Red

Right after I posted this chart on Twitter yesterday, the S&P went red.  I had said that the chart argued for 1440+ and then a possible correction.  What I didn't say was that the correction could occur at any time.  Because of that, I also said that I was buying VIX Oct 17 calls.  I was glad I had.

1440+ can still happen.  But should there be a close today below 1422.38 the dinner bell will be rung for Turtle Soup, the second one since August 21st.  This one could be a bit richer than the last, more like a bisque or a stew.

Below 1396.56 will be the second warning that a correction is occurring.  The red zone shown in the chart is not absolute, just a high odds area.  I view the entire rally from March 2009 as a complex correction.  There is no reason why it can't continue if it wants to.

Apple dove 18 points after I mentioned it as well.  Nice, however Fib targets are not market calls.  703.65 is still on the table unless 657.25 is broken.

Reuters reports that Spanish Prime Minister Mariano Rajoy expects the European Union to set reasonable conditions for Spain if the country sought a bailout, saying he should not be told exactly where to trim public spending and would not cut pensions.

"I am absolutely convinced that everyone will be reasonable but I insist that we haven't taken a decision," Rajoy said.

Hear that?  He's convinced he'll get reasonable terms.  But he won't be told where to trim spending. I wonder how reasonable the bond markets will be.