At critical times I check the daily against the hourly and 2-hour charts. To my surprise, the Diagonal trendline had drifted lower than it should have. I have corrected it because I had discovered that on the daily chart the SPX gap down had opened beneath the trendline! That suggests that the potential retracements may not go back above trendline resistance near 2390.00.

Crossing the trendline may give us more confidence than indicated earlier. This appears to be a confirmed buy signal with the potential limitation on the bounce-back.

It appears that SPX may have made an impulsive decline on a shorter time scale. If so, a bounce may develop here.

VIX has already exceeded the Head & Shoulders minimum target of 12.90 and is on a confirmed sell signal. This market is moving much faster than I have seen in a while.

The implications for a decline through options expiration, especially quadruple witching, are enormous. Strap yourself in and enjoy the ride.

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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