Market Analysis - Tuesday, Sept. 15

SPX futures declined to 7573.80, a nominal new low. The Cycles Model had suggested that the September 10 low may have been the ideal date for a Master Cycle low. However, the Fractal Construct may reach completion today, which is allowed by the Cycles Model as an extension that completes the Fractal formation. In fact, the Fractal construct may allow a decline to 7550.00! Thus time and price must both be met to allow a reversal. In the meantime, the old favorites are being traded in for new models.

ZeroHedge reports, “Futures are lower – but well off session lows thanks to some well-time oil sell orders just before US traders walked in to work – as bond yields continue to make new highs, with both Nasdaq and Russell lagging the S&P which feels like more de-risking into tomorrow’s Fed release.”

The premarket VIX is consolidating inside yesterday’s trading range beneath the mid-Cycle resistance at 18.24. While elevated, this is not (equities)bear market behavior, especially after putting in the Master cycle high on September 10. The Cycles Model may allow a 3-4 week decline toward the lower Trading Channel trendlinenear 12.50.

The US 10-year Bond Yield futures rose to 50.47 thid morning, while the cash market topped out at 50.14. The yields are challenging the FOMC meeting as I write. It is believed that the stated the Fed rules show that the Fed Rate at 3.50-3.75 should be at 3.79 to 6.01. The prognosis is that the Fed may only raise rates to 3.75-4.00, leaving the Fed well behind the market. The Cycles Model calls for a reversal, but it may not occur until the FOMC minutes are released. The aftermath may be a 3-week correction down as far as the 52-day Moving Average at 46.84.

The US Dollar Index is consolidating this morning above Intermediate support at 99.41. It is on a buy signal that may last to mid-October. The Cycles Model shows increasing strength through this weekend.