Pre-Market Brief

Overnight futures were somewhat weak, earlier lows were sp-13pts, which just about would open us at the big 1400 level.

Q3 GDP: 2.0%, which seems bizarrely high. I can only guess it'll be later revised 'significantly' lower. As they say..'lies, damned lies..and statistics.'


sp'60min

Summary

So, GDP is a touch better than expected. I'm surprised at the 2.0%, doesn't make much sense considering the other data-points which are worse now than late Spring.

The big level to take out is the cycle low of 1397. A close in the low 1390s would be VERY bearish for Monday, opening up 1370s....and also a further multi-day fall to the 1325/00 zone.

As at 8.35am...Sp -5pts @ 1408, I'd guess VIX is a touch higher, +3%
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UPDATE 8.50am

Indexes are now all back to flat. So much for the overnight futures.

Once again, it was all a complete waste of time. 

Red into the weekend?

Today saw the bulls begin another early morning lurch higher, but it failed. It is this second failure in a row that I find particularly bearish. With the VIX hourly chart offering big upside this Friday, and into next week, things could be about to get real exciting.


Sp'weekly'2yr

Sp'monthly,6yr

Summary

First, a brief note on AAPL/AMZN.

AAPL is still immensely profitable, but clearly its a little concerned about early 2013. In AH trading, it broke the monthly 10MA, hitting 585 - suggesting a move to $500 in the next month or two.

AMZN, razor thin margins....and now...no margins, with a 23 cent loss per share. In AH trading AMZN broke the key $210 level, briefly hitting 204. Target is now a very clear $150.
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Bearish end to October?

So far the decline from 1474 to 1412 is still a tiny move of barely 4%. All those bull maniacs calling this decline 'significant'..have clearly lost any sense of perspective. 

The weekly chart suggest a move to 1325/00 is viable within the 'very near term'.
The monthly chart would allow a multi-month move as low as sp'1200/1175.

Certainly, the low 1200s would make for a very tasty 'dip buying' level, even for those permabears out there, including yours truly! Right now, even a move to the low 1300s would seem out of range to most traders, but hey...we've seen a few 'surprise' major declines over the last few years. We're due another one. 


A stinky red Friday?

As for Friday, we have Q3 GDP data before the open, a number <1.5% should be enough to cause at least some market concern. The consensus estimate is for 1.9%, which seems bizarre, especially when you consider the earnings reports in recent days.

It will also be interesting to see how AAPL and AMZN trade across Friday. Considering their respective results - and AH price action, I'd look for them both to at least close moderately lower.

Goodnight from London

Daily Index Cycle update

The main indexes closed slightly higher, but it remains important to note that the early morning rally entirely failed to hold, with the market even going briefly negative. Despite the closing hour mini-rally, the daily near term trend remains downward.


IWM, daily

Sp'daily5

Trans

Summary





I suppose some bears can feel a little disappointed with the closing levels. After the early morning rally failed, and with the market red, the door was open to breaking much lower...but no. The bears did not have the energy to break lower today. Perhaps tomorrow.

The underlying daily MACD (blue bar histogram) cycles are very low, and there is now the persistent threat of a major jump to the upside on any 'excuse'. At the moment, considering the VIX is still not even 20, I'm not too concerned though.

Transports remains trading in its own little world. I'd certainly like to see it close the month <5000, to maintain a generally bearish trend on the monthly charts.
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I remain short, seeking an exit on a major down day, preferably somewhere around sp'1375, with VIX 20/21. With the weekly charts suggesting a target of 1325/00 as viable within the next week or so, I am reasonably confident of an exciting end to October.

A little more later.