sp', weekly, 2yr
Summary
The last 4 trading weeks have been a real choppy mess. We've seen what was probably wave'1 conclude - as discerned via the daily chart, and we're now in the middle of what is surely the corrective wave'2 UP.
The levels are clear, a break under the recent 1266 low will open up a fast move to the 1150 area. That might actually be the floor for wave'3 - with a minor '4 bounce, and then 5' finally hitting 1125/00 in August.
Anyway, first things first....first we need to complete this wave'2...rollover..and break 1266. Things get easier once that is achieved.
One final issue for the bears...will the market break 1100..and take out the 2011 low of 1074? If we do, then a secondary deflationary collapse wave really will be the scenario we face.
A closing thought for the bulls
For those of the bullish mindset..you sure do have a real challenge ahead this summer. I can't imagine this market breaking above 1400 - even if the Fed announces QE-twist to be extended. Only a full blown QE3 would ramp the market up for consecutive weeks, and hell, NO WAY can the Bernanke initiate QE3 whilst the markets are at these lofty levels.
No...this market is heading down. The only issue for next week will be trying to get the best possible short-entry.
Goodnight from London