Pre-Market Brief

Good morning. Futures are somewhat lower, sp -11pts, we're set to open around 1563. Notable mover is the USD, +0.5%. This is helping to pressure the metals (again)..and Oil. Bears need to break under yesterday mornings low of 1559, that will open up the 1540s later today.


sp'60min

sp'daily5

Summary

So, we're likely to open in the low 1560s..after yesterday afternoons late mini ramp. Indeed, the market likes to mess with the minds of as many as it can.
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I hold to the original count. If we are seeing a sub'5 play out, it likely will be concluded today, somewhere under the wave'3 (Monday) low of 1552.

One particularly thing to look for is a lower high on the VIX. I don't expect 17s, even if we break into the sp'1540s. VIX...has its quirks.

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*I remain heavy short from yesterday, seeking an exit in the sp'1545/40 zone, with VIX in the low 16s. I still expect upside pressure into Friday opex.
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updates across the day!

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8.50am... Gold flipped from negative to +$18 just earlier. No idea why, but this sort of volatility..to be expected.

Bears need to see sp -17pts to conclusively take out yesterdays low. Its kinda important we do that early on.

9.38am...well, we're under yesterdays low....

seeking the 1540s...

9.42am...I have a tight stop in place, if i get the kick..so be it. I'm just annoyed my entry was not so great yesterday.

Sp' 1557s...so..1540s look feasible.
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*I have exited @ sp'1559, minor gain...after concerns with the VIX.

Weekly charts still rolling over

Despite today's sharp rebound, the US equity indexes are still rolling over on the bigger weekly charts. The sp' is currently lower by just 0.9% this week, but there is still plenty of time to close the week under the important 10MA @ 1550. Mid-term primary target remains the 1480/70s.


sp'weekly

sp'weekly2, rainbow

sp'daily5a - H/S formation idea

Summary

So...today opened as expected - with a gap higher, but it sure didn't end with the weakness I was seeking. Indeed, the close was pretty bullish, and with the VIX back in the 13s, the bulls must be pretty pleased with themselves after Mondays surprise routing.

Yet, despite today's ramp higher, the weekly charts ARE still rolling lower. Underlying MACD (blue/green bar histograms) are ticking lower, and we're due to go negative cycle within the next 3-8 trading days.


Looking ahead

The only major things tomorrow are further earnings reports, and there the Fed 'beige book' at 2pm. Of course the market could use that as a further excuse to ramp, if a weak outlook means the QE will continue.

Tomorrow will be important from a chartist perspective. We must not trade over sp'1580, or it will really mess up the micro-count. If however we can break into the 1550s by late tomorrow, that would offer the opportunity for a further brief gap lower on Thursday into the 1540s - where I am still guessing we'll then see a push back upward..into Friday opex.

*I remain short from early Tuesday, and seeking an exit in the sp'1540s, with VIX 16s.

Goodnight from London

Daily Index Cycle update

The main indexes saw a sharp swing back upward. The two leading indexes - Transports and R2K, closed 2.2 and 1.7% higher respectively. The sp' closed +1.4%, around the important 1573/75 zone. Near term trend is now indeed somewhat mixed and uncertain.


IWM

SP'daily5

Trans

Summary

I had expected an opening gain of maybe 10pts on the sp', so when we opened in the low 1560s, this was certainly no surprise. Indeed, we got stuck early on @ 1566, but the latter day ramp into the mid 1570s was a real disappointment.

The SP' closed below what is the critical level of 1580. That is where the assumed sub'1 wave floor is - which the current count should not breach above for a sub'4.

Ideally, we should still get a sub'5 lower into the sp'1540s, but that's now a good 25pts lower, which is perhaps too far for a final fifth wave to go.


A little confusion

Near term then, I have to note I am now somewhat uncertain. The weekly charts ARE rolling over, and we're certainly seeing much higher day to day volatility. Yet, we're now just 22pts shy of last Thursdays 1597 high.

Absolute worse case for the bears would be a daily/weekly close >1597, at which point it would again be 'white flag' waving time.

It remains a market that is rarely 'easy'.

a little more later...