The SPX Premarket is substantially down, lower than Tuesday’s low at 2128.84. It appears that, should the market open at this level, it may gap down beneath the 2-hour Cycle Bottom at 2125.33. A systemic unwinding may not stop at the September 12 low at 2119.12.

ZeroHedge reports, “Remember when two weeks ago the China Beige Book warned that "It’s A Lot More Negative Than People Think" in the world's second biggest economy? Well after months of complacency about the Chinese economy and financial risks emanating from its $35 trillion financial sector, overnight the world got a rude awakening when China export figures tumbled, signalling a deeper slowdown than many anticipated just as the Fed prepares to raise interest rates.”

VIX was remarkably resilient yesterday, in spite of the bounce in stocks. VIX futures are much higher and appear ready to break out. Whether it breaks above the Cycle Top resistance is yet to be determined, but it appears promising.

TNX has gapped down this morning, but needs to complete a reversal pattern to be convincing. A gap may either be filled or left open. One that stays open adds credibility to the reversal.

USD finally appears to have reversed course after spiking up to 98.12, near its Cycle Top at 98.49.

The Bearish Flag offers a minimum target near my original calculation of 89.49. However, there is added potential of a deeper low. The weekly USD chart shows its Cycle Bottom support at 86.87. We’ll know by early November.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals.

Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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