With everyone drawing Red Lines not to be crossed….also the market has drawn one.
The SP500 as an unconfirmed descending pattern (lower highs, but not lower lows) since 1 March with first strong support at 2,322 (Fibonacci 76.40%).
The pattern is still “bull” , but weakness is increasing -two times it broke an ascending channel (23 March and 10 April).
Until 2,2204 (Fib 23.80%) it can re-rally.
The RED LINE is actually 2,150-2,080. This is the start of the Trump rally and practically 2 years of previous tops.
And if it loses that …all hell would break loose.
Gold (inverse) has a strong signal with the MDA crossing over.
VIX not yet in full alert, but kind of at the base of serious issues with a rise of 41% since 21 March
CBOE SKEW (one off black swan event indicator is instead lower
The spread between 10 years government bond Germany /France is at 0.73 (the max since a while ) and also the Italian bond yield are going straight up (even more than France…meaning that if Melenchon/Le Pen win the biggest causalities will be the Italian banks).
In summary the market needs to pull up quite soon with strength (apart a probable oversold bounce) or we could run into issues. It looks like a spring coil…but we do not know yet which way it will pounce.
Update
Yesterday breach of the SP500 means that the market will at least test the MDA200 (currently 2.290). Being oversold probably it will try and recover the MDA50.
investorpolitico 