Wednesday, 28 March 2012

Are the Bears calling today a Victory?

So, in bear land, was today a victory, or another failure?

As Permabear, I have to call it a fail. Not a complete fail, but any bear has to be annoyed with how the last few hours of today went.

SP'60min cycle

The 60min cycle is quite probably complete. We have a nice spike-low, and the last hour candle showed some reasonable upside. A fair hint of what might occur Thursday. Certainly, we could still have a double or triple down cycle as happened last week, but I'm

VIX, daily, rainbow chart

To even my surprise today, the VIX closed RED! Can you believe that? That has to be a real disturbing sign for the doomers out there this night. If they aren't taking notice of that failure, then they are ignoring a real warning sign.

As I noted to a few traders today, until I see VIX back in the 20s, any move of 10, even 20% is irrelevant. The VIX at such low levels, is highly problematic to be of any use as an indicator.

SP' weekly

Bulls still have a positive week at the moment. With the 60min cycle now reset, there is the real possibility the market can crawl back up to at least 1415 by Friday. A new high of 1422/25 by the Friday close would be a devastating blow to anyone who is currently adding to new short index positions. It would also bode well for the first attempt next week to break the next key level of 1440.

More later...maybe :)

Weak Bull Hands Getting Shaken Out

The market just a short while ago broke below1400 - a pretty important level. Although this is certainly not a critical level, it will important than the bulls see this market close somewhere better than where we are right now. 1405 would suffice..perhaps, but 1410 would be a reasonable outcome.

SP'60min cycle

60min MACD cycle is pretty low now. As ever, that is not to say it can't just stay negative cycle for rest of today, even for a number of consecutive days, but more likely we'll some kind of move higher as the day progresses.

*Bulls will especially wish to see 1420/25 hit again within the next 2-4 trading days to confirm the uptrend is still intact.

As I post this, SP' is 1401..and looking like it may well have found some support.

Good wishes

Dr Copper - an early summer high?

Copper is without question a great indicator of underlying economic growth. It has been a pretty volatile commodity over the last few years, lets take a look...

Copper, weekly cycle, 2yr historic

Copper is still way below the 2008 highs, although admittedly so are the main US and world Equity markets. The count I've noted is something to consider. We do have two very clear triangles (pink), with the first one breaking to the upside. Will this latest one do the same? I am guessing it does, and my target is $4.10/20 by June/July.

I believe that will make the peak of the current 5-wave up cycle that has lasted since October'2011.

Copper, weekly cycle, 8yr historic (bearish scenario)

On a much larger time view, Copper appears like it could be in a wedge. This is a particularly tricky one to project from. Clearly there are two key levels to watch, from which we could then assume a more general direction.

1. A move above $4.60 would be VERY bullish (with major implications for Gold/Silver/Oil)
2. A move below $3.00 would be VERY bearish, and support the deflationary theory that many still hold to.

For the Commodity/Economic bears, it is easily possible that Copper will bounce off the lower triangle support line around the $3.25 level near the end of 2012, and then put in a lower high, before the more dynamic and fierce move lower sometime in 2013.

Dr Copper will certainly be important to watch in the coming summer, I'll be sure to provide regular updates on this important base metal.