At last there may be some resolution to this rally. The Triangle formation is an introduction to the terminal thrust for this rally. A Triangle formation also suggests this may be the last of the rallies. I drew the upper channel trendline in the same manner as the 2-hour chart. It shows a probable terminus of the last thrust closer to 2185.00. Given the rise in volatility that the Fed meeting may engender, it may be a more likely top than the minimum 2180.00 that I mentioned yesterday.

This morning ZeroHedge reports, “Following a rollercoaster night for the Japanese Yen, when following several media headlines Abe was said to have announced a stimulus package that would be more than JPY28 trillion, which however upon more careful reflection appeared less then met the eye (more in a subsequent post), Japanese stocks surged 1.7% while the USDJPY spiked but well off overnight highs, pushing risk assets higher.”

Apparently the Yen gave traders a rollercoaster ride last night.

TNX appears to be nearly done with its retracement. There may be one final thrust lower, then a probable rally to the 2-hour Cycle Top at 17.33. This supports the observation that the SPX has a final move to the upside in tandem with TNX.

European financials are about to take a hit this morning as Deutsche Bank profit plunged 98%. Unfortunately, the future looks even worse.

Not surprisingly, BKX appears to be in similar straits. We may see BKX start its decline today as SPX finishes its speculative rally. BKX is still a leading indicator due to the large presence of financial stocks in the SPX.

Regards,

Tony

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