US indexes start the day with some minor chop, breaking lower to 1933, but quickly jumping to 1940. On no basis though do the bulls look able to push significantly higher from here. A test of 1926 looks a given...and should fail.. opening up 1915/00 zone by Friday.
sp'daily5
vix'daily3
Summary
Equity bears shouldn't be concerned at the currently red VIX... 18/19s look a pretty comfortable target... whether later today.. tomorrow, or Friday... it should make little difference.
It remains the case that bears probably only have until this Friday to push lower, until the next up wave - which I'm still guessing will hit at least 1970/90.
Good morning. Futures are a little higher, sp +5pts, we're set to open at 1940. Metals are moderately higher, Gold +$6. Oil remains very weak, another 1% lower in the $87s. Equity bears should be able to contain any opening gains, before the 1920s at some point today.
sp'daily5
Summary
So... we're set to open higher, but after the Tuesday declines, a break below the sp'1926 low looks VERY likely today.
Indeed, many out there are now looking for a full test of the Aug' low of 1904. I'm not sure if we'll make it that low this week, but we should at least get into the 1915/10 zone.
-
Update from an overly loud Oscar
Indeed, Mr C is starting to allude to a bigger cyclical change.... interesting huh? I realise some of you get real pissed that I dare highlight him, but he has been on the correct side for a good 5 years.
Something I've been looking for - from a number of people I follow, is the consideration that a bigger cycle turn is in.
-
Bigger picture thoughts
As I noted in my overnight post, even the current down wave has been choppy, and inconsistent.. along with a subdued VIX. Since the key low in Oct'2011, that is indeed the sort of price action we've seen... but for the first time since then...the broader monthly cycles are effectively exhausted...and are rolling over.
R2K, leading the way lower
The R2K is 100% BROKEN, probably headed for the low 900s...I'm not sure if that would equate to sp'1750.. or 1650. Regardless.... would anyone dare suggest this is going to new highs before at least testing 1000... if not 900?
So... lets see how long it takes for the bulls to fail today.... a daily close in the 1920s seems very likely, along with VIX 18/19s.
Good wishes for Wednesday trading.
-
9.06am... Indexes ALL turning red in pre-market.... we could be testing 1926 by 11am. Whether it holds on the first test... not important.
..watching CNBC.... borderline hilarious to see how some of them seem genuinely rattled after yesterdays declines. I'm almost amazed they aren't crying, and demanding QE4 starting Nov'1st.
US equities closed lower for the second day, but still, the market is only 4-5% below the historic highs. If equity bears can knock the market to 1910/00 within the remainder of this week, there is a very valid bearish H/S scenario into year end.
sp'weekly7a
sp'monthly
Summary
So... the weekly 'rainbow' candle remains red... and trend is still suggestive of a hit of the lower weekly bollinger.. in the low 1910s. Certainly though, I don't expect a break under 1900.. with continued downside in the current down cycle.
Seriously... can we break <1900 before year end?
Recent price action has been somewhat bearish, but as ever.. the down waves are still not that consistent.. and the VIX has remained relatively subdued in the teens.
From a trading perspective... late Oct/early Nov... its pretty simple.. if we're stuck in the 1970/90 zone.... I will short with a stop somewhere in the 1990/2000 level. If I'm right about the formation... a blue'3 wave will complete within 9-13 trading days... with downside of around 200pts - roughly 10%.
A fib' retrace of 38% - as happened in summer 2011.. would equate to sp'1650 or so...
... but frankly, that seems next to impossible in this market. Who won't be buying in the 1800/1700s... assuming we even get low?
--
Closing update from Riley
So.. Riley - like Carboni, and some others are still gunning for the sp'2100s within the next few months.
I'd be in agreement with them, except the monthly charts - not least the R2K and Dow, are already broken, and bode for further weakness... rather than new highs.
--
Looking ahead
The only thing of note tomorrow are the FOMC minutes... but then, I don't expect any surprises in that. No doubt the market will be a bit twitchy ahead of the press release though (2pm).
*next QE is not until next week, and I will be glad to not have to note the figures once QE3 concludes end month.
-
