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You can take everything I wrote in yesterday’s SP500 refresh and reverse it – because prices have reversed to the upside benefit of stocks.

Yesterday: 

  1. US Dollar was UP for once
  2. VIX was UP, breaking out above its immediate term TRADE line of 23.11
  3. SP500 was DOWN, breaking both TRADE and TREND lines of 1141 and 1144, respectively 

Today (so far): 

  1. USD is getting smoked again to lower-intermediate-term lows (the inverse correlation USD/SPY is 0.88!)
  2. VIX is DOWN, breaking back down through the immediate term TRADE line of 23.11 (no support to 21.48)
  3. SP500 is UP, breaking out above both aforementioned TRADE and TREND lines w/ no immediate term resistance until 1157 

This, of course, puts the heightening probability of a crash call back in play. The only way we have a heightened probability of an October crash is if the shorts keep getting squeezed and the perma-bulls suspend disbelief (chase performance).

As a reminder, I need to see 2 things before I re-short the SP500 (SPY): 

  1. SP500 at or higher than 1164
  2. VIX depressed down towards 20 

Heli-Ben is hell bent on taking us there. Buckle up.

KM

Keith R. McCullough
Chief Executive Officer

Bear/Bull Battle: SP500 Levels, Refreshed - 1