Awaiting another Fed day

The market appears rather confident ahead of the next FOMC announcement. The daily charts have seen price momentum swing almost fully back to the bulls. Baring a 'spooky' fed statement/policy change, this market looks set for sp'1700s within the next few weeks.


sp'weekly8 - near term count'2

sp'weekly9 - mid-term count, bullish outlook

Summary

I don't expect anything from the Fed tomorrow that will spook the market. Interest rates aren't going to change, nor is the much touted 'tapering' going to begin. No, it will be surely just be an FOMC statement of nothing.

That certainly doesn't mean the market won't briefly sell lower, but that in itself is again the proverbial 'dip buying opportunity'.
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The two weekly charts above, remain my 'best guess'. The bigger macro-picture is holding together, despite the underlying western-economic weakness out there. The central banks are still managing to paper over the problems, and with bonds largely unattractive, where else is the money going to go?

I do still expect a mid-size wave lower in Aug/September, but that will probably be all the bears get this year...ironically back to the levels of last week.

All things considered, this market looks set to be testing sp'2000 in spring 2014.


Looking ahead

The FOMC announcement is at 2pm, and the Bernanke will be doing a press conference around 2.15/30pm.

We could see some pretty wild price swings, so..for those with trading stops...it could be a very annoying afternoon.

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*I'm sitting the current Fed-affected market out until Thursday morning. Of course, if I'm right, the sp' will be in the 1670s by then, at which point a new long position will be...too late. Besides, opex is this Friday.

Arguably, it is a case of 'come back next week', and just buy on the next minor down cycle.

Goodnight from London

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I noticed this on ZH, it certainly deserves being highlighted here also...



Kyle Bass, a broad overview of what is coming.
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Daily Index Cycle update

The US equity market closed higher for the second consecutive day, with most indexes climbing almost 1%. Trans and the R2K both support the notion that the market has completed a wave'4, with a fifth to take the market into the sp'1700s this July.


sp'daily5

R2K

Trans

Summary

Another day that the bears will want to forget, although its not like the primary trend is down, so it really shouldn't come as a surprise.
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One thing that comes to mind. How many were shorting into the swift down move yesterday afternoon, and are still holding on the short side?
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If the market gains some relief/confidence from the FOMC tomorrow, then the sp'1670s look a given, the only issue then would be..how soon until we break the Bernanke 'reversal day' high of 1687?

Right now, the 1700s look viable almost within the next week or two, but appear much more likely by mid July.

What is clear..the notion of a near term break <1608....err, no. That just seems so unlikely now. Bears had their chance...and failed.
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a little more later...

Volatility relatively holding up

Considering the equity market gains, the VIX is holding up very well. No doubt this is partly due to the looming uncertainty of the Wednesday FOMC. The VIX closed -1.1% @ 16.61  Daily VIX trend looks bearish, and a break to the 14s looks very viable by the Friday close.


VIX'60min

VIX'daily3

Summary

There is very little to say, other than VIX looks set for further weakness for the rest of this month, and probably the first half of July.
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Equity bears have little to take comfort in from the VIX, aside that the VIX is still within a broadening up trend - see daily chart, although I'd guess that trend will break tomorrow.
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more later..on those bullish indexes

Closing Brief

Another day for the bears to forget, with the main indexes climbing almost 1%. The two market leaders - Trans & R2K, closed strongly @ 6358 and 999 respectively. Underlying momentum continues to swing back to the bulls, sp'1670s look very likely within a day or two.


sp'60min'3 - inv. H/S

Summary

The key 'marginally higher low' of Sp'1608 is now looking a fair way down, and sure doesn't look like it'll be breached any time soon.

Indeed, if my broader outlook is correct, 1608 might not be tested for another 3 months. An even bigger picture outlook is suggestive that we might not see sub 1600s for another 4-5 years.

Yes...years.

As ever..it is...what it is. 
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*I remain on the sidelines, and sitting it out until after the Fed nonsense is out of the way.
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