Pre-Market Brief

Good morning.  Futures are somewhat lower, sp-8pts, we're set to open around 1646. Bears need a break <1640, and then quickly <1635. However, with huge QE of 5-6bn today, bears face massive resistance. USD is moderately higher.


sp'15min

vix'60min

Summary

All things considered, I don't think the bears can break back into the 1630s.

There is important econ-data this morning - the PMI number at 9.45am will be a market mover, look for the market to especially move at 9.40am - when a number of people receive the data prior to main market.

So..my best guess for today - market sells off to around 10.30/11am, but holds sp'1642/40, as best seen on the 15min cycle chart.

*look for an opening black/fail candle on the VIX.

However, I will note the MACD cycle on the VIX offers a broad VIX rise across the ENTIRE day. Arguably, that is the most bearish possibility right now.

--
*I am heavy short the indexes, and will seek an exit at the open.

I do not intend to go long today, but will consider trading long (probably via Oil) next Monday instead.
--

Update from Permabull...Mr Carboni...



--
tis the last day of the week..and month.   Updates across the day.


UPDATE 9.33am... exiting short positions...

Net declines for the week?

In this shortened trading week, the sp' is currently holding net weekly gains of just 4.8pts. Certainly, it won't take much to close the week red, but with a very large QE of 5-6bn to close the week...and month, the bears are still facing what remains an incessant Fed problem.


sp'weekly

sp'weekly2, rainbow

Summary

So, can we close the week at least moderately red? Hourly index charts did rollover in the closing hour today, and the daily charts are still in a bearish state, yet, the damn Fed is going to be throwing 5-6bn of QE at the market tomorrow.

Primary weekly trend is unquestionably still bullish, but perhaps the 1687 'Bernanke reversal day' is at least a mid-term high. Obvious downside target is the lower bollinger band, which is currently 1459, but still broadly rising.

Many out there seem to be seeking the sp'1550s or so, and I can kinda understand that, but it will be exceptionally difficult whilst QE continues.
--

Final chart to end the trading day...

Nikkei, monthly, 20yr

As noted last night, I was looking for the candle to turn red, and indeed we now have an extremely bearish spiky candle, with just one trading day of the month left. First downside target is 12k, which is a good 10% lower!


Looking ahead

There is the QE tomorrow at 10am of course, but there is also some econ-data. Most notable is the Chicago PMI number at 9.45am. Market is looking for 50, equity bears should be seeking anything <49.

--
*I am heavy short the indexes, but seeking an early morning Friday exit

Goodnight from London

Daily Index Cycle update

The main indexes all closed moderately higher, with the sp +6pts @ 1654 - after being stuck around 1660 for almost the entire day. The market was weak in the closing hour, with the transports closing just 0.2% higher. VIX confirmed the moderate equity gains.


R2K

SP'daily5

Trans

Summary

A pretty dull day of nothing. After the opening gains settled around 1660 by mid morning, the indexes effectively flat lined until 3pm. There was then a slightly interesting little closing hour weakness, but still, we are 20pts away from taking out the double floor of 1635.

Despite the moderate gains, the underlying MACD (blue bar histogram) cycle ticked lower again, and price momentum is STILL increasingly swinging in favour of the bears.

The primary near term target zone is sp'1630/25, although many chartists are still seeking 1600/1597. I personally find the latter price target very unlikely in this down cycle.

a little more later...