First things first, alright. Today 1957.71 will be toast and 1944.69 will be in the crosshairs. The 38.2% Fib retracement is just below at 1940.72. And the larger target -- the 50dma at the 1923 area -- will be on everyone's radar.
Hat tip to Zero Hedge for flagging the situation in Portugal with Espirito Santo back in May.
Portugal's Largest Bank "In Serious Financial Condition" Auditor Warns
Today in Europe, Espirito Santo has put in an insolvency request and trading in its shares and bonds has been suspended. That's the spirit!
Nothing has changed for the better in Europe, UK, or the USA since the financial crisis. The imbalances have only grown. Today's "news" is just a small reminder. It's only the tip of the iceberg.
As one would expect, Europe is down hard, anywhere from 1 to nearly 3%. German, US, and Japanese bonds are bid while Italy and Spain are showing stress. Meanwhile the yen crosses are getting smacked and the US dollar is higher. So all is functioning pretty normal.
S&P e-mini futures are down over 20 points. What this will do is create at least a fifth wave down from the top. More subdivisions can develop. But as of today, the trend will show the first crack. The arc that has been posted several times of late will likely be busted as well.
However, should the 50dma become the target (1923 area), it would line up nicely with the bottom rail of the wedge. That could set up a nice wave 4 buy for a final run to 2,000+ and a possible top if this interpretation is correct.