With last weeks close >sp'1858, the weekly charts settled back to outright bullish. Yet, after just one trading day, the weekly charts are back to flashing a provisional warning of trouble. The critical level for the equity bears to break and close under, is the weekly 10MA, currently @ 1834.
sp'weekly7
Summary
*back to a blue candle..which I will continue to refer to as a 'provisional warning of trouble'.
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So..a somewhat bearish start to the week, not least for the R2K, Nasdaq, and all of those crazy momo stocks.
Where next though?
Market is currently stuck in the 1880/1830 range. Considering the weekly MACD (green bar histogram), we are still seeing underlying weakness, and with the new blue candle...bears again have an opportunity to break this market lower.
The most bearish outlook remains...
sp'weekly7b
Clearly, we need not only a break of 1830, but the 61% fib level in the 1790s needs to also be undercut. A daily close in the 1765/55 zone would be just enough to offer a grand H/S scenario. As ever, I will be looking for a hit of the lower weekly bollinger band, something we've not seen since Nov'2012.
Looking ahead
Tuesday has a few pieces of housing data, consumer confidence, and the Richmond Fed manu' index. That should be enough to give the market an excuse to move in the morning.
*next sig' QE-pomo is not until Wednesday
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I remain heavy short, with a core block of SDS, and a secondary small block of SPY puts - the latter of which I will seek to drop on any Tue/Wed' gap lower.
Goodnight from London
