Before taking a look at SPX, I think it is worthwhile to look at Euro. Euro broke under 1.0728 this morning and is now retesting the low from the 13th. I’m being a little stubborn here and allowing for a more complex wave (ii) to form but certainly a bad omen in the bigger picture for equity markets if Euro starts to accelerate lower. I suppose the alternative is that Euro is already starting down in the early stages of wave (iii).
Another thing I am interested in is crude oil, wondering if CL is leading the way for equity prices. So far, CL is trying to hold important near term support at 77.50. Bears hope that a lower high will develop on a small bounce to relieve the short-term oversold situation.
Now onto SPX, support from the chart posted last night at 4107 was tested this morning and resulted in a move up to close the gap to yesterday. Some bears dipped a toe in and sold the gap close, which is a understandable aggressive trade, but I think it too early for bears to get excited. It looks like 4127 can be recovered which will be a negative for bears. As I’ve said before, I’d like to be bearish but don’t want to be early. So far, bulls have yet to lose control which forces me to allow bulls to try to grind up a bit more
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