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Pound Sterling Flash Crashes. Is the SPX Next?

Stock-Markets / Financial Crisis 2016 Oct 07, 2016 - 02:25 PM GMT

By: Anthony_Cherniawski

Stock-Markets

Good Morning!

Last night’s flash crash in the Pound Sterling should not take us by surprise. It was merely fulfilling its Bearish Pennant objectives. In addition, it was within a Wave 3 of (3) scenario, which would tell us that there would be large gaps in trading as it descends.

ZeroHedge reports, “U.S. equity index futures fell, with European, Asian stocks also declining before the September payrolls data, following the stunning 2-minute "flash crash" meltdown in sterling which plunged as much as 6.1%, the most since Brexit and is set for its biggest weekly loss since 2009.


Sterling tumbled 2.1% to $1.2346, after earlier reaching $1.1841, the lowest since March 1985.”

Note that this decline was at the most illiquid time of the day.

The SPX Premarket spiked up to the 50-day Moving Average, but could not hold it.

We saw a payrolls miss this morning that may now move all the algos to the other side of the boat.

USD spiked to 97.21 this morning. However, it has moved back down to 96.70 as I write. B Waves may exceed their parameters, i.e. trendlines on occasion. However, the Cycles Model has been suggesting that the USD is at the limit of its move.

TNX may also be at the limit of its move. I had not originally thought this move would exceed the 17.52 high, but now it appears that this is a higher degree move.

Regards,

Tony

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