Good morning. Futures are moderately higher, sp +4pts, we're set to open at 1659. Equity bears merely need to contain the minor bounces, and keep pushing lower this week to break <sp'1627. Precious metals are lower, with Gold -$11.Oil is similarly weak, -1.1%.
sp'60min
Summary
So, we're set to open a touch higher, but really, this is a very minor bounce.
Hourly index cycles are certainly on the low side, so..we could easily just trade largely sideways..before renewed weakness late today (FOMC minutes?), and make a break into the 1640s tomorrow.
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What is absolutely clear, until an agreement on the shutdown and debt ceiling provisionally agreed..and announced..this market is going to be just continue to broadly slide lower.
Considering the speed of the trend...we'll should at least be testing the 1627 low no later than middle of next week.
The Dow'30 remains particularly weak, with next key support just fractionally lower at 14760, and then the 200 day MA of 14720. However, most notable of all, if the Dow doesn't claw back higher into end October, the monthly cycle will likely go negative in November.
Dow'monthly
Dow'weekly
Dow'daily
Summary
First, I'm always adverse to cherry picking one index out above others, not least since it opens up all sorts of inherent biases. However, as many others have also noted the Dow has been effectively stuck for the last six months.
The daily chart break today was significant. The weekly charts are looking weak, and if we see Dow in the 14600s, the market is in real danger of spiraling much lower - if only 'briefly'.
As I often note, the monthly charts out-gun the daily/weekly cycles. What is now clear, unless the market can bounce back in the second half of October, we'll open November with the Dow monthly chart issuing the first big sell signal since Nov'2012.
Looking ahead
The main aspect for tomorrow will be the FOMC minutes (2pm). Mr Market will no doubt be looking to see who said what, and the chatter across tomorrow afternoon on clown finance TV will no doubt return to 'taper delayed...probably until 2014'.
If that is the case, the indexes might see at least a small bounce, although the broader down trend should hold, so long as we hold under sp'1670/75.
*there is no sig' QE until next Tuesday.
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I'm tired of this market. Having been whipsawed for some weeks, I'm largely done with it, at least until this debt ceiling nonsense is out of the way.To the rest of you still involved...good luck! At the very least I will endeavour to offer something 'useful' in these pages.
Goodnight from London
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Video from Gordon T Long, part'2 of a discussion on the Fed
If you've not already seen part'1 yet...see... HERE !
The main indexes closed significantly lower, with the sp -20pts @ 1655. The two leaders - Trans/R2K, naturally saw heavier falls of -1.4% and -1.7% respectively. Near term trend remains very weak, and the sp'1627 low is now within range of being tested, certainly before the end of next week.
sp'daily5
Dow
Summary
The Dow remains especially weak, and without question it has broken key support on the daily and weekly charts. The monthly cycle on the Dow is also weak..but more on that issue later.
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Clearly, we're in a steady downward trend. The bears are still unable to see any major downside action, and from what I gather..sell side volume remains relatively light.
In many ways..both bears and bulls alike should be seeking some sort of capitulation day, although as anyone who has traded this market for more than a few years will know..in some cycles, we don't always get such clear wash-out days.
