief'. Precious metals though are a little weak, with Gold -$6 and Silver -10 cents.


sp'60min

sp'daily5

Summary

Its tough to call how we'll close today, but all things considered - not least the POMO of 4-5bn, I'd have to think we'll close at least moderately on the upside.

We have some key econ-data today, and if Mr Market likes that, we could even close in the sp'1570s.

Its week/month/quarters end, so it could be a little volatile this afternoon.
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*I'm merely looking to drop my first SLV (silver long) block ahead of the long weekend. I won't be picking up any index shorts this side of a long weekend.
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UPDATE :  GDP Q4 (final revision) 0.4%..   not exactly an inspiring number to conclude 2012, is it?

Jobless claims, 357k, although I now place very little respect for the weekly numbers.
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*awaiting Chicago PMI @ 9.45am.

Awaiting the Easter Bunny

Another day where the indexes saw a latter day recovery. For the bears, this remains a bizarrely sick and twisted market. Yet, we are probably just solidifying what is a 3-6 week top - as is often the case. Weekly charts are rolling over in momentum...but not yet in price.


sp'weekly3 - Keltner

sp'weekly2, rainbow

Summary

Just a few short notes on two of the weekly charts that I like to regularly highlight..

First, Keltner. If there is going to be a down cycle in the coming weeks, first target will be NO lower than the lower band, which is currently @ sp'1439 and rising. By mid April, this will be around 1470/75.

Second, my somewhat infamous 'rainbow' chart. Lower bollinger on here is still all the way down at 1359, but that is going to battle higher..and will be around 1425 by late April.


No hope of sub sp'1400s

The bears can NOT expect this market to be trading under sp'1400 any time soon. Its just so very unlikely..arguably near impossible. The weekly charts are all generally saying the same thing, by late April/May, the bears will be lucky to see the 1470s....perhaps the 1430/25 zone.

It really depends on how long it takes to churn out a top. If you look at the previous 3 cycle tops on the rainbow chart, we generally put in 3-6 candles before putting in a consistent close under the weekly 10MA.

My best guess from all this...we do cycle lower across April/May (not least if Q1 earnings suck), but..probably only to the sp'1470s - which interestingly, was the old resistance high from Sept'2012.


Looking ahead

Thursday will likely be more busy than today. We have some key econ-data, in particular the GDP and Chicago PMI data. If those are somewhat lousy, it'll give the market another excuse to sell off early.

The Cypriot banks open Thursday, and Mr Market is going to be keeping a close eye on any civil disturbances. I'm guessing the populace (or should that be ignorant Sheep?), will line up very politely though.

Finally, it should be recognised that Thursday is not only the end of a short week, but end of the month..and quarter. The late afternoon will probably be somewhat unstable, yet we have a large 4-5bn POMO to placate the HFT algo-bots.

That's all for today.

Goodnight from London

Daily Index Cycle update

The market opened lower, but almost immediately started to battle back upward. The main six indexes closed mixed, Trans/R2K closed higher, with the Dow/SP closing a touch lower. Near term trend looks moderately to the upside, key target remains the sp'1570s.


IWM

SP'daily5

Trans

Summary

Another very frustrating day for those bears who are still shorting the indexes. Although those using super tight stops at the open should have got kicked for at least some degree of profit. Anyway, the market indeed battled higher, and it was once again the usual 'latter day recovery'. Sure we didn't close green on the Dow or Sp'500, but it doesn't matter, does it?

Bears face a major problem across the next few days. Underlying MACD (blue bar histogram) cycle is now starting to tick higher on a number of indexes, and there is a good 2-3 days to the upside viable.

So, in the near term, we could easily be looking at a market that is crawling higher into the middle of next week.

With a long weekend ahead, there seems absolutely no point in launching any index shorts this side of the Easter break.

a little more later