With the future of the human race at stake (ok, maybe just a few percent off the S&P 500) Congress will probably give us their usual “they gave us no choice” solution (not) sometime after the deadline. That doesn’t mean they will resolve anything (why start now?) and it certainly doesn’t mean the market will take it all in stride.
There are a number of bearish patterns setting up in the markets that should, at the very least, put a scare into folks. The USDJPY has completed yet another H&S Pattern (yellow) within the right shoulder of the very large red H&S Pattern.
Interestingly, the gap down has stopped short of dropping through the IH&S neckline. So, the jury’s still out on the potential for a vicious drop. I suspect the pair will find its way down to the big red neckline or the yellow channel midline before long — perhaps getting a bounce off the falling white midline. In any case, there’s a great deal of support in the 94.66 – 96.34 range.
The E-minis are selling off nicely this morning, with the original white .886 in danger of failing. At the very least, I expect the purple channel bottom to be tested (1664ish.)
Note, the bottom of the purple channel caught the falling knives of Nov 2012, Dec 2012, Jun 2013 and Aug 2013. So, it has a pretty good pedigree. But, of course, a tag of the white channel — our downside case at 1590 for quite some time — remains on the table.
continued for members…
Sorry, this content is for members only.
Already a member? Login below…