Wednesday 16 April 2014

Pre-Market Brief

Good morning. Futures are somewhat higher, sp +11pts, we're set to open at 1853 - crucially, back above the 50 day MA. So long as Yellen or Fed official Fisher, don't say anything 'stupid' today, equity bears are not likely to be able to turn this back lower. Metals are set to open..flat.


sp'daily5


Summary

Frankly, it is not looking good for the bears. If we are indeed trading in the 1850s this morning, and certainly..if we get a daily close >1847 or so, then it would be highly suggestive that a short term floor is in. To me, that is a major disappointment.
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Using the R2K as a guide

If you saw the recent two videos from Walker, you'll know about his scenario where the R2K hits/briefly breaks the 200 day MA, only to rebound. If we see a net gain for the R2K today, I'd think it is white flag waving time for the bears. Urghhh!


The following would be a valid bearish scenario - so long as the R2K does NOT break >1210/15 in May/June.

R2K, weekly2, H/S


Make of that..what you will. Right now, that seems the best hope, but clearly, the R2K is now due a 6-8% rally, and we're already higher by 1% in pre-market.

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To those currently on the short side, I wlll merely note 'trading stops will be useful'. After all, worse case, is that this nonsense breaks new index highs (at least for the Dow/SP') in May..before the next wave lower.

As for me, I don't intend to get involved until after the Easter break. Further, any daily closes >1850, and that rules out any short side trades in the immediate term (if not much of May).


yours... content to be on the sidelines for 'some time'.


9.18am.. Pre-market gains holding... sp+12pts....that takes us to around 1855. It is pretty decisive now.

Notable gains in Oil, +1.1%


9.37am...It looks decisive. Barring a collapse on 'Yellen talk' - seemingly unlikely, this down wave is done.

First upside target is the 1870/75 price cluster zone.


9.51am.. hmm, a little spiky-fail...but we DID break the 50 day MA..and mood out there looks like bears are exhausted.