Pre-Market Brief

Good morning. Futures are a touch lower, sp -1pt, we're set to open at 1984.. a mere 164pts (8.2%) above the low from 2 weeks ago. Metals are fractionally lower, Gold -$1. Oil is starting with sig' gains of 1.3%.


sp'daily5

Summary

With the break above the 50dma (1967), there is open air to the giant 2000 threshold.. where the upper bollinger is lurking.

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Notable early weakness, FB, -7.4% in the $74s, post earnings. Vulnerable to a move to the 200dma in the 70/68 zone.
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Update from Mr C.



I would certainly agree with Oscar on the importance of recognising the new high in the Transports. Although the same situation occurred in summer 2011, and that didn't work out so well for the broader market 3-4 weeks later.

The little rant on Mr Spencer... I also have to agree with.
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Special note on the metals

The broader trend remains bearish of course, since the spring 2011 break. I'm seeing increasing chatter about another major collapse wave to the giant $1000 for Gold... before year end. That certainly seems possible.

Once Gold is testing the $1000 level... the miners will finally start to become an interesting consideration.

Good wishes for Wednesday trading
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9.06am.. futures turning a touch higher, sp +1pt... 1986...    Metals weakening, Gold -$6.


9.25am.. Watching the Cramer on clown finance TV... incredible to see he hasn't hidden in a hole since 2 weeks ago. Not surprisingly, he was utterly bearish at sp'1820.. but now is hyper bullish.

With weak metals, miners are following, ETF of GDX -1.1% @ $20.30.... a daily close in the teens... seemingly likely. 


9.35am... The power company is here... .and I'm about to have the plugged pulled... as they switch out a meter.

back... in 'some time'.

QE3 set to be officially terminated

Barring some bizarre change of plan, the US Federal Reserve look set to terminate QE3 tomorrow. The market has not 'gone it alone' in a full two years. The mere psychological loss of Fed support, will be a problem for Mr Market, at least to some degree.


sp'monthly8 - QE phases

Summary

So... another day for the equity bulls, with a daily close of sp'1985. Frankly, even I'm surprised. I thought my upside target for the mid 1900s - stated two weeks ago, was bold, but here we are... just 1.7% from breaking the 'Alibaba top' of 2019.


The weekly charts offer a mixed picture.

sp'weekly

I suppose it could be argued we are back testing the old broken support/trend, but still.. this is one mighty strong bounce.. if it could even be called that anymore.


Not waving the white flag... quite yet

Despite a move above my own 'last line' of the sp'1970s... there is still a moderate chance we'll see a major wave lower in November.

However, with each daily close >1970... it becomes less probable. The fact the Transports broke a new historic high this morning, makes a test of the 1820 low that bit more unlikely.
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Looking ahead

Wednesday will of course be all about the FOMC. The announcement is due at 2pm. There will NOT be a Yellen press conference. Market is expecting the termination of QE3, along with a press release stating 'rates will remain low'.

*Next QE is.... well, at least not until spring 2015
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A busy Wednesday is ahead

Today sure felt like bearish capitulation, as those who are already short were short-stopped in the 1970s. But what about Fed day?

I'll strongly consider an index-short tomorrow, after the 2pm announcement, but it will depend on price action. Personally, I want to see a minor initial spike on the upside, something on the order of 3-6pts, whether that is to sp'1980, 85, or 90s. A retrace of some kind... perhaps to the 1920/00 zone seems viable. Hopes of sub 1900... are pretty faded right now.

Finally, I want to say thanks to those that do say hello during the trading day... its always good to hear from some of you, bearish or otherwise ;)

One of these days the market will blow up.... when it happens.. I'll be there...



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Goodnight from London

Daily Index Cycle update

US equities continued to climb, sp +23pts @ 1985. The two leaders - Trans/R2K, settled higher by 1.5% and 2.8% respectively. Near term outlook is for a reversal after the next FOMC announcement, but downside increasingly looks limited to 1920/00 zone.


sp'daily5

Trans

Summary

*most notable aspect of today, and perhaps of the entire 9 day rally... the Transports broke a new historic high.
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So... the broader market continues to rally... and with a new historic high for the Tranny, it bodes well for the bulls.

Even if the market reverses from the FOMC tomorrow afternoon, there would seem more likelihood of flooring in the low 1900s.. than of breaking through it. For many.. not least yours truly... it is not the most pleasing of thoughts.

As ever though... one day at a time.
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Closing update from Riley



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a little more later...