It was another wild and crazy day in the US equity market, with the sp'500 opening powerfully higher to an afternoon high of 1948, only to then see a severe collapse into the close. Despite the net daily declines, a bounce is still due, but from a double low of 1867... or 1820s?
re: US market - today's closing hour was unquestionably a total FAIL for the bull maniacs. The daily close is offering a 'hope' of a double floor of sp'1867, but it won't take more than a slight nudge under to spiral things lower across Wed' morning.
Primary target would be the Oct' low of 1820.
However, regardless of another day or two downside... we're due a major bounce.. one that - unlike today, will be sustained for some days.. perhaps even a few weeks... into the next FOMC of Sept'17th.
With the loss of the 3000 threshold, further core technical damage has been done. Yes, the PBOC have acted, and that will surely kick the China/Asian markets higher for at least some days, but broadly... the Shanghai comp' looks set for downside to around 2500.
I suppose a full retrace of the summer 2014-2015 ramp could occur... back to the 2000 threshold, but right now, I'd guess.. no.
re: Japan. The monthly candle is looking real ugly... and there is viable downside to 16500 in the immediate term. However, with the PBOC taking action, perhaps it will be enough to halt the current decline.. and bounce into September.
Update from Walker
For those with an hour to spare... worth some consideration
The only data of note is Durable Goods Orders.
*Fed official Dudley is speaking on the regional economy in the morning... maybe a few comments on int' rates might appear.
Eyes on the futures
With the closing hour train wreck, the US market is now sitting on the edge of another cliff. Of course, the PBOC have now taken action, and if China.. along with other Asia markets can rally overnight.. then there is high risk to the bears that US equities will resume higher tomorrow.. and sustainability so.
My best guess.. .we push back upward. However, my 3pm post was titled 'upside into the close'... so maybe you can dismiss my best guess for tomorrow.
*thanks for the emails/messages today... always good to hear from you.
Goodnight from London