I was trying to play the role of the market God today....
I was half right as SPX did shot up strongly in responding to a weaker PCE report. However, I was certainly wrong to wish that the God would pull the rug out from underneath before closing today. It didn't!
Nevertheless, I think it was just a delayed act that will likely be carried out early next week. See the chart the below for SPX. It is bumping against the upper end of the trading range with nearly all the momentum indicators flashing extremely overbought signs. On top of that, VIX futures for calls are almost 10 times more expensive than puts, expiring next Wed. This is THE most reliable crystal ball I trust the most. I'm afraid we will see some pretty violent fireworks Mon or Tue next week with the most likely direction towards the downside. At minimum, SPX will come down to test the support around 4000-4020.
Let's wait and watch!
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