Pre-Market Brief

Good morning. Futures are moderately lower, sp -6pts, we're set to open @ 1644. Bears should be seeking to take out yesterdays low of 1636, that will open up the target zone of 1630/25 by late afternoon, and should equate to VIX 16.


sp'60min

vix'60min

Summary

So, we're set to open somewhat lower, certainly too dramatic, but neither is it higher!

With no QE today, bears have a window of opportunity to whack this market lower. I think there is a pretty good chance of 1630/25, which for me would merit an exit, and sit on the sidelines across the long weekend.

Those bears thinking the decline will continue much of next week, should review the Feds POMO schedule, which has very large QE next Wed' and Friday. Bears beware!
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*I am heavy short the indexes, seeking an exit into the Friday close, preferably sp'1630/25

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Durable Goods Orders come in better than expected, 3.3%, vs 1.1 expected, market rallies a few pts on it, sp' -5, 1645.

I just have to wonder, is today going to be an early minor drop and another wave to 1660 (key fib level)...or are we just going to keep falling across the day?
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Oscar video...



As ever...holiday reversal, and he will be going massively bullish next week

Everything is primed for the bears

The bears have everything set up in their favour to conclude the week. Both the 15/60min smaller cycles are arguably reset, the daily momentum is increasingly swinging toward the bears, and there is no QE this Friday. Primary target is sp'1625, secondary is 1600.


sp'60min

sp'daily5

sp'daily3 - fib levels

Summary

Its been a long day, so I'll keep this short.

Suffice to say...bears have NO excuses for Friday. The price action today was very much one of a natural wave'2 bounce, and now we're due some degree of downside - arguably equal to that of Wednesday/early Thursday.

I see little reason why the bears can't at least break the market down to sp'1630/25, but if the market gets a little rattled, there is a small chance that the big 1600/1597 zone might be tested late Friday afternoon.


Looking ahead

There is Durable Goods Orders data in pre-market, market is looking for 1.1%, so anything on the negative side should give the bears something to begin the day.

With Monday being closed for Memorial day, things could get a little quiet in the latter part of the day, but with no QE-pomo, bears should be generally okay going into the Friday close.

*I am heavy short the indexes, via IWM, now I wait, along with a fair few others!

Goodnight from London

Daily Index Cycle update

The main indexes opened lower by around 1%, but most closed broadly flat. The Trans and R2K both closed +0.2%, whilst the sp' closed @ 1650, a fall of 0.3%. It is highly arguable that today was merely a wave'2 bounce, and that a very strong wave'3 down is due to end the week.


R2K

Sp'daily5

Trans

Summary

Well, that was certainly an interesting day. The bears opened everything lower, but as expected, the market rallied across the day. No doubt this was partly due to a QE of 3-4bn, but it was also a natural bounce.

The smaller 15/60min cycles are probably now reset, and there is great potential downside across ALL of Friday.

It is important to keep in mind that if wave'1 was 50pts, if you take 50pts off today's high of sp'1655, that gives us 1605. That would make for a superb way to end the week, but yes, that is probably being too optimistic..or should that be pessimistic ;) ?

Despite the bounce, underlying MACD (blue bar histogram) momentum is increasingly swinging to the bears, and we are due to go negative cycle at the Friday open, and get some bearish crosses on many of the indicators.

Everything is primed for those on the bearish side. With no QE tomorrow, it is going to be fascinating to see how we close the week.

a little more later..