Pre-Market Brief

Good morning. Equity futures are significantly higher, sp +23pts, we're set to open at 1907. September is coming to a close, and despite current gains, the sp'500 is on track for a second net monthly decline of around 3%.


sp'60min

sp'monthly

Summary

For those holding short overnight, this is clearly going to be a lousy open, but then, the bears have been in this situation a fair few times in recent weeks.

So... why the early gains? Difficult to say.. although technically, the hourly cycle is set for a bullish MACD cross at the open.

It will be important that the equity bears at least keep the market <1915 at the Wednesday close... at least to maintain the broader downward trend from sp'2020.
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Overnight Asia action:

Japan: broad strength from the open, +2.7% @ 17388, no doubt part of that will be due to BoJ buying.

China, moderate strength, but still holding close to the 3K level, with the Shanghai comp' settling +0.5% @ 3052.
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We have a long day ahead... to wrap up what has been a pretty wild month.

Today was day 9

US equities vainly tried to rally, but broadly failed, with the sp'500 settling +2pts @ 1884, having seen a new cycle low of 1871. Wednesday will offer a break of the Aug' low of sp'1867, and that will then quickly lead the market to 1820.


sp'daily5d

sp'weekly8b

Summary

Suffice to say, broadly, it was a day for the bears, with new cycle lows all over the place.
The bigger weekly cycle remains outright bearish, with best case downside to the 1700s this Thurs/Friday.
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Looking ahead

Wed' will see ADP jobs, Chicago PMI, and the latest EIA oil report.

*Yellen is set to appear at the St' Louis Fed, I'm not aware if that will be covered live. No doubt the event will get some media attention after last Thursday's 'issues'.
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Positioned for day'10

Tomorrow is day 10 since the FOMC high of sp'2020, and in theory.. it should be a fiercely bearish day. It would not surprise me if we are trading somewhere close to sp'1820 with VIX exploding into the mid 30s. Of course, it sure would help if the Shanghai comp' loses the 3000 threshold overnight... along with the Nikkei -2% or more. That would help spiral the EU indexes lower... and help the sp'500 achieve a straight forward gap under the Aug'24/25 low of 1867.

Yours truly is holding short overnight, and seeking an exit around sp'1820.. whether tomorrow or Thursday.

Goodnight from London

Daily Index Cycle update

US equities settled moderately mixed, but well below their morning highs, sp +2pts @ 1884 (intra range 1899/1871). The two leaders - Trans/R2K, settled +0.3% and -0.6% respectively. Near term outlook is for further downside to at least sp'1820.


sp'daily5

R2K

Trans

Summary

*the R2K continues to lead the way lower... first target is the Oct' 2014 low of 1040.. which would equate to sp'1820.
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Trans looks headed for the giant 7000 threshold.. .which seems possible this Thurs/Friday.

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a little more later...