After yesterday’s close things didn’t yet look so ugly for the S&P 500 and the high probability trader needed to give somewhat more upside (before downside continuation) a chance.

The EUR/USD however is cascading lower today and the dollar index holding above 82…and that likely changes the picture here for the immediate term.  I am pointing this out at the risk of getting too  bearish too low in the immediate term.

Measured from the top of the last consolidation zone at 1365 down to last Friday’s lows we retraced 50% of that move at yesterday’s highs.  As I like to use 23.6% Fibonacci extensions for my price targets I will point out that the 23.6% extension target of that move is near 1275.  See the 60 minute chart.  The 200 day simple moving average currently comes in near 1280.

On the daily chart things are looking worse quickly as well.  Should we close with a nasty red bar today following yesterday’s doji that would also point us toward 1280 at the very least.


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