The Swiss team’s technical report was released just as the price action was passing their key levels kicking off hedging actions for protection of longs.
SOX, CYC consumer discretionary, OSX, Nasdaq Composite and the Russell-2000 have all broken last week’s pivotal reaction low.
Of note the Russell really fell out of bed today as did the home builders. The Dec Vix futures have risen to 19. Today has, in theory, been a significant day.
Their technical comments on the commodities are absolutely valid and worth taking note of. The Aud is also holding up and oil has not broken its 101 level in spite of today’s index moves.
“Apart form any near-term pull backs, our bias for commodities and the metals remains bullish into late December!”
& for long suffering silver bugs.
“Silver Bullish Biased Above 20.70”
Out performance Asia which we’ve also been predicting on the forum pages.
“Our medium-term tactical view on EM’s and Asia remains bullish and into year end”.
“Key pivot level Hangseng 22845”
Europe wise tomorrow will be a very interesting day. We technically still have a lot of strength in terms of market breadth. Many sectors have beautiful price trends. 52 week highs did not confirm on the recent stoxx600 and momentum indicators also did also not confirm. But highs in enough sectors and leading stocks did made new highs to suggest the move was well supported if weakening. The euro utility recommendation is a useful call from a technical, value and defensive selection.
Their medium term call remains unchanged.
“Cyclically, the break of 1709 opens a bullish time window into end December, which suggests that the current weakness and a potential set back into late October/early November should only be corrective and not touch the underlying bull trend in the SPX. However, we are sticking to our view that from a late December/early January top there is the risk of a more significant correction into deeper Q1 as the next major tactical buying opportunity.”
For my two pennies, the US political leaders are very likely to find a last minute deal and when they do the indexes will rally as their is sufficient technical strength to get a decent bounce. I dont expect a new high in the broader SP500 and Dow but the cheer leading sectors might. I fully expect more and more stocks to break down on this bounce and the winning circle to be smaller yet again. This is all very consistently showing a complex price distributive top for a tired bull market nearly 5 years old.
Near term, spikes aside, a bounce is coming. The wild card is political stupidity.
Seeing how Asia reacts over night, Europe tomorrow & the commodities will be very interesting as instruments appear to be diverging from prior correlations.
Here the report
All the best
Rich
(21 votes, average: 5.00 out of 5)
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