The Fed Chickens Out

By: Anthony_Cherniawski

SPX made a marginal new high this afternoon as the Fed “chickened out” on its rate decision.. This is one of the sloppiest Ending Diagonals I’ve seen in a while, but that appears to be the best fit. Wave [v] appears to be complete, so those who have stepped aside may re-engage their short positions.

Today is day 86 from the Brexit low. Usually that counts as a reversal high or reversal low. It appears to be a reversal high. It also counts as the first day of a Phase Transition. That means the decline may be a magnitude more powerful that what we’ve seen thus far. We may see this transition begin in the final hour, but especially overnight. Don’t be caught unprepared.

VIX also made a lower low, in the form of a double zigzag. This is clearly a Wave (B) pattern. It remains above the 50-day Moving Average and is on an aggressive sell.

TNX completed its retracement to its Cycle Top in an irregular correction, then broke down in a third wave of a lesser degree. I await the Wave formation, as I suspect that Wave 1 may be at the Cycle Bottom.

I will have a more complete statement in the Mid-Week report.

Regards,

Tony

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