SPX appears to have formed either a Broadening Wedge (Target ~ 1522.00) or an Orthodox Broadening formation (Target ~ 1458.00). SPX may ramp all the way to its Intermediate-term resistance at 1937.31 before rolling back over, should the second formation prevail. There are tremendous market forces at war with one another, but ultimately the trend wins.

Remember, the next Master Cycle low isn’t due until mid-October. A lot may happen between now than then.

VIX is struggling and may decline to its 50-day Moving Average, as described earlier. That would move Wave 2 to today, should it happen. The odds favor the rally, but this weekend we may see a Trading Cycle (minor) low…or it may have happened at yesterday’s close.

The Hi-Lo Index is still moving down…

And TNX is bouncing off the neckline. UST futures appear to have broken out, so this battle may have already been lost for the bond shorts.

ZeroHedge reports, “Bloodbath for a near record short net Treasury speculative position as rate-hike odds collapse and the entire UST curve plunges. The belly is collapsing 13-15bps (biggest drop in 5Y and 7Y yields since January) and the long-end is dropping significantly. Between the 10Y highs of 2.0597% and lows of 1.9022%, the drop was 15.75bp - that is the biggest intraday drop since Sep 18, 2013, the day the Fed did not Taper.”

Gold is still near its high, while crude oil has sold off to 44.00 from 45.02 at yesterday’s close.

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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