Good Afternoon,

Looks like the sellers have some momentum! Fundamentally though, they shouldn't. Did you see the intial claims number today? It was fantastic. But I guess that doesn't matter when you are in the "post QE" world and trendlines have been broken and overall, fundamental data around the world is weak. Should be fun to keep an eye on earnings events this month!

Technically, SPX broke the trendline and now we are sitting on support at the 1425-1430 area. Maybe, just maybe a Friday selloff will come in and we will head towards next support at 1408 and then 1400:

Past performance is not indicative of future results

Now that looks like a pretty classic double top and right now we are sitting on the "trough line". Will we break it? If we do, the far left side of the chart shows that 1400-1408 support area. Are you prepared for this move down? Could you have seen it coming/prepared for it when we were trying to test the highs 5 to 6 trading days ago? Keep in mind the high 5 days ago was unemployment Friday when we only created 114k jobs and the unemployment rate amazingly dropped to 7.8 from 8.1.

In the meantime, commodities have actually been strenghtening/holding steady and the USD has been getting weaker. So now you have a weak USD when equities go up and then a weak USD when equities go down. I have a feeling if we get a significant drop in equities, the USD should see some strength. Maybe finally, you can sell rallies. Look how the EUR/USD has a similar double top pattern to the SPX:

Past performance is not indicative of future results

And for all of you "inter-market relationship" fans, the USD bottomed out against most currencies the same day the SPX topped out - September 14th. That was the day after QE3 was announced.

The SPX tried to make it to a new high, but obviously failed and now we have a lower high. If we get below 1425, we will have a "lower low". Could the "sequence" be changing?

Calling all sellers...

Happy Trading and Be Environmentally Cool

Coach Brian

Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.