Tuesday 1 October 2013

Daily Index Cycle update

The main indexes closed lower, but certainly not 'significantly', with the sp -10pts @ 1681. Near term trend remains moderately bearish, but once the current down cycle completes, equity bears had better find the exit door...fast! VIX reflected the slight market concern.


sp'daily5


R2K


Trans


Summary

..and the third quarter comes to an end.

The sp'500 has declined for 7 of the past 8 trading days, and I do understand why some are getting a little excited - if not arrogantly confident, of a major..if not severe downside wave in the coming month or two.

Yet..I just don't see it. I don't see the bears as having had any significant downside power in the past few months. Its taken the bears 8 days to break the market 50pts lower from the FOMC spike high of 1729. If you take the pre-FOMC spike, bears have managed a drop of just over 1%.

When you also consider the two market leaders - Trans/R2K, both of which closed today with reversal candles, I'm very concerned the market is viable to a VERY significant snap higher..with major multi-week up wave starting..at any point this week.

Yes, there is uncertainty with the looming US Govt' shutdown, but in the scheme of things, its simply not a very important issue.


Video update from Mr Permabull


a little more later...