Yesterday saw ES and SPX zoom through our initial upside targets to tag our secondary targets — the IH&S targets we set back on Apr 21. More significantly, SPX finally reached the upside target we identified back on July 11 when a much larger IH&S Pattern completed. The instigator, again, was VIX which, unless it intends to make new all-time lows, is running out of things to break down through. The other big development this morning is the DXY breaking down and approaching our next downside target. This is allowing EURUSD to break out towards our upside target and USDJPY to (finally) approach our downside target.
As we surmised Wednesday, the falling red channel was busted and the SMA200 tag delay in order to get through the end of May on a high note and to ensure that the tag occurred on a higher low than it would have been back on May 18. I’ve left the red dot where the SMA200 was on that day.It still doesn’t bode well for equities.
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