SPX is now testing the last support from the gray Fib fan, next support is down at 1150. The market is now right at a breaking point, with a challenge going on for the 20 day MA at 1195.21 and the lower channel line is in jeopardy of breaking. Gold also is getting hit hard, down $40 bucks, and the VIX is now headed higher, up 12.71% so far. Today is the first day of POMO in the new QE2 program, hope Ben is sleeping well because this ticking time bomb is ready to explode.
Nassim Taleb comments on the FED in a short video clip from Bloomberg TV.
“The main problem was risk in the system. You cannot solve a risk problem by risky methods. You have to accept…We’re forcing the Greeks to reduce; ok you spent money you didn’t have; now you’re going to cut down. We're going to have to face the same thing. And you’re going to take pain, it’s painful, but that's life."9:09, The SPX is currently testing the lower channel line, if a breach does occur the next solid level of support is at 1195.21, the 20 day MA.
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Channel line support is now at the 1200 level.
7:15, Here are my top two options on how the SPX could play out over the next month, either a break-down of the SPX where a new down trend would be established with lower lows being printed, or a sideways trading range for the next month in a long drawn out series of corrective waves building a large degree 4th wave, with an eventual outcome of higher highs.