SPX tagged our target at the white .886 yesterday and rebounded sharply. As discussed, though, the grey Fib charts remain a potential path to further downside: the .786 at 1798 and the grey .886.
UPDATE: 11:45 AM
Stocks got a nice bounce thanks to rumblings of QE4 by Jim Bullard. But, they’ll have trouble keeping the bounce going without USDJPY, which has backtested and is currently stuck below its SMA50. Note that it’s still north of the grey channel midline, though. So, we have to treat that as support for now.
Note that the gray channel dates back to late 2010, so this might serve as a significant line in the sand. But, then again, so is SPX’s 1.272 extension at 1823. Former overhead resistance — which was ignored on the way up — don’t be surprised if it becomes formidable support.