Good morning. Futures are moderately higher, sp +3pts, we're set to open at 1841. Metals are a touch weak, Gold -$4, whilst Oil is up 0.7%. Equity bulls merely require just a little follow through to the upside, to fully confirm 1815 was a near term floor.
sp'60min
Summary
Well, we're set to see at least a little follow through to the upside this morning, and with very heavy QE today, bears should be very concerned that we'll be breaking into the 1850s before the Friday close.
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Mr Market has again teased the equity doomer bears with a one day special..only to be followed by an almost complete rebound. With the daily cycles ticking back upward, it would seem the market will be breaking new index highs in the coming days..and weeks ahead.
sp'weekly8
sp'weekly4
Summary
For the equity bulls, it was just another typical rebound from a 'one day bear special'. We've seen this sort of event dozens of times across the last few years...and it is certainly no surprise to me.
Those watching the VIX...with it slipping into the 11s for the second consecutive day, should indeed come to realise that this market has ZERO fear about the near/mid term.
A brief update on two of the PIIGS
As I've been suggesting for many months, if even the ugly PIIGS of the EU are rallying..then it bodes well for the stronger economies/markets of the USA and Germany.
Italy, monthly
Spain, monthly
Both indexes are looking strong this month, and you can see there is very natural resistance, but that is around 10/15% higher in both cases. I hold to the original targets of 22500 and 12000 respectively.
If those occur..then we're surely looking at sp'1950/2050 by April/May..before a very significant correction of probably 17/22% across just 2-4 months.
Looking ahead
There are a fair few things tomorrow. We have producer prices, Empire manu' report, but more importantly..the first Fed Beige book of the year (2pm). No doubt the market will jump on that if it sees a pleasing balance between 'economic growth' and 'no-taper'.
Once again there are two fed officials due to speak, one of which is Lockhart, whom the market used as an excuse on Monday to sell lower.
*there is VERY heavy QE-pomo of around $5bn...bears...should be frankly...terrified.
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Equity indexes reversed most of the Monday declines, with the sp +19pts @ 1838. The two leaders - Trans/R2K, both settled higher by 1.3%. Near term outlook is for general upside, into the sp'1860/80 zone by end month.
sp'daily5
R2K
Trans
Summary
*Trans/R2K look especially strong in terms of the rebound today.
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Equity bears need to take a good long look at the above index charts. The broader up trend does indeed continue, and with the weekly/monthly charts offering 1860/80 this month...bears are again in real trouble of being ground down to dust.
Near term outlook is for the sp' to battle higher, into the 1860/80 zone by end month..when Yellen will take over from the Bernanke.
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