ES tagged our next downside target this morning……tagging the 4319 target we posted back on Jan 3 [see: De Facto Shutdown.]

The only question now is whether stocks will get the big bounce they usually do after a 10% correction or whether they’ve come undone. In other words, I have this 1969 Guess Who classic on a loop this morning. The lyrics seemed especially apt for today’s equities market.

She’s come undone
She found a mountain that was far too high
And when she found out she couldn’t fly
It was too late

From the ain’t it cool department…Burton Cummings rocks a pretty convincing Seattle grunge look 50 years ahead of the crowd, plays a mean jazz flute (inspiring the future Ron Burgundy?) and scats in a frickin’ rock song.

continued for members…

A big enough bounce right here would make for a very nice, very large H&S targeting 3878 – about a 20% correction. Whether or not that occurs, it’s pretty clear that the rising white channel has officially broken down. The ES version:

COMP argues for more downside.

All this has happened without USDJPY or EURUSD breaking down… …or DXY breaking out.

And although CL has probably topped out here, it has yet to make much of a move. Imagine if it did…

Looking at the 10Y, I believe it will. Yields have fallen off their highs, but it’s a long way to 1%.  Remember, the idea is to scare the crap out of equity investors, sending them scurrying into the bond market and driving rates much lower.

I have multiple conference calls this morning, will be back by the end of the day.

GLTA