SPX closed just beneath its Diagonal trendline. Over the weekend, SPX futures were down as many as 10 points before recovering to breakeven this morning. The Premarket is mildly positive (+1.00), but does not appear to have thrown back into the Diagonal at this time. Odds seem to be in favor of a further decline this morning. If so, there is a probability of testing Short-term support at 2039.18. However, should a further bounce occur, SPX overhead resistance appears to be between 2086.20 and 2089.00.

ZeroHedge reports, “On a day full of Manufacturing/PMI surveys from around the globe, the numbers everyone was looking at came out of China, where first the official, NBS PMI data disappointed after missing Mfg PMI expectations (3rd month in a row of contraction), with the Non-mfg PMI sliding to the lowest since 2008, however this was promptly "corrected" after the otherCaixin manufacturing PMI soared to 48.3 in October from 47.2 in September - the biggest monthly rise of 2015 - and far better than the median estimate of 47.6, once again leading to the usual questions about China's Schrodinger economy, first defined here, which is continues to expand and contract at the same time.”

Another article to read is US Equities’ Rebound Is Hollow Inside.

We also see a bounce in TNX this morning, apparently for the same reasons as SPX coming off its lows in the futures.

VIX is challenging its upper trading channel trendline. A breakout becomes more apparent above 15.46. The VIX daily mid-Cycle resistance is at 16.25, where the buy signal is confirmed.

Gold is down, having declined this morning to 1136.50, clearly beneath its 50-day Moving Average at 1141.09. If my reading of the Cycles Model is correct, gold has an entire month of decline ahead of it. This will not bode well for those who believe that gold may rally to new highs.

Industrial and agricultural commodities all appear to be on the same path as gold.

All the best,

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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