SPX spent the overnight session challenging the upper trendline of its Orthodox Broadening Top at 2165.00. It currently appears to have fallen back beneath it.

ZeroHedge wrote at 6:55 am., “In a mostly quiet session, European and Asian stocks rose, pushed higher by financial stocks and the USDJPY which initially dipped on some hawkish comments by BOJ deputy governor Iwata, only to rebound later in the session, lifting the Nikkei 1.1%, while the Stoxx 600 rose 0.4% led higher by the banking sector. S&P futures are unchanged after yesterday's last hour ramp. The key event is the BOE decision due in half an hour, which saw the pound dip initially only for cable to regain all losses in recent trading, despite a 100% price in expectation that Mark Carny will deliver the first interest rate cut in seven years.”

10 minutes later, it wrote, “s expected, the Bank of England unanimously cut rates for the first time since the financial crisis by 25 bps to a record low 0.25%. However in a somewhat surprising move, the BOE also expand its QE by £60 billion to £435 billion in a 6-3 vote, of which up to £10 billion will be in the form of corporate bond purchases, as we previewed last night. Overall a very dovish decision, with Mark Carney providing more monetary stimulus than many had expected, sending sterling plunging and the FTSE100 surging.”

This sent the Pound Sterling back down to challenge its Cycle Bottom at 131.79. A little further below is a Head & Shoulders neckline that may send the Pound down even deeper.

ZeroHedge again observes, “All the speculation that central banks are putting the brakes on unconventional monetary policy and shifting to fiscal stimulus demands, were tossed aside this morning when the BOE launched what was been dubbed a "kitchen sink" response, one in which it not only cut rates for the first time since the financial crisis, by 25 bps to a record low 0.25%, but also boosted QE while announcing it would resume corporate bond purchases.“

USD rallied toward its Intermediate-term resistance at 95.97 on the announcement. The retracement may now be complete, or nearly so.

This has had a deleterious effect on the USD/JPY. Should it decline beneath 100, we may see liquidity dry p in the markets.

TNX has now resumed its descent beneath mid-Cycle support at 15.32. It next potential measured target (12.88) appears to be beneath the Cycle Bottom support at 13.45.

Regards,

Tony

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