Yesterday was one of those “will she or won’t she” days, with SPX dancing around the SMA50 all day long before finally nearly tagging our upside target at the white .886 (2054.74 vs 2055.08.)
We expected a sell-off to the white .618/SMA10 combo at 2032 at that point. From the 3:37 update in yesterday’s members’ section:
Just came to within .34 of the .886. It’s worth shorting here for the move to 2032, but only with tight stops in case they ramp it up overnight. As before, keep an eye on the SMA50 at 2044.
It got down to 2036.72 before a last minute blip higher in USDJPY provided a lift. And, as we suspected, they ramped it up overnight. E-minis are currently showing a 14 point gain that seems to be waning as the opening bell approaches.
Note that, for all its threats to break out, USDJPY continues to follow the purple channel top lower. That hasn’t stopped it from providing timely boosts when needed. But, the effect will be limited until a breakout occurs — if it does.
A troubling development for bulls: VIX.
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