And Agamemnon dead."
W. B. Yeats, Leda and the Swan
North and South Korea were exchanging live artillery rounds over their troubled border today.
And US equities were in a Daedalian swoon, falling through support lines on the charts as if they were merely insubstantial constructs.
Surprisingly to some, so far this is just a stiff rinse, certainly to be expected to clear the floor after this choppy back and forth action. What else is there to do after the long run up for the past few years on the back of the policy errors and malinvestments of the Banking system and their Fed.
The next moves if they go lower still will be much more significant. And we will have to wait for that.
This is where charts prove helpful. You can clearly see the big, big support on the SP futures chart below at about 2030. Even if we should gap lower tomorrow, it only really counts if we break that support and stick it on the weekly close, and fail to recover that support next week.
There is a similar position on the NDX futures chart, which is the key confirmation factor since the Nas has led the way up with a narrowing phalanx of big tech names that provided a fairway for the momentum players. The key support there is at 4340, about another 30 points lower.
At some point I expect the Fed to jawbone the markets in some manner, with the designated stooge of the day saying something essentially meaningless, but perhaps sufficient to 'whistle up a wind' in the windiness of the markets which they have blown into being.
If we break down further still, it may be a long, long time until September, and the stormy season in which the denizens of market crashes past tend to dwell. The deadliest pattern is a market break and then a rally back up that fails to make a new high. And then when it falls, enter the abyss.
So I would be quite careful in chasing anything here, up or down. Our markets are like the words of our politicians and economists: it is hard to be too cynical or too skeptical about their substance and veracity.
But if we should see a more serious break in the markets, and trouble and fear in the economy, then what rough beast, its hour come round at last, may slouch towards the November elections next year to be born?
Have a pleasant evening.