Odds are running high that the retracement rally may be over already. SPX appears to have completed a 23.6% retracement and may be ready to resume its decline. Note the reversal in the RSI at 50. This is another possible signal of a strong decline (Waves 3 or C).

Confirmation is not yet in. We must see the 2-hour chart show the SPX price level stay below 1927.65 and below the daily Cycle Bottom at 1926.30.

This appears to be the strongest January rally since 2005. While I cannot rule out an extension of the rally, we at least know where the rally isn’t, should the decline continue.

What puzzles me about this decline thus far is the lack of margin calls in the equities markets. At least no one seems to be reporting them. ZeroHedge also noticed that phenomenon and submitted this, “Here's a neat summary chart based on data from BIS through June 2015, covering total global credit (debt) outstanding (excluding IMF debt), issued in three main currencies:

That savage deleveraging... it has been truly epically... unnoticeable...”

TNX made a new low not seen since November, confirming the start of a possibly epic Wave (iii) of [c] decline.

Crude made a new low at 30.11.

Regards,

Tony

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