Yesterday played out very much as planned, with SPX coming within 2 points of our downside target before crude light’s rebound spoiled the bears’ fun.
Recall that we were looking for CL to reverse at 56.78 — the purple .786 — when the cash market opened. And, that’s exactly what happened.
This nearly 4% bounce off its lows provided all the ammunition SPX needed to abort a full backtest of the IH&S neckline and SMA20 and nearly close in the green.
It was a near repeat of Tuesday’s plunge which also came up short. The eminis are currently off 4 points, but were down as much as 10 points overnight before the euronext “broke” — which is code for “let’s turn this puppy around, but fast!”
Then economic elephant barging into the algos’ room today is the BEA report that the economy contracted 0.7% in Q1. From Briefing.com:
As Briefing.com points out, the 1.1% decline in retail sales is the biggest quarterly drop since the Great Recession. Then, thanks to the dollar’s lofty levels, there’s the continuing plunge in exports…
Given all the above, we’re left to wonder whether SPX can defy week-end and month-end convention of a stirring display of all-is-well-ism and follow through to the downside.
As usual, USDJPY holds the key. continued for members…
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