DAILY MARKET RECAP
Thursday January 7, 2016
Key Data points:
Key Developments :
- Bearish Flag Target Acquired.
- Market closes below 61.8 Fib, adding to the risk that August and September Lows will be tested.
Today played out much like yesterday with the lack of much afternoon strength. The Bearish Flag target 1962.07 target was acquired basically on the open, it along with the 61.8 Fib acted as morning support. (see support at 61.8 purple line)
What little strength we saw was sold mid-day and the market trended lower into the close. With the bearish follow through and no signs of a reversal (at least yet) , I believe it is fair to call this a bearish range breakdown. The most conservative target being 1870.04 on the SPX (see below).
The Bottom Line:
2016 is off to a very interesting start. At this point, all signs are pointing to a test of the 2015 lows as the bearish range breakdown is targeting 1870. Watch for follow through on this breakdown tomorrow. At this point there are no signs of any type of reversal. We all know that that can change rather quickly, especially as the market approach oversold conditions. However, at this point, trading with the trend (down) is how I plan on positioning myself.
Chart of the Day:
This was the chart of the day back on 12/22/14 A TEXTBOOK H&S top, with a lower high, below the broken trend, and now making a lower low. There will be bounces along the way for sure, but the target for this one is 25.43.