SPX had little trouble reaching our downside target yesterday.  As we noted before the open:

Today, we see a capitulation of the USDJPY ramp job that dragged stocks out of their post-Brexit malaise.  It should be enough to allow SPX to finally backtest some of its moving averages, the closest being the SMA20 at 2082.

SPX tagged 2080.86 before the usual CL and USDJPY ramps prompted an 11-pt rebound into the close.But, the ramp jobs didn’t last.  And, in fact, their continued weakness suggests much lower lows to come.

continued for members…

Note the attempt to cast the sell-off as something quite mild, with little “crash” potential. But, CL’s sharply rising purple channel is in danger of breaking down. And, USDJPY’s isn’t far from its post-Brexit lows.Unless one or both of them turn around soon (and, not just intra-day) then the bullish camp had best get ready for a long, ugly decline.

Look for SPX to try to contain this morning’s losses to the channel bottom.  I expect new lows, with the SMA50 at 2076.59 and the SMA10 at 2072.28 as the next mostly likely targets.  If USDJPY and CL rebound as they did yesterday, the falling channel should hold.  If they don’t, then the red .618 at 2071.32 is the next bogey.

I have some meetings this morning.  I should be back around 11:30 ET to post the big picture update.

UPDATE:  12:00 PM

Big picture update posted at: https://pebblewriter.com/the-big-picture-jul-1-2016/