Pre-Market Brief

Good morning. Futures are sp -4pts, we're set to open around 1628, a mere 6pts above the key low. Equity bulls have a real problem if the market breaks 1622, that opens a further fall down to 1600/1597 gap zone. USD is lower, with metals and Oil moderately higher.


sp'60min

vix'60min

Summary

Well, this is not the type of open the bulls were looking for. We are going to open real close to key support, and it sure won't take much to break it.

ADP jobs data came in significantly lower than expected, 135k vs 171 exp.

There is an array of other data due this morning, so, market will plenty of reason to move.
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*I am heavy long, and seeking an exit in the sp'1650s, but that sure looks off the table for today. In fact, even a close in the 1640s now looks difficult.

As it is, the hourly index/VIX charts do suggest the bulls still have the upper hand, but they need to clear the triangle resistance, which by the end of today will be @ 1640.

A long day ahead.
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Awaiting another wave higher

The main indexes closed lower by 0.5%, but bulls managed to achieve a marginally higher low. If the sp' can break >1645 this Wednesday (a mere 0.9% higher), then the door is open to the 1650/60s, and then the 1700s will be within easy reach by the latter part of June.


sp'60min

sp'daily5

sp'weekly

Summary

We saw some good volatility again in the market today. Surely the day-traders - those few 'real people' who are left, had some good price action to try and capture?

I expected an intra-day pull back, and indeed it looked as though sp'1634 was the low, but no...Mr Market whacked the market another micro-wave lower, and came within a point of taking out the Monday low.

Had that low failed to hold, we'd probably be looking at the sp'1600s tomorrow.
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Yet..it did hold, and baring some bizarre overnight gap down, the market looks set for much higher levels tomorrow. The hourly index charts are offering a good 4-6 hours on the upside, and that should at least offer the chance of sp'1645, if not the mid 1650s.

The fact the VIX put in a marginally lower high, is further good support for the near term bullish outlook.

Whether we can break above the Bernanke 'reversal day' high of sp'1687, that is another matter entirely. Right now, that is too hard to guess. Lets first see if we can trade into the 1650s, and if Mr Market can achieve a daily close at that level.


Looking ahead

We have ADP jobs data in pre-market, so look for the market to ramp on that. There is also ISM, factory orders, productivity/costs, and the EIA oil report. Further, there is the Fed Beige book at 2pm. That will be plenty enough for the market to deal with.

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*I am heavy long, seeking an exit in the sp'1650s.

Goodnight from London

Daily Index Cycle update

The main indexes saw some general weakness as the day progressed, and the sp' came within a point of taking out the Monday low. Yet, the market did put in what is probably an important 'marginally higher low', and that sets up much higher levels. First target is the sp'1650/55 zone.


sp'daily5

Trans

Summary

A pretty interesting day to be part of...and trade.

The bulls managed to kick the market back up from the danger zone in the closing 90 minutes. The close of sp'1631 is certainly not a 'great victory' for those on the long side, but it is a good 8pts above the daily low.

Transports saw a similar fall of 0.5%, and again its important to note, the tranny is still able to hold the important 6200s, closing @ 6257.
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Bulls should be keep in mind, if the bears can somehow overnight gap the market <1620, Transports will likely lose the 6200s, and that has rather big implications for the mid-term outlook. As ever, one day at a time.

Considering the hourly index charts though, and the marginally higher low, I'm guessing the market has a very reasonable chance of breaking into the important sp'1650s by late tomorrow/early Thursday.

a little more later