The S&P500 futures lost about THREE weeks of gain in the last 24 hours. This has significant implications and is also an indicative precursor that the world is changing as you are reading this… case in point, within the hour, China’s PBOC will release its statement on their intent for the Chinese Yuan. Here is the technical damage at this point, noting that the tariff have not been implemented yet, due 1 September.
The daily chart of the S&P500 shows an erasure of about 15 days of gains over the last 2r hour period. Furthermore, despite a long down candle yesterday, it gapped down into the downside target level and continued another -1% further in a Gap and Run effort. This is way over stretched, and should see a technical rebound to test and closed the gap formed. The worse thing to happen, is to breakdown through the long term support trendline after the PBOC news. Perhaps a better outcome would be to break down below the trendline and return back above the trendline support. In any case, the immediate support level is 2740, and the longer term target upon breakdown is marked at 2620.
The VIX chart shows the magnitude of the volatility spike, only to indicate that there is more to come…
As mentioned before, a simple SDS position would be profitable under these circumstances. A Buy was triggered at 30, and would, have been about 10% upside currently.
Just for a wider perspective of the PBOC announcement, China can and will (most probably) unleash a massive amount (of money) to devalue the Yuan until it is 7.5 to the USD.
These are historically monumental times… do enjoy the ride as history is being made, stay safe, and watch out for caveats, including a V shaped bounce later on!
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