Are we on the verge of a deeper correction? As our 2011 price analogue chart shows, we may be setting up for a deeper correction surrounding the debt ceiling debates culminating on October 17th. A downgrade of US government bonds and/or a default would be a catastrophic event.
The AUDUSD is testing support at $0.93 and appears ready to move higher. $0.93 was prior resistance that has now turned into support for the double bottom pattern. The 21 EMA is also acting as support at current levels. Waiting for a breakout of the descending channel...
The evidence is adding up and the SPY is looking a little tired up here. Hanging man candlestick at trend line resistance with RSI divergence. We may be in for a slightly deeper correction especially if things get out of hand with the debt ceiling debate. Near term price action is concerning.
30-Year T-Bonds have broken out of their descending trading range. The measured move from this breakout targets the 137' region. Old resistance is new support at 132'-133' where both trend line and 50 SMA support resides.
History doesn't repeat but it does rhyme. Currently there is an awful lot that looks very similar to the debt ceiling crisis of 2011. The price patterns should not be ignored. Much like 2011 we are also hearing growing concerns out of Italy and Greece. Proceed with caution as this week will surely be an interesting one.
The VIX also referred to as the "fear gauge" has just entered into a complacent or "risk on" extreme. Over the last 2 years the VIX has repeatedly found support between 12-14. When price is trading in this 2 point range and when the 9 period RSI falls below 40 it has proved to be a great entry point. Conversely, the 18-20 range has been a reasonable exit point...
Prices for gasoline and crude oil have been on the rise. When does demand destruction start to occur and what does this mean for the $SPY. Over the last couple years gasoline at $3.20 a gallon has preceded each major market correction. This may not be the point of demand destruction but is an important price level to watch in advance of the next decline. Keep an...
