Pre-Market Brief

Good morning. Futures are flat, sp' is set to open at 1640. The USD is a touch higher, and the precious metals are lower by around 1%. The smaller 15/60min index cycles are mixed. Early morning downside into the low 1630s seems likely, but then higher into Wednesday.


sp'15min

sp'60min

Summary

So, we're likely to open flat. 15min cycle would suggest we can go lower into late morning, whilst the hourly cycle is inexorably pushing higher.

I expect the 1650s to be challenged today or tomorrow, and I expect that resistance to be broken through.

Today is indeed a Tuesday, and its also a mid-sized QE of 3bn.
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*I am Long RIG - I might drop that at the open, and will look to re-long via RIG and an index later this morning.

Daily charts will likely show a turn/levelling phase by the close of today, so long as we don't make a new low... <1622.

Transports hold the 6200s

The bears managed only moderate follow through from last Friday, and it would seem the Transports has held an important line today. The weekly tranny chart is still broadly bullish for another few months. Primary upside target remains the low 7000s


Trans, weekly'3, rainbow

sp'daily3 - fib levels

Summary

The Transports came very close to breaking key support earlier today, but the daily close - a fall of just 0.03%, was a rather bullish sign.

First immediate upside target for the bulls should be the recent high in the mid 6500s. A weekly close (some time this month) >6600 will be VERY bullish, and a warning that the main market might see another 10% higher across the June-August period.

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Daily Fib' chart, extrapolating from 1622 to 1687, a 1.6x jump is offering sp'1728 or so within the next month or two. Even that might not be the high. Trans 7000s, almost certainly equates to sp'1750, perhaps the low 1800s.

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**Bonus chart, sp'15min

Something I am keeping in mind for tomorrow, perhaps we'll see a minor morning drop, 1635/25 - putting in an important 'marginally higher low', and then RAMP rest of Tuesday/early Wednesday - with ADP jobs data?


Looking ahead

There isn't much in the way of key data tomorrow, just intl.trade data, and the market never cares about that. Market will indeed be more focused on jobs data due Wed-Friday.

My plan? I am merely seeking to pick up another index (long) position, on the next 15min down cycle. If we open lower, I'll probably go long very early, probably 10-11am.

*I do think we'll get a 10% down cycle, just not yet. In the meantime, even a permabear can make some $ on the long side, yes?

Goodnight from London

Daily Index Cycle update

The main indexes saw a choppy Monday, but once again saw a latter day rally, with the sp' closing @ 1640. The bulls are just 10pts away from breaking triangle resistance, and that opens up a challenge of the Bernanke 'reversal day' high of 1687.


sp'daily5

R2K

Trans

Summary

So...the main market saw one of its usual latter day recovery ramps, and we have the sp' closing 18pts above its morning low of 1622. That's a pretty impressive close, but the bulls should be seeking a Tue/Wednesday close in the 1650s.

I have to guess, they'll surely get it, if not even the 1660/70s by the Friday close.
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However, there is a significant chance we'll be (briefly) trading in the 1620s again early tomorrow, but even if we do, the bulls will very likely be stronger than today.

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*I am largely on the sidelines, seeking to pick up an index (long) block early Tuesday.

a little more later...