It’s gratifying when a model plays out nicely as this one has. But, just a reminder, it’s not over just yet. There are plenty of ways it could go sideways. CL and RB could continue falling after reaching our next downside targets, which could drive ES/SPX lower than our H&S targets.
From last week’s Trump: “Falling Oil Prices…That Was Me:”
And, ES this morning…
We’re now seeing the unintended consequences of Trump’s mini-crash in oil prices. Not a great mystery — though attaching his name to it might not have been the smartest move. As stocks continue to fall, however, look for the Fed to shoulder more and more blame.
Tie in the strong decline suggested by our yield curve model, and this was not a terribly difficult forecast. The tricky part lies ahead: what will COMP do when it reaches our 6730 target from Oct 12 [see: Are We There Yet?]
Then…
…and, now.
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