The Day Ahead 2017-10-04

I had been assuming an ending diagonal count in the S&P 500 up from the August 18th low but it is starting to look more like a 1-2-1-2 type count which means there is room for another down up sequence before a more substantial correction. I admit I am not very comfortable forecasting another ‘buy the dip’ opportunity after a shallow retrace. I think it more useful to think about it as a warning to not get overly bearish until under 2495 SPX.


Not much to add on the Dollar Index. It may correct a bit from current levels but think they are trying to find a way to test 95.31 and perhaps more.


Similar story in Euro but the inverse. I can see a retrace up in the short term but expect a test of lower support after a bounce.


Crude needs to use the inventory data today to climb out of the hole or risk breaking the uptrend from June.


The micro count in gold is not clear to me. Gold could easily still leak lower before much of a bounce.


I have similar reservations about the micro count in bonds as I am not sure we have completed the first impulse down yet, or the possibility that it is preparing to accelerate in a 1-2-1-2 type count.