SPX Premarket is higher by 18 points at present. However, it had declined in the overnight futures to the cash equivalent of 2006.00, then rallied higher from there, fulfilling the requirement for Wave b and launching Wave c.

The current price at 2043.60 is only the Fibonacci 23.6% level. As mentioned yesterday, 1970.03 (at the same level as the 4.25-year trendline) is the 38.2% retracement level.

Usually the State of the Union Address is greeted with a barn burning rally, regardless of the longer term direction of the market. A concerted effort to sell the rally not only indicates a change of attitude in the market, but also a disenchantment of the powers-that-be on Wall Street.

The rift between Wall Street and Pennsylvania Avenue is best in this morning’s ZeroHedge article from a Rabobank analyst.

TNX may have just completed a new reversal pattern into Wave iii of (iii) of [c] o 3. This is one of the most bearish combinations you can imagine. If this is so, the SPX rally may not have much of a leg to stand on.

USD just made its retracement high at 99.13 and appears to have begun its Wave [iii] of 3 decline as well.

Gold may also have complete its Wave iv of (c) low and may be ready for its final push to mid-Cycle resistance at 1132.98.

Crude appears to have completed a Wave (i) of [iii] of C of (3) at 30.41 and is in retracement. Its current level is 31.88, just ticks above its Cycle Bottom at 31.84. The 23.6% retracement for WTIC is 32.34.

This moves may simply not be tradable. If my assessment is correct, anyone attempting to buy the dip may have his head on a platter.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

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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