Q4 GDP also missed as exports tumbled. ZeroHedge reports, “It appears that Deutsche Bank's warning that the global economy is about to roll over was spot on, because moments ago the Bureau of Economic Analysis reported that GDP in Q4 rose only 1.9%, barely above the lowest forecast of 1.7%, and below both the consensus estimate of 2.2% and the whisper estimate of 2.5%-2.6%. The reason for the big miss, and nearly 50% drop from the 3.5% print in Q3: a collapse in contribution to GDP from trade (net exports and imports) which subtracted a whopping 1.7% from the headline number. So much for that bumper soybean boost to the US economy.”

The positive overnight action in the SPX futures is now over. We still need a decline beneath the Cycle Top at 2289.64 in the 2-hour chart (2291.61 in the daily chart). For an aggressive short. The assumption is that the SPX may retest that area as a new resistance after the decline beneath it.

Today is an interesting day, because it offers a Primary Cycle turn, which is one of the strongest indicators of a probable change in trend. It may be that SPX could still rally to its “natural” target (where Wave (C) equals Wave (A) before the reversal takes place. We must be ready for a variety of possible actions before the actual reversal.

VIX is flat-lined this morning. More to come later.

The Hi-Lo made a wide move yesterday, but closed above its 50-day Moving Average and mid-Cycle support/resistance at 123.18.

TNX is tentatively moving lower this morning after yesterday’s well-attended auction. It appears that money flows are now risk-adverse.

Regards,

Tony

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