As we surmised, SPX made a new high on Friday. By poking through 2093.55, it technically invalidated all those nifty bearish Fibonacci patterns. Though, as we pointed out Friday, the last several times SPX eeked out a new high, there was a significant sell off.
First, the rally from 1982 has been fast and furious and fueled by a rapidly shifting news flow. We’re coming up on a holiday weekend, where big ramp jobs are commonplace — especially when it looked like the market was poised for a drop.
On the other hand, the past two new highs have been followed by large drops. I see no reason in the charts to expect this will be the third, but that will depend on whether CL retreats and/or USDJPY — which is still in retreat mode after tagging that critical .618 at 120.11 — provides its usual ramp.
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