The Next Tests

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Futures are flat following yesterday’s sharp selloff credited to the economic slowdown in China and hawkish Fedspeak. SPX closed below its 10-day moving average for the first time in 3 weeks, but is clinging to an important Fib level.

continued for members…ES is approaching a test of its TL off the Oct 13 lows. If it holds, we could get that Santa Claus rally typical of this time of year. Otherwise, there will be plenty of lumps of coal to go around. VIX also faces an important test: remaining below its SMA10. Currencies are currently showing support for stocks, with USDJPY and EURUSD both holding up relatively well and DXY’s bounce duplicating yesterday’s move.