As our analog suggested, the bounce continues as expected despite a spate of mixed signals and general bad vibes from the politicians and persistently inverted yield curve.
continued for members…USDJPY, CL and VIX are all now contributing to the bounce. Our primary target is SPX 3004ish with a lower secondary target around 2984.
USJDPY bounced nicely and is hanging around in case it’s needed for more assistance.
CL continues to backtest the yellow TL but could push up to its SMA200 at any time.
And, VIX is pressing lower with a channel breech and dip below the SMA200 in the cards.
The outlook for stocks…
UPDATE: 12:35 PM
SPX/ES are having a rough time of things, with small, internal trend lines of support breaking down. While it’s true the original analog turning point was Aug 27, the 2.2% bounce off the bottom (so far) falls far short of the 5.5-6.0% the analog suggested. The other recent bounces also fell short of targets, but not this far short. 
I have long assumed that the Fed and other central banks would either actively pull the rug out from beneath Trump — or would at least fail to lift a finger to help him get re-elected. But, I’m surprised to see Bill Dudley so publicly advocate for this approach. I think some investors are probably wondering whether the strategy might play out and, as a result, are reining in their risk. The fact that the yield curve remains inverted definitely isn’t helping.
If TPTB are going to salvage a push to new cycle highs, this it the time. VIX is the instrument.
UPDATE: 3:50 PM
SPX is struggling mightily just to maintain a 10-pt loss on the day. Either the bounce is over or this is a really good head fake. VIX has not only not broken down, but it’s threatening to break out.
While USDJPY has failed to retake even the SMA10. 
Likewise for CL, which tagged but couldn’t push past its SMA10.
This leaves SPX hanging on for dear life at its SMA5 200 and quite likely to close in the red.
As negative as things feel at this time, I feel obligated to point out that the two previous plunges — Aug 5 and Aug 14 — were followed by two volatile sideways sessions which were then followed by a big gap up on the third session.
The other thing worth pointing out is that every time I think the analog is about to break down (it will, eventually) it manages to pull things together — typically in an abrupt and violent fashion.