Pre-Market Brief

Good morning. Futures are moderately higher, sp+6pts, we're set to open @ 1584. The USD is significantly weaker, -0.7%, and this is no doubt helping to take the lid off precious metals which are over 1.25% higher. Oil is set to open flat.


sp'60min

vix'60min

Summary

So, we're set to open higher (yet again), and I can understand if some of the bears are now really getting rattled, and wondering if a new cycle high >1597 is about to be put in place.

Arguably, the bears need to see a STRONG intra-day reversal today, with a close in the sp'1560s. That is possible, but I realise to many that now looks improbable.
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We shall see.

*awaiting weekly jobs data from the dept of lies.... 339k  vs 350 exp.

Isn't it great that everyone in the USA is employed now, along with all of those in southern Europe.
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9.22am... I'm not sure why, but Oil just snapped lower, from +0.2% to -0.5%.  Sp' still set to open in the mid 1580s.. a mere 10-12pts away from breaking the April'11 high.

9.34am...indexes UP... VIX...holding flat.

I think the VIX is the tell.

Baring a ramp across the morning, I'm still holding to the original outlook. 


9.40am... Is the CBOE even open ? I mean, the VIX is utterly flat...problem with the VIX quotes?

Falling into the weekend?

The US equity market closed rather mixed. The hourly index charts offer general downside into the weekend. An equity rollover at this point would be highly suggestive that a sub wave'3 is underway, which would probably equate to sp<1500 and VIX back in the 20s.


sp'weekly

sp'daily5b

Summary

It turned out to be a bit of a quiet day. The little doji candle on the sp' daily chart appropriately summarises the day. Perhaps it does indeed signal a 'minor chop' top..and Thursday will see day'1 down of the next wave.

Bears should be seeking a weekly close under the 10MA - currently @ 1554. That's only 1.5% lower across the next two trading days, so its easily viable. So long as the recent high of 1597 is not taken out, I will hold to the original outlook.

As for the 'best guess', well, we'll know soon enough if that needs to be trashed, or has any chance of occurring. Bears need to take out last weeks 1536 low, and proceed at least down into the 1490/80 zone. A few weeks bounce into mid May, and then something special ?


Oil, also ready to rollover?

I'll close tonight with two charts on Oil - via the ETF of USO. Oil has seen a significant bounce back into the low 90s - as I was expecting. The only issue now is when will it get stuck, and rollover.


USO'60min

USO, daily2

Primary downside target -as based on weekly charts in May is 28/27, which would be suggestive that WTIC will break <80. That is quiet a bold outlook, so, it will be interesting if it turns out to be right. Certainly, Oil back in the $70s would surely mean the equity market is back in the mid/low sp'1400s.

*I'm not short USO right now, but probably will be within the next few days.
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I am heavy short the indexes, looking to exit late Friday..on the next VIX daily spike, 17+

Goodnight from London
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VIdeo bonus to end the day...from Oscar

Daily Index Cycle update

The main indexes closed somewhat mixed. The Dow -0.3%, the sp' flat, with the Trans and R2K rising by around 0.5%. Near term trend suggest further upside, but if last week was a key cyclical top, then the current wave higher should be ending at this time. The market remains utterly complacent.


IWM

SP

Trans

Summary

Many of the index charts are still broadly offering potential H/S formations. Of course, we won't have that confirmed until the neckline is broken below, which for the sp' is the recent 1536 low.

Best guess remains that sp'1597 was a key cyclical multi-month top. In particular, the power of the VIX last week in my view is good evidence that 'something has changed' since the last intermediate low last December.

It is difficult to ascertain how we might open Thursday, perhaps there will be brief opening gains, but latter day weakness?

More than anything, the hourly charts are highly suggestive that the bears have a chance at knocking the market lower, all the way into the Friday close.

a little more later...