I've been slightly disconcerted by the number of normally bullish analysts that I check in on that are still leaning bearish here. There is definitely the potential setup for another leg down on equities, but after the perfect support trendline bounces on ES and NQ, and the break up in copper, I'm assuming that we're back to business as usual until demonstrated otherwise. If we see new highs today or shortly then I expect most of those analysts to climb back onto the bull bus, so I'm looking for those as soon as possible to clear up any lingering ambiguity.

A bearish view on SPX can be easily seen on the daily chart, where the rising wedge from the summer lows overthrew, and obviously looks vulnerable to breakdown until that upper wedge trendline is thoroughly trashed. What I've also marked on the chart is the main resistance trendline from the March 2009 low, which was the key resistance trendline until the April high last year. If we are in a new wave up, and SPX can clear the 78.6% fib at 1380, then the obvious target for this wave up will be to hit that trendline in the 1450 to 1500 area. Equities might not be able to reach that trendline again, but from a technical perspective reaching it would be ideal, as it would be a formidable resistance level, and it should then be possible to call the top for the wave up from a touch of that that trendline, albeit not necessarily at the first touch:

On ES the IHS I posted yesterday appears to be playing out towards the target at 1347, and I was very happy to see that the support trendline on ES confirmed with a third touch. That gives a decent warning level to indicate whether this move up might be breaking and that support is now at 1328.5:

The setup on NQ isn't as clear, but NQ poked above the 2335-65 resistance zone overnight and another break above should set up a run to 2400. The unconfirmed support trendline is now at 2355:

Copper retraced a bit overnight to establish the lower trendline of a rising channel. There is a potential IHS neckline in the 454.80 to 455 area, and we could see a reversal there to form a right shoulder:

Silver also retraced a bit overnight to establish the lower trendline of a rising channel. While I've been writing the previous high has been taken out and my next target is the IHS target at 35.7:

I've been meaning to post the longer term Yen bear case and here it is (inverted) on the USDJPY ten year chart. There's a falling wedge with the next upside target at 86, and if the wedge should break up then the target would be 124, which looks possible as the Yen's fundamentals really do stink:

I took a few minutes to compile the stats for the first trading day of every month for the last two years and here's the result:

Obviously the series is very bullish, with only four down days in the last two years. Interestingly, of those four (close to close), the three significant falls were all signalled by a gap down at the next open. That's particularly well worth noting today, as a gap down would require a break of trendline support on ES, which has been thoroughly tested as I've been writing. I'm leaning long today unless we see that support break and a gap down.