The Pre-market (delayed) is down .8% as I write, while the futures are down over 1%. This puts SPX below the hourly mid-Cycle support at 1957.39. Try as hard as I might, I could not get an impulse out of this week’s decline in the SPX, although the other indexes may easily be impulses. There are five declining waves, but the third is the smallest, which is a no-no in Elliott Wave parlance. The alternative to a Minute Wave (a) is a probable extended Minor Wave 1. Yesterday’s bounce did not overlap, suggesting impulsive qualities that could lend to an extended decline.

Initial jobless claims beat their estimates, so what could be wrong with this picture? The answer lies with Espiritu Santo, a major Portuguese bank that has been on the ropes for several months.

But... but... the VIX said everything is ok, and European rates were the lowest they have been in centuries... How can something possibly go wrong?

It just did.

Isn’t it nice to be warned of a trend change before it happens? This morning’s futures suggest VIX may have broken above its prior highs and appears to be challenging Cycle Top resistance at 12.79. This is nearly a 10% move just in the morning futures.

Remember, the Hi-Lo index remained onits sell signal throughout yesterday’s bounce.

TNX did not make a new low, despite the frenzied commentary to the contrary. This is a very deep correction, but stikk a correction, nonetheless, until proven otherwise. If this is a false flag, then it will only trap more investors on the wrong side of a larger move yet to come.

Gold futures ramped to 1346.10 this morning. This may be another false flag for investors who have been doggedly waiting for their rally to save them from their losses. Yesterday was a Pivot day. The next Pivot will be over the weekend. We are is some sort of extension that can happen in a Wave B. I am not expecting a breakout above the 1392.60 high.

Regards,

Tony

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