Fourteen out of the last 22 sessions, the eminis have reversed at or passed through the 2.24 extension at 2728.79. There’s no question that it’s important. The question is whether stocks are ready to push on through or need to gather more momentum first.
Our analog [see: Analog Watch, Feb 6] has been very accurate on price targets over the past month. But, the timing differences have been somewhat nerve wracking.
We’ve finally reached Day 16, which was supposed to be a peak for VIX and a bottom for ES/SPX. But, with ES having already tagged the bottom of a well-formed channel (less so for SPX), it’s entirely possible that the inflection point simply came early.
Watch VIX, as always. But, we should also pay close attention to the currencies today. Day 16 was supposed to see some pretty dramatic moves which, if they play out, could mean some nasty surprises ahead for equities.
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