10am update - you already had the retracement

The market opens with some minor mixed chop, but underlying upside pressure is there for anyone to see. Sp'500 looks set to break new historic highs, whether today, tomorrow..or later this week, does it matter? Weekly charts are absolutely clear, we're still broadly pushing upward.


sp'60min

sp'weekly8

Summary

*note the lower bollinger on the weekly, now at 1724. Next week it'll be 1740s, we ain't breaking <1737 for some months.
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All the talk of a retracement..we have already seen it...1826/1809.

This market remains fuelled by QE..and this morning will see $2-3bn of pomo fuel...bears have no excuse to note be side stepping this. The fact there is HEAVY QE of 4-5bn on Thursday...should make anyone considering the short side just walk away for the entire week.
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VIX +4.8%, but still, we're only in the 14.20s. A red close today would be the 8th daily decline.

Meanwhile...

Over in the Ukraine..its getting rowdy as the sun sets. LIVE feed
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10.06am.. micro down wave.. should find support around 1833/32.

No real downside pressure, QE money is going to be a problem ALL this week.  


10.30am... minor chop...and the bears lack any real downside power.

Anyone still doubt 1850s coming?

notable strength: UGAZ +12%

Pre-Market Brief

Good morning. Futures are a touch higher, sp +2pts, we're set to open at 1840. Metals are a little lower, after swinging around form initial gains, Gold -$2. With two sig' QEs in this shortened trading week, bears face the usual problems.


sp'60min

Summary

*awaiting Empire state, and housing data.
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Considering the QE and the recent price action from the sp'1737 floor, I'm guessing we'll soon be trading in the 1850/60s..likely by the end of this week.

Upside momentum is just so strong right now.

Many are again talking about a retracement, but hey, didn't we get one..remember the 0.9% drop from 1826-1809?
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Notable early movers...
TSLA +3% @ $204 - earnings are due this week, possibly later today
UGAZ +12% @ $30

Another year... or two

Regardless of any significant retracement this summer, the broader trend in US equities, looks set to remain strongly bullish. With Yellen likely to ramp the printing on almost any sign of economic weakness, US equities will probably be much higher by late 2015/early 2016.


sp'monthly6b - hyper bullish outlook

Summary

The above monthly chart links in with the weekly and daily charts that I have been highlighting since last summer.

Regardless of how you want to label the price action since the 2009 low, we are unquestionably overbought, having ramped from sp'1074 to 1850 since Oct'2011. The US equity market is more than due a sig' correction, not 10%, but something on the order of 15/20%, perhaps even a little more.

Frankly, I'll be utterly bemused if we don't at least trade down to the low 1600s this summer.


US t-bonds - another clue

The following chart sure is a kooky one. It is a mere extrapolation of the 2003/2006 MACD cycle climb, onto the 2012 low. That gives a cycle target of late 2015, which is interestingly where Armstrong's ECM cycle also maxes out.

10yr yield, monthly

Yes, all cycles are unique, but on any basis, we're well on the way to completing the current multi-year climb in rates. With the break >2.75, I'm resigned to an 'easy' upside target of 3.75/4.00. However, that might not be until next year. First, there is viable retracement to 2.25/00 - which might equate to where the equity market might be flooring this summer/early autumn. Sub 2% does not look viable, even if Yellen ramps the printing later this year.


Looking ahead

*see weekend post. Suffice to say, with sig' QE Tue/Thursday, bears face the usual problems.
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Goodnight from London