Don’t Let Us Down

You can always count on the Fed, or so it seems.  As SPX was teetering on the brink of a 100-pt plunge the past couple of days, the Jackson Hole Gang came together to keep the dream alive.

To them, our modern-day rock stars, I dedicate this classic…

Interesting side note to this performance…  It was January 1969.  The Beatles were just about over.  They hadn’t performed together publicly for two years and were at each other’s throats as they struggled to finish “Let it Be.”

On a whim, they hauled all their equipment on the roof of their building in the dead of winter and performed for half an hour for startled passersby.  Finally, the police arrived and shut them down.  It was their last “concert” together.

I thought it apropos, as the Fed moves forward into the post-Bernanke era.

*  *  *  *  *

The eminis are up 6 points at present and have broken out of the latest falling channel.  This preserves the bullish purple channel we’ve been following, the path to new highs.  Whether the market will stay on that path is anyone’s guess.  But, for now, the market likes what it hears.

BTW, the labels above aren’t harmonic.  Just showing an A-B = C-D potential that illustrates our downside case — which is still on the table until ES breaks 1705.

UPDATE:  9:35 AM

SPX just tagged the top of the red channel at 1661.83.  We’re getting a pullback here that could still back test the IH&S neckline at 1655.  But, it’s just as likely the pullback is only to the broken yellow .786 line at 1660.  Staying long unless that level is taken out.

UPDATE:  9:54 AM

We’re seeing some weakness through 1660 and the 1658.92 high, so it appears a back test is coming.  Traders might want to play the pullback (I will) but it should pass.  The neckline is around 1655, and the white channel bottom is around 1653, so set your stops accordingly.

UPDATE:  10:08 AM

That should do it for the downside.  Back to a full long position at 1655, stops around 1652 (or the bottom of the white channel.)

I’ll take a moment and review the scenarios we’re watching — either of which could still play out.

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