Dragging Warren Buffett out yet again to calm the markets… makes me wonder who they’ll get after he heads to that great big bridge game in the sky. Maybe this guy?
The SPX opened down, but is likewise getting support near its red .886. A substantial bounce here at the former lows could set up a head & shoulders pattern.
USDJPY is also being propped up at the former lows.
Coming up, price targets…(continued for members)There are a couple of different ways to draw the medium-term (since May 2013) channels. But, currently, the bottom of each gives SPX support near the white .786 at 1769.09 somewhere between Mar 17-20.
The real difference between the two channels is in the midline. The red midline is below at 1834ish, while we just back-tested the purple one. I think it’s prudent to assume the red one is in play until the market proves otherwise — meaning we could see a bounce at the former low of 1834. This would tie in with the similar situation in USDJPY (support at the former low of 100.74.)A close at or near 1834 would set up the most difficult situation going into the weekend, with event risk high and bounce risk (Fed/ECB/Buffet cheerleading) just as high.The white .382 is at 1827.93, and the big yellow 1.272 is at 1823.42, so I wouldn’t be at all surprised if we got a test of those lower levels. And, 1826.68 is the .786 of the drop from 1850 to 1737. Any of the three would work with the short-term white channel as drawn — putting in a tag on the lower bound.
Needless to say, if 1823 doesn’t hold, things get much uglier real fast — with that .786 at 1769 and then the big white channel bottom at around the former low of 1737 coming into focus. Best estimate: the white .786 at 1769.09 or the .886 at 1754.52. The white .786 has a slight edge in my mind because the move would equal the drop from 1850-1737.
The reality is that the white channel — coming up from the 666 lows in Mar ’09, has enough wiggle room in its placement that the actual bottom could be significantly different.
Would I go long there, knowing that things could get ugly over the weekend? Probably not. My charts still show much greater downside potential — though TPTB have done a great job of countering the chart patterns over the past 6 months. Probably better to be in cash over the weekend and see how things shake out.
UPDATE: 3:45 PM
SPX off 3 pts, DJIA off 27. Nothing’s really changed since this morning — mostly sideways as folks try to forecast the news cycle and TPTB are propping up everything. SPX and ES are being held above their short-term .886’s and Mar 3 lows (DJIA broke below Mar 3…)
The USDJPY hit 101.20 versus the previous low of 101.19. I mean, come on guys…at least provide the illusion of a real market.
I’ve looked at moving averages, clouds, RSI, etc. Bottom line, there should be more downside ahead. But, never discount TPTB. Lots of data and THE FED coming up next week.