Watch for some reversion to mean catalyzed by BOJ rhetoric should support equities till we test upper levels since Yellen testifies tomm.
I've been think about the macro picture that's been playing out for the last 30 years. What is happening is basically the increase in unfunded liabilities took the currency off the gold standard. And still progressing to debase fiat currencies. The unfunded liabilities are basically from lack of production of goods and services secondary to lack in sustainable demand. Basically a global deflationary cycle. The inefficient portion of each countries demographics leads to more unfunded liabilities. The only way to sustain this model without going into default is to keep printing money and pushing interest rates lower and lower till they go negative as they have done in other G20 countries. The way interest rates are pushed lower is for the market to sustain a low secondary to intermittent panics in other risk assets. So the only bubble that never gets popped is debt bubble. What this implies is the politicians/banks/central banks know this and are colluding to drive interest rates lower by popping speculative bubbles in other risk assets. Commodities/equities. If the risk increases of long term interest rates going higher. The collusive effect is to hit equities. This is the big picture of what's been transpiring. If unfunded liabilities are decreased and social programs are removed, you will have riots in the streets and the bankers and politicians will be strung up on the nearest pole. So that's not even a option. The super cycle implies this equity bubble will be popped substantially. But will always be rescued When next lower tier in interest rates is hit. This model is precisely what's been happening globally. The Ten Year Note is close to 1.7%, the next lower tier that everyone talks about is 1%. And we are not there yet. So prepare for SP 500 to be at 1600 minimum, if not lower at 1000. The only door they leave open is the Treasury Market.
Another result of debasement in currencies is for hard assets to cycle faster into bubbles and pop.. Cycle n pop.
A possible scenario is WallStreet/Bankers are trying to get Hillary into the WH. The income and wealth disparity is posing a threat to the establishment. And Trump has the populous vote. If the market crashes Trumps odds of winning are higher. If they can run this market up on low vol/volume to upper levels, the status quo may persist. The keys to the bank vault were given to them from deregulation of the financial industry during hubbies Presidency.
If you look at all the rescue attempts since hitting 1802.. It looks more like CB intervention than individual funds or traders battling it out. I strongly suspect that the establishment realized if they crash the market, than Trumps chances of winning will be much higher. So they canceled the crash.
A test of the 50 day MA from above would washout some longs who bought based on the cross above. Around 1930-40 on Spooz
As we approach political milestones for the Presidency. The chaos may be used as a reason to hit US markets and capital flight.