Several websites I read yesterday referred to stocks’ last minute decline as a “flash crash.” Nothing could be further from the truth.
First, a flash crash shouldn’t apply to a decline that went exactly where it should have and, in fact, was predicted in advance. From yesterday’s post Still Waiting:
I believe the SMA50 at 2064.65 is the primary target, probably when the 5-min SMA200 crosses it sometime later this morning.
USDJPY — which was ramped higher all day long in order to prop up stocks, dropped through support in the final hour. They could easily have waited until after the close to let it settle lower. For whatever reason, they didn’t. So, the decline happened in the closing minutes. Bottom line, while SPX has failed on several occasions to take advantage of opportunities to break out, it isn’t because it can’t. CL, USDJPY, TNX and EURUSD are still fully capable of forcing stocks higher.
It’s because TPTB have made certain choices that delayed a breakout. The grand plan will be made clear to us muppets when they’re good and ready.
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