SPX rallied to the Broadening trendline, then began impulsing down. The wackiness may be over and the puzzle appears solved. This may actually be a point 7 (an extra zigzag) within what is normally referred to as a five point reversal. All moves within the Broadening formation are corrective, which makes the outcome confusing and uncertain…until it is over.

The NYSE just announced “technical issues” as the market turned red this afternoon. However, sending in the algos may not save the day.

The next decline may be memorable.

TNX has stayed neutral most of the day. However, it appears that it may change very quickly.

ZeroHedge writes, “The S&P 500 is currently down a little over 7% YTD and 11% of the May 2015 high. Unfortunately, all signs coming out of the bond market are signalling a further fall in equity prices.

The spread between AAA rated corporate bonds and the 10-year treasury bond has blown out to 213 basis points over the past couple weeks. This is the widest spread since September 2011, during another period of market turmoil.”

USD appears to be consolidating in a narrow range beneath mid-Cycle resistance at 96.98. It may push up to or above mid-cycle for a day, but may resume its decline to the Cycle Bottom to complete Wave [iii] in the next couple of market days.

Regards,

Tony

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