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SPX hasn't yet reached an important area for support or trendlines. While that doesn't necessarily mean that the low isn't in, I'll be assuming that it isn't unless we see a conviction break on SPX over the 1515/6 resistance area. I'm torn as to whether the current topping pattern on SPX is a very ugly H&S or a double-top, but either way the high yesterday was a retest of the broken pattern support level. This is important resistance today:
If the top part of this chart looks bullish to you, then the stock
market and a sense that all is well in the financial system should not
look bullish to you. The next crisis would be indicated by the long
‘bowl’ shown on the chart turning up hard. Although right now, it just
continues to gently round upward, above a supportive moving average.
30 yr / 2 yr US Treasury spread w/ gold
Gold, now squarely a ‘risk off’ investment, should follow the curve
ultimately. Over the last 1.5+ years gold has shaken out the herd and
people who counterfeit official money have drawn that herd right back
into ‘risk on’.
It will errr, not end well.
The boyz ran out of runway, and had to throttle back for another try.
ES went lower after the open yesterday, but the positive divergence on the 60min RSI only increased in force and we are now seeing the bounce from that. It is possible that the retracement low is in, but I don’t think so, I have two main scenarios here and both are assuming that a topping pattern is forming that would target the 1460 ES area, which is a decent fit with the main downside targets that I was giving yesterday. The first option is that an H&S is forming, in which case the ideal right shoulder high would be in the 1511 area. The second is that we have seen the first high of an interim double-top, and if we see a confident break over 1511 today this will be my main scenario. That would obviously assume a test of the current highs. Here’s how that looks on the ES 60min chart:
The completely-battered miners sector is bouncing, and I suspect it'll continue to do so to give precious metals some relief from all the selling pressure. However, the miners sector is chock-full of stocks that are begging to be shorted once the horizontal levels (formerly support; now resistance) are reclaimed, such as this one:
For now, I'm standing aside, but once the bounce is complete, it's time to short the living daylights out of such securities. Miners are doomed. Big time.
