As humankind’s only hope for survival gather in Jackson Hole this week, we’re left to wonder whether faltering currencies, teetering emerging markets and soaring interest rates mark the beginning of the end.
We’ve examined the downside case in detail. Yesterday, we took a good hard look at the upside case — hoping that the FOMC’s Jully minutes would settle the bet. It didn’t.
We continue to wait for a sign. SPX has expanded the channel that took prices from 1343 in Nov 2012 to 1687 in May 2013. It’s perched now on the precipice of that channel. If the Jackson Hole Gang can shoot straight and the channel holds, SPX 1823 is right around the corner (Zweig Breadth Thrust, anyone?) If not, it’s a long way down to 1553.
I remain full long from 1642.36 at yesterday’s close.
UPDATE: 9:20 AM
Ten minutes from the opening bell… the dollar spiked earlier but has settled back without having made a higher high.
The USDJPY has made a new high, and just tested the purple channel midline after breaking out. Possible Crab Pattern? At the very least, it should hold value over the coming days as it seeks out the .786 or .886 at 99.05 or 99.46 to back test the white channel and the purple channel midline.
The big question, of course, is whether it can retake the purple midline or even the white channel. Keep your eye on the falling white channel, as a break out would bode well for the large purple Butterfly or Crab Pattern completion at 106.43 or 109.47 (a favorite bullish target for quite some time.)
The eminis are up about 8 pts. SPX should open strongly. The first test will come at the grey channel midline around 1648. After that, the red channel midline is at 1651.47 and the IH&S neckline is at about 1656.
The right shoulder was a little deeper than I expected; but, the pattern continues to look like a good possibility.
Just realized today is composer Claude Debussy’s birthday. He’s one of my favorite composers, and his popular Claire de lune is one of my all-time favorite pieces. It’s played here by Victor Borge, celebrating his 80th birthday. Judging from his unusually reserved presentation, I’m guessing Claire de lune was one of Borge’s favorites, too. Enjoy!
UPDATE: 9:45 AM
Just tagged the red midline. We’ll watch for signs of a pause here.
I’ll try an interim short position here at 1651.69. Should be good for 5-6 points. Stops at 1652.
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