Stocks are tracking the model this morning with a nasty downside reversal off the 944.75 magnet and I’m hopeful that we’re finally on our way.
The first real “tell” comes IF they can get back under the BAM 897 magnet because that would tell us that 944 has “officially” failed.
Remember, the theme for this June decline is supposed to be “total discombobulation” of many various markets and, assuming that’s correct, the talking heads will most likley blame the problems on unexpected US dollar strength.
Our theory is that the dollar weakness brought over-leveraged positions into the “reflation trade” and that this unexpected dollar strength will create an unwind just as vicious as the unwind of the carry trade in 2008.
Full report coming soon