COMP has been one of those nonsensical indices that — just when you thought it was finished — always found a way to make new highs.  That was, of course, until August rolled around.

It broke down through every element of support we discussed in our last update: the rising wedge, the red TL, the 2007 high, and even the .886.  Most importantly, the red channel which has guided its incessant rise since 2009 finally gave up the ghost.

continued for members…

A month ago, we were still wondering which rising channel from 2009 would ultimately win out: the red or the white.Now, we have our answer.  The red one worked just fine for a long time, having proven its mettle in holding back last October’s plunge.  But on Aug 21 it finally yielded control to the white one.

Note that the Aug 24 mini-crash was stopped short of the .886 Fib and the white channel midline — the same one which has provided a bottom in every major dip since 2011.  This conveyed a sense, like SPX, of unfinished business from a charting standpoint.

Exacerbating the situation is the fact that the bounce since Aug 24 has reached, just today, the .618 retracement of the drop from the Jul 20 highs.  What’s more, it has backtested an important internal TL (yellow, dashed) connecting many key highs and lows since last November.It’s a precarious situation for COMP.  Any of those features could, alone, be responsible for a downturn here.  And, with the white .886 (4271.38)  intersecting the white channel midline in the next week or two, there’s a ready-made downside target.

If, on the other hand, the FOMC bails on the idea of higher interest rates in a couple of days, we could easily see all that resistance melt away.

Stay tuned.