Pre-Market Brief

Good morning. Futures are battling a little higher, sp +6pts, we're set to open around 1654. Bears need to keep any morning rally under 1660. There is an array of econ-data this morning, so Mr Market has a lot to deal with. Metals are showing a little strength, with Gold +$3


sp'60min''2 - H/S formation idea

vix'60min

Summary

A long day ahead, lets see if the bears can keep this contained, with a break <1640 later this afternoon.

*I am short the indexes, seeking an exit in the sp'1630/25 zone.
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Near term trend remains weak

Despite yet another latter day recovery, the market closed moderately lower. There is still a distinct weakness out there, and bears probably have another few days of opportunity. Primary downside target remains sp'1630/25, secondary is also unchanged @ 1600/1597.


sp'60min - H/S formation idea

sp'daily3 - fib levels

Summary

Its been a long day, so I'll keep this short. Daily charts remain generally bearish.

I'm wondering if the recent few days of chop is just building a H/S formation, with the RS peak around sp'1655/60. Hard to know, and its just an idea anyway.

Bears need to take out that double low of sp'1635, and that should open up a further 5/10pts to the downside, with VIX in the 16s.


Looking ahead

There is quite a bit of econ-data tomorrow. We have the gas/oil reports, there is also GDP, jobs data, home sales, and corporate profits. That is plenty for Mr Market to be dealing with.

There is no significant QE for Thursday, so bears arguably have more chance of consistent downside. I realise many would disagree with that theory though.
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Bonus chart!

Okay, here is something to close the trading day...

Japan, Nikkei, monthly, 20yr

Equity bears should be seeking a May close <13800, which would make for a marginally red candle. However, the current monthly candle certainly is already spiky, and a reasonable sign that the Nikkei might at least be maxed out for the early summer.
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*I am holding minor-short the indexes overnight, seeking an exit in the sp'1630/25 area, no later than early Friday.

Goodnight from London

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Video bonus, from Biderman



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Update 10.50pm (EST), Nikkei is down almost 400pts, and indeed, might close the month with a huge monster red spiky candle. First downside target is the old breakout level of 12k.

Daily Index Cycle update

The main indexes all closed moderately lower, and that was somewhat above their 11am lows. The sp' close of 1648 was a fall of 0.7%, and its notable that the bears should now be somewhat desperate to break the double floor low of 1635. Near term trend remains weak.


Sp'daily5

Summary

So...a bit of a tricky day in market land. We saw opening moderate declines that built until 11am, to be followed by almost 5 hours of the market battling back higher.

There was a touch of weakness in the closing 15 minutes, and its very possible that was the start of the next major wave lower - across Thursday, and even into early Friday.

Best guess is that sp' will floor in the 1630/25 area this Friday.

I do realise though, there are plenty out there who are seeking somewhat lower levels, with a gap-fill of 1597. In my view the bears have a window until late Friday morning. After that, there is a very large QE of 5-6bn, along with a lot of end-month trading issues to settle.

a little more later...