Stock Market Retracement Stronger than Expected
Stock-Markets / Stock Markets 2014 Sep 27, 2014 - 12:28 PM GMT
After the abject failure at the 50-day this morning, I thought that the SPX decline was in the bag. But that was not to be. It turned out that this morning’s ramp was only Micro Wave a. Since then, SPX has done a 61.8% retracement of sub-Minute Wave (i).
However, it also works as a 38% retracement of the entire decline, which also suggests that the decline from top to bottom may be a Minute Wave [a] with Wave [c] coming next. I will leave the wave structure on the chart for now, but it may be subject to revision.
Louis Gave submitted a piece on the rise In Volatility in equities. He says, “First it was the foreign exchange markets, then commodities, followed by fixed income markets. Now it’s the equity markets. Wherever we look, volatility has been creeping higher. To some extent, this is not surprising. At the end of the US Federal Reserve’s first round of quantitative easing, and at the end of QE2, the markets wobbled. So with QE3 now winding to a close (and with the European Central Bank (ECB) still behind the curve), a period of uncertainty and frazzled nerves should probably have been expected.”
MUT make a weaker 50% retracement of tis decline. It appears that there may have fewer buyers of the dip this time in MUT. It has a very low target for this decline.
VIX broke through its Head & Shoulders neckline, which is unusual, but I will leave it as it stands. The retracement was a strong 70%, but that should not surprise us. ZeroHedge calls this a VIXnado. After all, it is Friday.
Tony
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