The collision of global markets and social mood

Monday, October 26, 2015

Monday -- What Happens After Euphoria

S&P E-mini Futures:
Recovering from being down.

After euphoria the Fed can raise rates in an attempt to regain some credibility .

A dent in the euphoria could be the JPY -- if it keeps getting stronger. Strong yen is often Risk Off, and the daily chart of USDJPY, which ordinarily has a high correlation with the S&P, looks wobbly.

Friday 2s-30s threatened their October 9th lower swing points with volume. This needs to be watched, as it runs counter to the lower rates expectation.

WTI crude is pressuring 43.97, a break of which would open the door to fresh lows.

NG looks terrible even though it had daily, weekly, and monthly positive divergence just a few short days ago. Watch and wait.

Gold, silver, and copper all green.

S&P Outlook:
With the S&P getting slightly above the 2077.43 78.6% retracement then closing below it (a subtle, bearish sign), here is how things left off Friday.

Possible but doubtful.

Sentiment seems to have swung wildly from despair to euphoria. It's either a B-wave or the "third of a third" in a developing impulse from the 9/29 lows. Two wildly different scenarios.

If the B-wave scenario is still correct, look for the "best six months" narrative to fail and Carl Icahn to have the last laugh. Please note in the chart "sicker rally" should be Sucker Rally.

If the wave 3 impulse is correct, a wild year is likely in store, higher and lower. The S&P could be making a larger Wave 3 from the 2009 lows, with a larger Wave 4 to come. 2200+ possible. Below 1750 possible.

Pure rock 'n' roll.

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