Mandates

When markets are no longer free and open, it’s not that difficult for governments to mandate an outcome.  The Chinese have graciously (and, clumsily) provided a thrilling front row seat to what’s been happening in a somewhat less blatant fashion in Western markets for nearly seven years.

SPX came within a few points of our 2039.66 target yesterday, despite a 4-hour seventh inning stretch that wasn’t enough to stem the selling pressure.  Thank God for the overnight session, right Janet?  Our last words from yesterday’s members’ section:

I like the idea of a close at 2039.60.  That way, SPX closes below the SMA200, sucking in tons of bears who aren’t aware of the Fib picture just in time to sucker punch them with a big ramp job in the morning.

SPX only reached 2044.66, not 2039.60.  But it closed below the SMA200, and no doubt sucker punched more than a few bears.

Overnight, the Nikkei [see yesterday’s update] got fixed…

2015-07-09 NKD daily 0615 …the USDJPY [see: yesterday’s update] got fixed…

2015-07-09 USDJPY daily 0615…and, with a 26-pt ramp job overnight, the S&P 500 might appear to be fixed.

It clearly closed below an important channel bottom yesterday.  But, for years now, these things have been easily fixed in low-volume overnight sessions.2015-07-09 SPX daily 0630SPX has a lot of backtesting to do, offering multiple bounce targets: the broken purple channel bottom from 2009 at 2070, the H&S neckline at 2075, the gray channel midline at 2087…the list goes on.  But, will it stay fixed?

continued for members


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