What a day to be on the road! I’m still traveling, but here’s a quick shot of yesterday’s and last night’s action. Note the long-term support TL in log scale.
The ES channel holds up pretty well, too. And, while SPX overshot its 1.618 Fib, ES came in pretty close. In other words, the fireworks are probably over. We’ll likely be in rebound mode from here on out — assuming the plunge protection team is back in control. If so, then – in one fell swoop – TPTB can silence the technical/chart types such as yours truly who decried the ludicrous lack of downside moves.
If things worsen in global banking, then there’s plenty more downside where yesterday came from. SPX’s 100 day moving average is way down at 1910. And, the SMA200 is 1857. The past year has been characterized by moves that stop on a dime — or, more frequently, well short of their chart pattern/harmonic targets.
It’s hard to say whether this is the start of something bigger, or whether TPTB was simply silencing the critics in the midst of a low-volume period when no one was watching (and, they themselves were well positioned in advance.) But, if prices should move lower, I would keep in mind the possibility of a snap-back. USDJPY has been pedaling furiously to keep things on an upward trend.
A reminder, I will be on vacation all next week. But, I’ll post once in a while if the fish aren’t biting. GLTA.