Yesterday’s forecast worked out nicely. Recall that this was the same scenario first laid out last Friday.
As such, I see no reason to adjust Friday morning’s chart/forecast: a test of the SMA20/50 — and a potential IH&S right shoulder if those don’t hold.
After SPX reached our initial downside target, we called for a bounce that was only slightly more exuberant than anticipated. Watching USDJPY, we noted:
It’s now threatening a breakout for the fifth time since early January. I suspect this one will also run out of juice, leaving SPX to backtest the rising white channel at around 2053 before heading further south.
SPX bounced off the SMA20 at 2040 up to 2055, then hung around while USDJPY teased us with the idea of a breakout — a breakout that failed yet again last night.
Our closing note to members was that SPX should be shorted overnight at 2053 by those with the stomach and the ability to watch/hedge such positions — a stance that’s looking fairly prescient with the e-mini’s off nearly 30 points just prior to the opening bell.
SPX is at our target of 2053. I’d short here with tight stops — but would strongly recommend cash overnight for those who can’t hedge or watch their position like a hawk overnight.
SPX looks likely to nail our next downside target in its opening move. We’ll update the charts shortly.
continued for members…
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