You can take everything I wrote in yesterday’s SP500 refresh and reverse it – because prices have reversed to the upside benefit of stocks.
- US Dollar was UP for once
- VIX was UP, breaking out above its immediate term TRADE line of 23.11
- SP500 was DOWN, breaking both TRADE and TREND lines of 1141 and 1144, respectively
Today (so far):
- USD is getting smoked again to lower-intermediate-term lows (the inverse correlation USD/SPY is 0.88!)
- VIX is DOWN, breaking back down through the immediate term TRADE line of 23.11 (no support to 21.48)
- 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):
- SP500 at or higher than 1164
- VIX depressed down towards 20
Heli-Ben is hell bent on taking us there. Buckle up.
Keith R. McCullough
Chief Executive Officer