Friday 31 August 2012

Daily Index Cycle update

The market closed moderately lower across all indexes, with the VIX confirming the move. The dow is closest to breaking the trend line from the June low.


Dow, daily



Sp, daily



Transports, daily


Summary

An interesting day. Sure the declines were barely 1% for some indexes, but its the first decent bit of price action in over 5 trading days.

The dow is actually pretty close to breaking the June rising trend line, we only need to hit 12925 tomorrow - a drop of only 75pts to make a clear break. The next key level is 12800, so there is a near term 200pts to the downside available.

Sp' downside target remains 1380, it will be very difficult to break under that. Secondary target - the previous cycle low, is 1354. As I keep highlighting, the bears need sp'1340s to get confident.

The tranny closed under the important 5000 level. A close tomorrow under 5k would be a really important warning, and make for a nice red candle on the rainbow monthly chart.

A little more later