China was closed overnight, but China stocks ETF in US shows weakness after China cancels trade talks.

European stocks sank – led by Spain and Italy – extending losses after Draghi discussed ending the EU’s monetary stimulus. 

US futures show the initial reaction was lower on Sunday night, then as the US cash markets opened, S&P and Dow were dumped but Nasdaq was panic-bid (underperformer last week). S&P/Dow legged lower again on Rosenstein headlines then rebounded after headlines that Trump will meet him on Thursday…

Lots of M&A today but Sirius and Pandora ended the day red.

But both Randgold and Barrick ended the day green.

For a sense of today’s manic algo-buying, here are FANG stocks…opened gap down to last week’s lows then ramping almost 4% off those lows to erase all of last week’s losses.

Among the biggest losers were GE – which fell to 9-year lows on turbine woes and Iraq contract threats… (trading at the same price it traded at in Nov 1995)…

Despite the equity selling, Treasury yields rose marginally on the day (not helped by a weak 2Y auction – lowest BtC since 2008).

The 10Y Yield rose on the day to a new cycle closing high, but as the chart below shows, the last few days’ ranges have been de minimus (as stocks have pumped and dumped)… (3.055%, 3.063%, 3.063%, 3.063%, 3.081%)

The Dollar Index had quite a day, sliding lower as Europe opened (China closed), spiked lower on EUR gains after Draghi inflation comments, only to surge higher for rest of day on safety concerns following Rosenstein resignation headlines…

Offshore Yuan slipped lower for the 2nd day in a row (even with China closed)…

While HKD was relatively flat after Friday’s short-cover-carnage, Hong Kong money-market rates went a little turbo…

The Turkish Lira surged today (best performing currency of the day), extending gains on Pompeo comments.

But the Brazilian Real slumped (worst performer of the day) as the left-wing Workers’ Party is said likely to reach the runoff vote in Brazil’s election.

And the Argentine Peso was pummeled after returning to Lagarde to ask The IMF for more.

Brent Crude topped $81 for the first time since Nov 2014…

Technical Notes 

SPX daily chart shows another green Setup 9 and a pullback with 9’s has been the clear pattern since the June 2782.81 high to the 2700 summer low.

S&P 500 Indes had a recent upside red Sequential Countdown on day 13 and a Combo 13. There is a secondary Countdown on day 8 of 13 that now could play out to the upside. Having said that, today’s green Setup 9 could turn this lower.

S&P Cumulative Breadth (Advance-Decline) Line shows another DeMark Sequential red countdown 13  and a pink Combo upside 13 with a green Setup 9. The two-of-three upside exhaustion signals worked well with January’s top ahead of a 10% pullback and June 3.55% pullback. The last upside exhaustion signal did not yield a pullback. 

Nasdaq 100 Index is still holding the 50-day moving average. FAANG equities are helping stave off a precipitous decline.

NDX Index back down to the 50-day moving average. I (Tom Thornton) [has] focused on the first upside exhaustion signals from July of this year which worked well for a pullback to its support level at the 50-day moving monkey. However, there is a secondary upside red Countdown pending on day 6 of 13. 

Dow Jones Industrial Average Index with a classic Demark 9-13-9 pattern.

Dow Jones Industrial Average Index shows an upside green setup 9-13-9 pattern informs us to standby for the price flip indicator, lower in this case. 

Boeing, The Dow Jones Proxy trade. Boeing is the largest weight in the Dow so it correlates with the Dow’s 9 Setups. Today, BA shows a green Setup 9. Boeing looks stretched and will need a price flip lower (e.g., a close below 4 previous closes ) to increase my conviction of the prices momentum. 

Retail Sector ETF XRT has been sideways adrift after August’s upside daily DeMark exhaustion signals as well there is a weekly upside exhaustion too. The read through to comparable sales figures will weigh heavy on this instrument moving forward.

The industrials sector via XLI had a large price flip to the downside today after a steady march higher through early September. 


The financials sector via XLF has pulled back 2% from its most recent upside exhaustion signal last week at 29.1886. XLF Financial ETF has a recent upside Sequential Countdown 13 29118 was the wave 5 upside price objective. 

Consumer Staples, XLP, had a big reversal and will be watching if it holds its trend duration structure from here. The last Sequential Countdown 13 that occurred in May was clearly the last entry point to participate in its upside; from here lower technically speaking. 

Transport Sector IYT ETF also had a big reversal today. IYT Transports tagged wave 5 upside price objective and now has price flipped down (Green 1). 

The US Dollar Index now with a downside re Sequential 6 of 13. Perhaps we’ll see the dollar taken down within a series of 5 waves. Support sean at 92.58 and then a Trend Factor price target of 91.32. 

The Euro spot Index bounced into resistance with a red upside sequential Countdown on day 7 of 13. Having a low count into a breakout gives credence to a stronger Euro ahead. 

U.K. Pound Sterling daily chart shows a green Setup 9 followed by a strong pullback. Watching the 3-standard deviation band for support. 





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