ORIGINAL POST: 6:00 AM
SPX ended yesterday just below our 1497 trigger point at the neckline. I know the bulls would love to blow through this level and negate the H&S, but I think they’ve really got their work cut out for them, especially given the political mess in Italy and the looming US sequester.
Bernanke isn’t likely to say anything new today. And, judging from AAPL’s price action, the market isn’t looking to Cupertino for salvation. The durable goods data? Ho hum… Saying it was a good number if you ignore defense and aircraft is like saying a shark attack was fine except for those pointy things in their mouths.
Defense is due to get a lot worse starting next Monday.
I’d put slightly greater odds on a breakdown of the purple channel. As for targets, I’ve mentioned the 1474.51 level a lot – the Sep 2012 high and roughly where the SMA 50 was at the EOD (hat tip to Mike for the question.)
I still think this area has potential, as a retracement to the .886 of the 1576-666 decline would set up a move to 1576 itself. Why? Think of stair-steps, where each major Fib tag or break is followed by a back test to a significant lower Fibonacci level.
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