Yankee great Yogi Berra famously advised that “when you come to a fork in the road, take it.” The S&P 500 is weighing such a decision this morning, having closed Friday at a critical level of technical support.  A rebound from here would buy the Fed a little more time for inflation and hawkishness to ebb. A failure to bounce implies at least another 8-10% downside.

Which will it be? Fortunately for us, our chart patterns are sending a very unambiguous signal.

continued for members…Note that ES and SPX have finally got all their ducks in a row. The SMA10 is below the SMA20 which is below the SMA50 which is below the SMA100 which is below the SMA200. When these moving averages all align bearishly, it is quite rare for markets to rally.

The more uncertain question is that of timing. ES is again backtesting its broken red channel. Will it wait until after the Fed meeting to break down? SPX appears less uncertain. BTW, COMP is similarly bearishly aligned……and VIX is similarly bullishly aligned: SMA10>SMA20>SMA50>SMA100>SMA200. Note that the TL of overhead resistance from Jan 24 is just above at 35.89. EURUSD and DXY still have further to go, which should add to equities’ troubles… …and would require a major move on the part of USDJPY – already near strong resistance – to mitigate.While gold is closing in on our SMA200 target……SI has broken down. …and BTC is between a rock and a hard place” the SMA10 above and flag bottom below.CL and RB are off again this morning, with CL getting the worst of it with a 3% slump.

But, it’s not enough to stop the 10Y from pushing past its .886 Fib yet again. It’ll be very interesting to watch CL/RB once the 10Y reaches 3.25%. I’ll be out of the office most of the day, will try to post sometime around the close. GLTA.