USDJPY led the way yesterday as expected.  The channel dating back to Nov 7 looks to be breaking down — or at least tilting.

The task now for equities will be to maintain downward momentum in the face of all the FOMC cheerleaders out on the talk circuit and auto sales data puffery.

So far, the emini’s ramp job looks like a back-test of the broken red channel, but we’ll have to wait and see.

continued for members…

Whether we’ll see another leg down before a deep retrace is open to interpretation.  But, when a major Fib level is ignored as was the 1.272 at SPX 1823, a backtest of the Fib level is quite common.  Yesterday’s low came close at 1827.74, but didn’t quite reach it.  And, it was only a 23.6% retrace of the moon shot from 1767.

But, I like the idea of a wave down to 1823 — wherever it goes from there.  And, if we want to get downright bearish about things, there’s always this count…