sp'weekly'8 - mid-term outlook
Summary
For those short today..and who were expecting downside on news of a QE-taper...for what little it might be worth..you have my sympathies.
Yet..really...what was the setup?
A market that is still broadly trending higher - as seen on US/World monthly index charts
The Dow, which confirmed a giant SIX month bull flag last month
The hourly index/VIX cycles which looked respectively floored/maxed on the MACD cycle
..and the recent overnight futures, a drop to the 50 day MA...which was briefly hit today.
For those bears who were profitable at 2.01pm, only to see their positions turn into huge losses in the following 119 minutes, what about trading stops? I realise many don't like them..but hell.. you gotta be nuts to let a winning trade turn red..not least on an FOMC day.
Looking ahead
We have the weekly jobs data, home sales data, phil fed', and leading indicators. However, Mr Market will likely still be focused..and reacting to the Fed QE-taper.
Fed official Fisher will be making comments.
*there is VERY heavy QE-pomo of $5-7bn... bears face SEVERE problems tomorrow..and Friday.
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Bears...can't win
I realise for those who called the taper right, and who were short, today was a really bad day. Yet, we have seen the market do this so many times over the years. How are some people still surprised at this kind of market response?
If there is one thing that the market doesn't like..its uncertainty. That has now been removed, and the equity bulls have a clear road into mid/late January - when renewed concerns about the debt ceiling will no doubt again rise up.
I hold to my original outlook from the early summer, seeking an intermediate wave'3 top in the sp'1950/2050 zone..before a sig' wave lower to the 1625/1575 zone...to be followed by sp'2500..if not much...much higher.
I'll close with the following...
sp'monthly3e, rainbow - hyper wave into late 2015/early 2016
I realise to many out there, the above scenario is sheer lunacy, but hey..just two years ago, the sp'1800s were considered 'crazy talk'...and yet here we are.
Goodnight from London