Well, well what an interesting week to kick off the year. I had anticipated some bearishness but this was more than I expected.
I have been saying watch this divergence in JNK v SPX. Inevitably the gap is closing fast with some help from China yuan fix causing carry unwind again as we saw in August 2015. The MACD on JNK has not crossed down yet and the close for junk was on support. If it breaks down next week it could get real.
$NYMO is below -60 as I anticipated. There is a chance to see some more weakness in the week ahead and then maybe a rebound. Have to just take it as it comes. I certainly don't add to short positions at this level.
The $SPX weekly chart closed on support with a solid marubozu. If we see a lower weekly low form next week then it is almost certainly a confirmed long term reversal. You can see how last week it rejected off the 50 week MA. That was a very bearish indicator.
This SPX daily chart is very interesting. Notice the double bottom and double top. My highest probability patterns.
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