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Yesterday was a strange day, with SPX tagging our downside target (after an 18-pt spike that instantly reversed itself) and then going on a 25-pt tear led by ramp jobs in both USDJPY and CL. It was just what the doctor ordered. From our initial post:
The futures gave up almost 30 points overnight, but signal a small gain at the open. SPX needs all the help it can get, as a drop through the white channel bottom would likely mean 1991-1996 for starters.
Today should be about positioning: the bulls for a breakout and bears for a breakdown. With the futures up 22 points before the open, it’s pretty clear who has the upper hand in the after hours. But, it’ll be interesting to see how things go once the rest of the world arrives and thinks long and hard about event risk.
Note that USDJPY bounced off the bottom of the channel from 2012 yesterday. The two previous bounces were Aug 24 and Oct 15 — not shabby entry points. Today, it’s all about the 100 and 200-day averages.
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