The decline/retracement pattern is clearer now. Wave 1 bottomed at 2241.77. The additional decline was an extended Wave [b]. The five Waves necessary to complete [c] appear to be finished, although the Model suggests the SPX may linger in a small bounce for another hour. A decline beneath the mid-Cycle support at 2254.65 may be another short entry/sell signal.

The VIX sports a similar pattern to the SPX, although inverted. The fact that VIX isn’t being pounded into the ground attests to its probable change in trend and accumulation thereof. At this point, the decline has only retraced 45% of the rally. This attests to the accumulation of hedges by some very smart money.

The Hi-Lo has gone back above the mid--Cycle support/resistance at 120.41. I would consider this to be a “neutral” position unless there is a breakout above its prior high at 245.00.

USD rose to a new high at 103.81. I had calculated that the high at 103.62 was Wave 5 of (5). It now appears that it was too short. Wave 5 equals Wave 1 of (5) at 104.40, instead.

It appears that the USD may rise through tomorrow while TNX may continue to rise through the end of the week or very early next week.

Regards,

Tony

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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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