Pre-Market Brief

Good morning. Futures are moderately higher, sp +7pts, we're set to open at 1788. However, the Nasdaq is -0.4%, held lower by AAPL, -8%. Metals and Oil are both fractionally higher. Equity bulls look set to make a play for the 1800s today.


sp'60min

Summary

So, we're set to open a little higher, and with the hourly MACD cycle  about to turn positive, there is potential for the bulls to kick the market back into the 1800s.

However, this is arguably..going to offer the first decent re-short opportunity in over a year.

The bounce...could easily drag out into tomorrow, and maybe we'll see a brief FOMC spike to 1810/15..before a reversal.
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Early movers: AAPL -8%..will be interesting to see whether it can recover across the day.
STX, -5.7%...also on market reaction to earnings.

Ford (F), +2.0%
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We've a fair few things today...some econ-data...QE-pomo, and King O' later this evening...

Of course, the FOMC starts today, with the announcement tomorrow at 2pm.

The fun never ends..right?
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Update on Japan

Brazil, Spain, Italy..France...indeed, most of the world indexes are now looking problematic to end January. Baring a reversal in the next few days, First downside for the bears should be 12k, which is 20% lower.
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Video update from Mr Permabull



Oscar has struggled in the past week, with a series of bad calls. However, he does point out correctly, natural support in the 1780/70s..and indeed, its possible we just bounce here for some days.

As many also recognise though..a break <1765 - the 100 day MA..and taking out the 1767 FOMC taper'1 low, would be a major bearish achievement.


*Durable Goods Orders:  -1.6%

Pretty lousy numbers, and the sp' drops 5pts on the news... to +2pts @ 1783.

Weekly cycles are conclusively broken

Despite the latter day recovery (part of a very natural bounce), after new daily cycle lows earlier in the day, the bigger weekly cycles are now clearly broken. Most indexes are suggestive of further downside to the low sp'1700s, no later than mid/late February.


R2K, weekly

Summary

All of the US equity indexes now generally look like the above R2K chart. With the R2K conclusively breaking the trend from Nov'2012...things look clearer, at least for a few weeks.
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Best case for the bears

The following few charts should clarify what I am now seeking in the coming weeks and months. If sp'1850 was an intermediate top - completing the wave from Oct'2011, then we should eventually battle lower to the mid 1500s.


sp'daily1b

sp'weekly7b

Daily1b is one outlook that might frustrate many bears..but it'd still result in downside to the mid/low 1700s by mid/late February.

What would be VERY much more exciting is if we break <1765/55 this week..or next - see weekly7b, that would likely result in a fast hit of the 200 day MA..along with the lower weekly bollinger in the low 1700s. If 1850 was a key intermediate high, then the primary target are the mid 1500s..just a few months away.


Looking ahead

A busy Tuesday is ahead. We have Durable Goods Orders, Consumer confidence. There is the start of the FOMC meeting, and we have King O' addressing the senate/congress at 9pm EST.

*there is sig' QE-pomo of $2-3bn, bears..beware!
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We have a VERY busy week now underway..and I'd better stop there!

Goodnight from London

Daily Index Cycle update

The sp' broke lower in late morning to 1772, but then found a floor, and saw a latter day recovery, settling -8pts @ 1781. The two leaders - Trans/R2K, settled lower by -0.8% and -1.4% respectively. Near term upside is 1810/15, with viable downside to the low 1700s.


sp'daily5

R2K

Trans

Summary

A rather important third day to the downside for most of the big indexes. We saw a lower low..and a lower high..there is nothing bullish here.

With the weekly charts clearly broken, equity bears are starting to show some consistency - something that has been lacking in over a year.

It increasingly looks, that one way or another..we're going to test the 200 day MA on the sp'...right now, that is 1702 - and still slowly rising.
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*As at 7.30pm EST, AAPL, -$44, (-8%) @ $506.  Maybe if AAPL started losing money like AMZN or TWTR, it too could have a PE of 100...or 1000 ? Crazy times...crazy valuations.

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a little more later...
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Closing update from Mr topstep


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