Pre-Market Brief

Good morning. Futures are somewhat higher, sp +11pts, we're set to open @ 1584. Precious metals and Oil similarly look set for moderate gains. USD is a touch weaker. If the morning econ-data comes in at least 'reasonable' bulls look set to rally across the day.


sp'60min

vix'60min

Summary

We do have a lot of econ-data to get through between now and 10am, so the market could easily swing back negative..but I don't think so.

My best guess is that the market will rally for most of today, and possibly into early tomorrow.

The only issue is how high. There is the big 1620/25 gap area, but I just find that out of range now. I think bulls will be lucky just to get the 1595/1605 area.

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*I am entirely on the sidelines, and seeking a full re-short of this market. I will be keeping a close eye on the hourly charts, and looking for the VIX to gap-fill the 17.25/16.75 area.

It is possible this bounce will continue into early Wednesday, so some patience may be required!

Good wishes for Tuesday!

Primary target is currently sp'1495

Another lousy day for the bulls, and with the break of the up channel last week, the bears remain firmly in control. A near term equity bounce seems very viable, but the trend is broadly on the downside. Primary target remains the lower weekly bollinger, currently @ sp'1495, but rising.


sp'weekly7 - near term count'1

US 10 yr, yield, monthly'2

Summary

Well, another victory for the bears, and the weekly'7 count/outlook remains on schedule. Based on a number of the recent multi-week down cycles, the obvious target (in my view) remains the lower weekly bollinger, which is currently sp'1495 - but which is rising each week.

By next week, the weekly bol' will be around 1505/10, which is interestingly where the 200 day MA is also lurking.


10 year yields above 3%, by early next week?

I have added a very simple 10yr Tbond yield chart. Many out there recognise the importance of the 2.75 level. If that is broken at ANY time, then we could spike >3%, perhaps 3.20/40s. That would easily be enough to whack this market down to sp'1500.


Best guess....sp'60min'3

I have to think we're due some kind of continued bounce, and that today's upside action was perhaps the first 30/50%. It will be difficult to clear sp'1600 again, but if the market does, then 1615/25 would be the target re-short zone.


Looking ahead

There is a VERY large array of econ-data tomorrow morning. If some of it comes in 'reasonable' the market will likely use it as an excuse to ramp into the 1590s..possibly even higher. Perhaps most important, we have durable goods orders (8.30am), and consumer confidence (10am).

*there is no significant QE tomorrow. Next major POMO is Wed' and Thursday.
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**Bonus chart...

Copper, monthly'2, with fibs

Even though we closed in the 3s, the earlier break to 2.99 was very important. The door is now open to the low 2s, That is viable within a few weeks, although it could take a few months. Regardless, it is a very bearish chart, and bodes badly for Gold/Silver, and the entire mining sector.

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I'm on the sidelines overnight, and am merely seeking an equity bounce, and will look to short this market down to sp'1550/30, but possibly as low as 1510/00 by early next week.

What is clear, if we hit the lower weekly bollinger, I'm going all out long. So much for the 'permabear' eh?

Goodnight from London

Daily Index Cycle update

The main indexes saw renewed significant weakness, including an especially weak closing hour. The sp' closed -1.2% @ 1573, with the Trans -2.0% @ 5990. Hourly charts are offering a brief bounce, but primary downside remains the low 1500s, where the 200 day MA is lurking.


sp'daily5

R2K

Trans

Summary

This mornings down open was not what I was expecting. Indeed, the hourly charts were looking pretty positive at the Friday close.

Yet, with overnight weakness in Asia, and the 10yr yield spiking into the 2.60s, the market was again getting upset.
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We have some very serious breaks on the daily charts, and there is pretty obvious downside to around 900 on the R2K, sp'1510/00, and 5600s on the Trans.

*I am merely seeking a reasonable bounce, and then to launch a major short. Best bear case downside is the lower weekly bollinger, currently @ 1495..but that target is rising each day.

a little more later...