Pre-Market Brief

Good morning. Futures are flat, we're set to open around sp'1613. With no QE today, the bears should have a better chance of ending the current rally. Bears should seek a weekly close back under sp'1600, bulls should be content with anything >1600..


sp'60min

vix'60min

Summary

*PMI number:, due @ 9.45am
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Well, its the end of the week, month, quarter, and indeed, first half of the year.

The bulls are still unquestionably in control of the main market, but if the bears can close this market back under <1600, I'll still very much be open to a hit of the original primary target, currently @ sp'1497 (but rising to 1510s next week).

Hourly index/VIX cycles suggest market weakness, especially in the latter part of today, and that should carry through into Monday.

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Oscar posted a new video, but frankly, I'm not in the mood for  watching it. However, for those that do...



...awaiting the PMI number.

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9.16am.. Futures have swung moderately lower, sp-4/5pts,

It will get interesting if the PMI comes in <53, and if that will be enough to tip the sp' <1600.

Frankly, as an options trader, I want OUT ahead of the weekend, but the hourly charts are suggesting weakness on Monday.  Hmmm


9.35am..Everything rolling over...bears have a real chance here!

Hourly charts suggest the stronger downside in the second half of the day.

9.45am PMI:  51.6 ....a clear miss.

Bears should seek weekly close under sp'1600

Despite the recent weakness, its been another quarter for the bulls, with the sp' rising from 1569 to hitting a new peak of 1687 on May'22. For the permabulls out there, a Friday close in the mid sp'1620s would be the ultimate way to end the week, month..and quarter.


sp'weekly7

VIX, weekly

Summary

Its been a tiresome day, so this will be somewhat short.

In order to get the weekly candle back to red, bears need to close Friday <sp'1603 (approx).

On any basis, if the bulls close >1625, I will be VERY concerned that next week will be equally bullish.

So..bears need <1603...preferably sub 1600...and bulls should be seeking >1625, although frankly, they should consider anything >1600 a bonus, considering market was trading 1560 on Monday.

Equity bears should also be seeking signs of some power in the VIX, a weekly close in the low 18s would still be a net decline on the week, but it would at least open up the 20s again for Mon-Wed'.


Looking ahead

Friday has the latest Chicago PMI number, market is seeking 55. Sub'50s (recessionary) look somewhat unlikely. Arguably, the bears should merely look for anything in the 52/51 area. There is also consumer sentiment data at 9.55am.

*There is no sig' QE to end the week. The new POMO schedule for July is issued by the Fed in the afternoon.
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Well, lets see how we close the quarter..and indeed, the first half of the year.

Goodnight from London

Daily Index Cycle update

The main indexes climbed for a third day, with the sp +0.6% @ 1613. The R2K was much stronger, +1.7% @ 979. Near term trend is certainly to the upside, but bulls will need a weekly close in the sp'1620s to confirm that the 1530s are no longer on the agenda for early July.


sp'daily5

R2K

Trans

Summary

So, a third day higher, and the bulls are back. The recent scare that the Fed might reduce the monthly QE of $85bn is again fading. After all, that's all settled again, yes?

How we close tomorrow - which also happens to be the end of Q2, will be important. Certainly, there is the issue of 'window dressing', and that most definately favours the bulls.


SP'1700s within a week or two?

The market has seen a rather disturbing straight up 60pt ramp in just 3 trading days. The really scary thing is at this rate, we'll be breaking new historic highs by the end of next week. Considering the last four years of mainstream delusion and market manipulation via QE, you'd have to at least consider sp'1700s as a viable scenario within 3-5 trading days.

Personally, I still think we cycle another wave lower, hence I'm still holding short, but if we do close tomorrow in the 1620s, I'll seriously consider bailing.
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a little more later...