Wednesday 25 September 2013

Autumnal disappointment?

The sp'500 closed lower for the fourth consecutive day, and understandably, some of the equity bears are getting a little excited about the autumn ahead. Yet, the broad trend remains to the upside, and baring a few daily closes in the sp'1670s, the autumn does not yet look promising for the doomer bears.


sp'daily3 - fib retrace



sp'weekly8 - mid-term bullish outlook


Summary

The current four day down cycle for the sp'500 (certainly, not all indexes were lower today!) is kinda interesting. The fib' retrace is suggestive we might get stuck around 1690/1678. There is the 50 day MA of 1679, and arguably the even more important 10MA..also at 1679.

Frankly, I do understand why some chartists/traders out there are getting a little excited about the autumn ahead, but really, the primary trend remains to the upside..as it has done since Nov'2012..when the sp' was 354pts lower (a clear 20%).

How we close Friday..and indeed the month/third quarter (next Monday) will be important. Arguably, bulls should be content with anything in the 1700s, which looks attainable by the Monday close, even if 1680s are hit this Wed/Thursday.


Looking ahead

There are durable goods orders and home sales data. If either of those come in weak, it'll probably be the excuse the bears need to push the market lower by around 1% into the low 1680s.

*there is sig' QE-pomo of around $3bn,...as ever, bears beware!
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As noted earlier, the hourly index charts are now offering the bears a further small wave lower, perhaps down to the sp'1685/80 zone. That would make for a very natural place for the current multi-day down cycle to complete.

Baring any daily closes in the 1670s, I have little concern, and remain on the long side, although yes..I'm underwater (but only to my knees).
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Video update...

Something for the economists out there...from Gordon T Long



Goodnight from London