We left the cash market Friday with the 2 day cycle just starting to roll over as they headed for the closing bell. An initial 2 day cycle projection pointed to 1205 which was smashed in the futures overnight.
The futures have come off a low of 1192 slightly. The cash open will be ugly, probably around key support at 1195. As long as that level holds, nothing major has happened, but if it breaks later in the day, a waterfall could open up.
As I write this at 9:24 AM the Spoos are trading just below inner 2 and 5 day cycle lines converging at 1197. 2 day cycle indicators are trying to get to the buy side. A 2 day cycle low probably isn’t due until the end of the day. If they can’t get through 1197, the next support would be the outer 2 day cycle ribbon around 1180-85 and outer 5 day cycle band also now at 1180. If those levels fail, the market would be in crash territory.
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Gold is comng off a apparent support around 1700-05, and positive divergences have developed on the 2 day cycle indicators, but it needs to clear 1720 to be out of the woods in the short run.
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