NDX has rallied marginally higher, turning the formation from January 6 low into a double zigzag formation. A regular correction is usually a single zigzag. We can infer from this action that the central banks are buying time, literally.

The thinking apparently is, “The more elevation, the lesser the decline.” Wrong!

The Cup with Handle formation is still intact.

SPX may also change its formation to a double zigzag, if it can probe above 2072.40. At this time it has five waves in yesterday’s rally, so that gives it a better than 50-50 probability it won’t go higher, but there’s no rational explanation for this market.

The Hi-Lo index is right at daily mid-Cycle resistance, so this also can go either way.

Gold made a new low at 1223.30 this morning, confirming its deflationary decline is in motion.

Crude has declined to 48.80 and appears to be joining gold in yet another deflationary decline. ZeroHedge is a little “tongue in cheek” on their comments, “We previously detailed the manipulations("spoofing") that has occurred in oil futuresbut yesterday 'took the biscuit' in the outright bluntness of the algo's efforts to manage WTI Crude. As Nanex exposed, a 'wild HFT algo' oscillated oil 21 cents a dozen times in 18 seconds and the 'spoofing' continues. It appears though that after the squeeze of the last week, selling pressure has returned with WTI testing the $48 handle once again. But, but, but, the man on the TV news said oil prices had stabilized and bottom'd... it appears "it's a Brian Williams world" as business media anchors mis-remember their exuberant bottom-calls from last week.”

Despite the algos having their field day, the decline appears for real.

Regards,

Tony

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