Not As Clear, But More Volatile

The market liked the Fib extension. While price probed 1779.09, it closed on both 5 and 30 minute charts within pennies of the 1781.88 target.

Today is not as clear.

1800 and 1806 are game (61.8 and 78.6% retracements) but so are new lows. 1779.09 must hold for this bounce scenario. 1777.23 was not broken as it was in the Dow, which could be a positive divergence signal. But the aggressive way that the market has been subdividing to the downside is something new (for the past few years). It may be signaling a larger change of trend that bears watching.

That would suit me fine. The volatility is great.

The Nikkei had another digger last night (on the heels of a $182 billion aid package -- not anywhere close to the first one by Abe and the BOJ), and Europe is mixed. So it's not looking like a Risk On follow through to yesterday. Precious metals are reacting to the hot GDP readings, but there is weak consumer new lurking beneath the figures. The 3.6% headline number sounds great, but was goosed by inventory expansion. Personal consumption fell (was revised lower) to .96% -- not great.

The same people that say "Don't fight the Fed" are the same ones who say "Never bet against the US consumer." They're the same ones who say that the economy is doing great and that rising rates are proof of that -- that rising rates mean an economy is expanding. Tell it to Europe during the recent crisis.

These are usually people who make money from other people's money, and need more of it to survive.