Pre-Market Brief

Good morning. Futures are flat..for just about everything. Sp'500 is set to open unchanged at 1661. Today is opex, and with $3bn of QE, the bears face something of a challenge to close the market lower. The obvious target is the 50 day MA, just a little lower @ 1656.


sp'60min

Summary

So... a flat open...and that will give everyone a chance to re-position.

Considering the last few trading hours, along with 5/15/60min MACD cycles that look floored, bears should probably have already exited, ahead of the weekend.

At best, a hit of the 50day in early morning, before a general recovery into the 1670s.
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*I remain on the sidelines, and I don't expect to trade today either. Doesn't seem any point, with sig' risk of upside into the Friday close..and possible follow through early next week (to the upside).

Frankly, I'd only feel comfortable with a re-short in the sp'1680s or higher..and that sure doesn't seem likely for a few days.
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9.34am... market testing the 50 day MA . sp'1657.. hmm

9.40am.. looks like a floor at the 50 day.

If I could stomach it, I'd be going long now, but I can't.  Absolutely tired of this market.

Target upside remains the 1680s.

Downside into the September FOMC

The main indexes finally picked a direction after trading within a 3% range for the past five weeks. With the market decisively breaking 1675, sp'1709 is now a confirmed top. The only issue is what happens after the current down wave concludes in September.


sp'weekly4b - long term hyper-bullish outlook

sp'weekly8

Summary

If there is one thing worse than losing money, its being on the sidelines, and not being involved.

I suppose I could have chased the open lower at sp'1670, but really, that goes against a core personal trading rule, never mind that the hourly MACD cycle was already low yesterday afternoon.

So..for yours truly, it was one of the most annoying days of the year so far. Tomorrow can only be worse, if we gap down another 1% or more. At which point, I'll probably turn off my screen until next week.


Downside into the next FOMC ?

The weekly charts are highly suggestive of downside into September, where we have the next FOMC announcement due on Sept'18.

If you consider that markets might unravel into that time, do you think there is a chance in hell that the Bernanke is going to start cutting QE? Hell no, in which case, the bounce from the FOMC is going to be fierce, probably 75-100pts.

That will get us right back into the mid 1600s, and then the ultimate issue will become apparent. Does the market put in a critical lower high...or does it just keep on rallying into spring 2014? Right now, that is utterly impossible to fathom, with late Sept/early October likely being a treacherous time for traders.


Looking ahead

There is a trio of minor econ-data tomorrow - housing starts, productivity/costs, and consumer sentiment. If those come in at least 'reasonable', then the market will have an excuse to rally.

*there is sig' QE of around $3bn tomorrow. Although yes, I can hear the bears bitching that since Thursday closed lower - despite the earlier QE, that negates the previous four year link between QE and the rising US/World equity markets. Idiots.
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sp'60min'4 - H/S formation confirmed

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So...what the hell do I do next? Going long is out of the question, not least now that the old support of 1675 has been busted. The only issue is trying to find a decent short entry level, but what if we just keep on falling?

Those daily charts sure aren't offering any sign of a turn yet, and as some out there are suggesting, a move down to the 1630/20s is viable within a few days.

Goodnight.. from a frustrated London

Daily Index Cycle update

The main indexes all closed significantly lower, with the sp -1.4% @ 1661, a very decisive close under the old support floor of 1675. Near term trend looks weak - although a bounce briefly back into the 1680s is viable. Mid-term outlook is for downside to the sp'1575/50 zone by mid September.


sp'daily5

R2K

Trans

Summary

For the bears, it doesn't get any better. A straight forward gap right under the old support floor, and then just continued weakness across the day. Despite renewed attempts to rally after late morning, the bulls failed, with the market settling very close to the lows.

The only issue remains whether the bulls can stage a recovery bounce into opex/early next week, before a continuation downward.

Mid-term downside now seems relatively assured into September. The bigger wave count - even on the hyper-bullish outlook, is suggestive of sp' back in the 1500s.
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a little more later...