Pre-Market Brief

Good morning. Futures are a touch lower, sp -2pts, we're set to open around 1875. Metals are showing some strength, Gold +$9, with Silver +1.5%. Equity bulls look set to break new highs this week, possibly into the sp'1890s, as supported by the bigger daily, weekly, and monthly cycles.


sp'weekly8

Summary

*however you want to count this nonsense, the trend remains outright bullish, and I'd guess we break new highs this week.
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I'm not expecting much of today. There is no sig' QE for the bulls, although the hourly index cycle is due to start pushing higher.


Video update from Oscar


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10.38am...urghhh..are we open? lol   I can't deal with this clock change. back at 11am.

Dr Copper may need medical assistance

Whilst the US market saw only minor declines by the close, far more notable was the continuing weakness in Copper prices. The big $3 threshold remains critical, and if we see a few daily closes <3, then it will be a major sign of trouble.


Copper, monthly

Summary

So, Copper is on the slide, and the $3 threshold has already been briefly broken in overnight Sun/Monday Asia trading.

A few daily closes under $3, and the door will be wide open to the 2.25/00 zone. Such a drop would have huge implications for the precious metals...if not also Oil/Gas/Coal prices.


China remains a dire equity market

With the overnight drop of -2.9%, the Shanghai Comp' is back below the huge psy' level of 2000. There is now empty air to the 1750/1650 zone, right back to the collapse wave low of late 2008. I can only imagine the relentless horror the typical Chinese investor is still enduring. Six years, and still -65% or so from the 2007 peak.


Looking ahead

There isn't anything significant due tomorrow. Market will be free to dwell on any sporadic news, such as from Russia/Ukraine.

*next sig' Qe-pomo is not until Thursday.
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Goodnight from London

Daily Index Cycle update

US equities closed with minor declines, sp -0.9pts @ 1877. The two leaders - Trans/R2K, both settled lower by around -0.2%. Near term outlook is for the market to claw slowly higher into the next FOMC of March'19, into the 1890/1910 zone.


sp'daily5

Summary

A pretty quiet day..and I've little to add.

Equity bears have innumerable levels of support to break, not least the big 50 day MA, lurking in the 1820s. Primary trend looks set to hold at least into next week.
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Question from a reader...

 'I am confused. Not too many days ago you highlighted DRYS and said "if it got into the 4's then it would be good for a run into the 5's. Then it failed in the 4's and you thought it would attractive in the $3.75 - $3.80 range. Well, now it is "there" and now you don't like it at all. I bought in the low 4's but did not sell after dropping lower because I thought we were looking for a bounce at this level....now you think it is done and headed still lower? Thanks in advance on your thoughts, Ken Z.'


DRYS, daily

A daily close,right on the 10 AND 50 day MAs. Certainly, DRYS is 'somewhat on the edge'..although the broader trend is still broadly bullish from last summer.

As it is, price action just doesn't look so great. I guess its hard to explain it, but after watching this nonsense for so many years, there are times when even if something hits a buy target, I might still leave it alone.

*I should also note, I do not like seeing Copper (briefly break) <$3, along with the Shanghai Comp' <2000 (see later post @ 11pm EST). For me, they are another two variables that sway me from going long anything, not least a mere 7 trading days ahead of the next FOMC.

Call it a 'change of mind'...,'too afraid to buy'..or just 'not in the mood to get involved', but I do try to keep an open mind, regardless of targets.

This also applies to my primary intention to short the indexes on a possible 'brief FOMC' spike next Wednesday. I have a plan, but as ever..if the price action just looks overly strong, then I'll wait some more.

The one thing I am sure of, each day that we get closer to the spring, the safer the bears will be, when it comes to shorting the indexes. With just over 7 trading weeks until May, equity bulls will be facing a concrete wall of resistance.
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a little more later...