TPTB had two simple goals yesterday: get SPX back above its moving averages and bust the falling channel it’s been in since May 20. They succeeded on both counts.
We’ve seen this countless times over the past few years since algorithms and HFT took control of the “market.” Ramp the eminis an inordinate amount (usually on nominally bullish headlines) and, once the cash “market” opens, HFT the crap out of it — a nickel and a dime at a time — until a well-established pattern is busted and/or a moving average is topped.
It’s more subtle than the Chinese technique of prohibiting stock sales. But, in the end, it’s manipulation just the same. And, it has turned our normally functioning market into a “market” — where plunging retail sales don’t matter at all.
TPTB also succeeded in tagging both our upside targets — the most obvious on the chart. From yesterday’s members section:
The first hurdle will be the falling red channel top at 2094-2095 (also the SMA100 @ 2095.16) with a secondary target of the .618 at 2100 (also the SMA50 @ 2099.75.)
The important question we’re left with is whether yesterday’s algo-driven chart busting exercise will hold, or whether it’s more akin to the Jun 18 incident that began in much the same way but resulted in an 84-pt plunge.
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