SPX appears to have crossed beneath its neckline and may be challenging its September 29 low at 1871.91. A fall beneath the August 24 low at 1867.01 may release a barrage of sell orders, driving the SPX to the final support level at 1820.66 made on October 15, 2014.

Whether intentional or not, this may trap a lot of bulls in a very dicey proposition. Hoping for a bottom today is not a viable strategy. Today’s outcome was amply suggested yesterday by the Hi-Lo Index, which closed very near the bottom of its range at -698.00.

ZeroHedge Writes, “Yesterday, when looking at the market's "Bullard 2.0" moment, which was a carbon copy of the market's kneejerk surge higher response to Bullard's "QE4" comments from October 17, 2014 (at least until just a few minutes prior to yesterday's market close when suddenly selling pressure appeared), we said that either the S&P would soar - as it did in 2014 - hitting all time highs just a few months later, or the "Fed is now shooting VWAP blanks." Judging by what has happened since, in what may come as a very unpleasant surprise to the "the market is very oversold" bulls, it appears to have been the latter.”

TNX is in a remarkably similar situation to the SPX. However, its Head 7 Shoulders neckline is currently at 19.50. Crossing beneath the 2% yield level is something not seen since last October.

ZeroHedge reports, “Since The Fed unleashed its liquidity-withdrawing, confidence-inspiring, inflation-creating, growth-related rate-hike, things have gone a little bit pear-shaped for the policy-makers-in-chief. Gold has soared, stocks have plunged, but perhaps most ominously, bond yields have collapsed as policy-error (or naked bathers) are exposed. 10Y yields are down a stunning 33bps from The Fed decision, breaking back near the crucial 2.00% for the first time since October. The odds of a March rate hike are now under 25%!!”

VIX futures have visibly broken out above the inverted Head & Shoulders neckline, giving yet another confirmation of the increased intensity of the new trend.

The Empire Fed is now crashing at the fastest pace “Since Lehman.”

SKEW, which is an indicator of heightened preparations for a crash, has been probing its highs again recently. Yesterday’s bounce may have dampened the preparations, which now can be seen as a probable mistake.

WTIC is again probing the depths as it is now trading at a new low of 29.64.

It’s not just crude oil. The CRB is trading at depths not seen since the 1980’s. Unfortunately, StockCharts’ information does not predate 1990.

Regards,

Tony

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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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