sp'daily5c- the 3 warning levels.
Summary
I wanted to start the last post of today with something which I consider pretty pivotal. The sp'1900 threshold is unquestionably a key threshold.
In my view.. if we see any daily closes under sp'1900, it will open the trap door to a fast move to the sp'1650s - which remain a simple 38% fib retrace of the giant wave from Oct'2011.
1990s... then 1650s ?
The current 'rainbow' weekly candle remains green, and even if we close 1-2% lower by the Friday/monthly close, it will still be green. However, this is not unexpected, and it does not prevent the bigger bearish scenario.
sp'weekly7 - bearish outlook
I still think many are overlooking the importance of the initial break under sp'1900. That was a crucial support, and it was decisively broken. A great deal of technical damage has been done. The fact we've soared back over it, is not that concerning to me. Indeed... a ramp into the mid 1900s was expected.
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Looking ahead
We have the usual weekly jobs data, and Q3 GDP (first reading)... market is seeking 3.0%.. which seems a little overly optimistic.
Yellen is due to speak at 9am.. but it is not related to the Fed, and should have ZERO bearing on the market tomorrow.
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Still waiting
Today was interesting, but I didn't take any positions. With the new cycle high of 1991 in the morning, and weakness in the early afternoon, the smaller 5/15min cycles looked too low to launch an index short... so I held off.
Instead, I will look for a micro double top around 1990 early Thursday morning. If we get stuck there.. I'll start hitting buttons.. with a first exit target of 1925 or so.. within 2-5 trading days... along with VIX 20s.
Goodnight from London