The bigger daily equity/VIX cycles are suggestive of a short term top of sp'2056, with some degree of moderate retrace... probably sub'2000.. into early December. Broader trend remains powerfully higher though... to the sp'2100s.. and beyond.
sp'daily5
VIX'daily3
Summary
So... a daily net decline for most indexes, but still... nothing significant.. not least reflected in the VIX which remains very subdued.
Best guess... a retrace to the sp'1980/50 zone.... which might equate to VIX 18/20 by first week of December.
Looking ahead
There is actually a great deal of data in the early morning...
CPI, Weekly jobless claims, PMI manu', Phil' fed, existing home sales, leading indi'
*Two fed officials are on the loose, not least the Dudley... Mr Market will be listening
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A retrace to sp'1910?
A regular reader (hello JC) reminded me of the 1910 level, which would be a 61% fib retrace. That is a mere 0.5% above the CRITICAL 1900 threshold. All those touting a giant expanding wedge should be desperate for a break <1900 before year end... which if it occurred would re-open up the original downside target.. somewhere in the 1750/1650 area.
sp'daily3 - fib levels
The problem is.. how are we going to break 7% lower to 1910, never mind actually breaking and holding under 1900? I just can't see it, not least with the BoJ putting a bid under (quite literally) the entire world equity market.
As ever... one day at a time... but for now... I can't see a retrace of much significance.
yours...... depressingly... 'broadly bullish' into late 2015/early 2016.
Goodnight from London
