Futures sold off sharply overnight when rumors surfaced, indicating the coming GOP tax plan will feature temporary tax cuts for corporations. Powell’s rumored appointment was fuel to the fire. The dollar dropped like a rock, which sent USDJPY plunging below technical support. As it so happened, it was the sell off that was temporary.
ES, which reached 2585.5 as SPX tagged our 2587.55 target, spent the rest of the night in intensive care. As I write this, DXY and USDJPY have recovered most of their losses and ES is back to even.In the old days, when central banks didn’t guard against every little dip, ES’ drop to its .618 at 2563.50 would have presaged a similar retrenchment for SPX (2565.18.) With multiple targets at 2565 and below, what are the chances?
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