Are we there yet?
2,127.50 was our weak bounce goal on the S&P 500 (SPY) and we finished the day yesterday at 2,125.77, so not quite and, unfortunately, today we must raise the bar, and our expectations, to the strong bounce line at 2,140 and we're not going to really be impressed until 2,150 is taken back but let's not get ahead of ourselves because, as noted in the title, we're looking down, not up.
We believe we're at the early stage of what will ultimately be a 10% correction, back to the +5% line on our Big Chart at 1,942.50. The next significant milestone along the way for the S&P will be our 10% line, at 2,035, assuming we do fail support at 2,100. For the last two days, Apple (AAPL) has been propping up the markets as the index heavyweight has been responsible for essentially ALL of the market gains (see yesterday's Live Trading Webinar Replay for details).
This morning, the BOE has crimped the Dollar rally by leaving rates on hold (0.25%) but that move (or non-move) was, after all, expected and EU markets are flat in their afternoon so far. Of course unchanged still means a $435Bn QE program continues for the UK markets. In a country with a $2.6Tn GDP, that's right up there with our own Fed's $4Tn (so far). This has led John Mauldin to note:
“You shall not crucify mankind upon a cross of gold.”
– William Jennings Bryan, July 9, 1896
“You shall not crucify the retiree and saver on a cross of negative rates.”
– John Mauldin, September 14, 2016