Good News Only Goes So Far, Stock Market Should Reverse Hard
Stock-Markets / Stock Markets 2013 Feb 27, 2013 - 04:35 PM GMTHere are two different takes on the Durable Goods Report:
(Bloomberg) Orders for U.S. durable goods excluding transportation equipment climbed in January by the most in a year, indicating business investment is holding up.
(ZeroHedge) As expected, the January Durable Goods was a big miss to expectations, printing at -5.2% on an anticipated plunge in aircraft orders, worse than the expected -4.8%, and a plunge from the downward revised 4.3% in December. However, where there was a glimmer of hope, was the ex-transportation number, which rose modestly from 1.0% to 1.9%, on expectations of a 0.2% flat print.
Of course, the headline reading algos don’t read ZeroHedge. The result is a low volume levitation into the Fibonacci cluster. This does not change my downside targets, which I will discuss in more detail later.
VIX has made a 68% retracement so far and appears that it will find support at the Broadening Bottom trendline at 15.30. This was my original assessment, but yesterday’s weak action had me thinking the correction was already over.
The overlap in the waves confirms my wave count nicely, so it appears we have an accurate grasp on the price movements.
Today should reverse hard, so I shouldn’t wait around to take action on the next big move higher in the VIX and down in the SPX.
Regards,
Tony
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