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Key Takeaways

  • Equity bounce ongoing, but has begun to lose some strength given Small and Mid-caps dropping, Transport weakness while Discretionary and Healthcare fell on Wednesday.
  • Hot CPI print brought about a big drop in the US Dollar, while Commodities like Natural Gas, and Copper staged big breakouts to join recent strength in WTI Crude.  Near-term, this decline in DXY looks to be close to intermediate-term Trendline support
  • Emerging markets nearing key levels as EEM rallies up to its intermediate-term trendline resistance, while China, India have strengthened further.  Not as much participation lately out of Latin America, nor South Korea.  China looks increasingly more attractive

S&P’s bounce since Monday has stalled out after two Equal-wave bounces which were perfectly equal at 4741.  It’s thought that this week’s bounce is nearing completion, yet we’ll need to see evidence of this reversing to expect any decline is getting back underway.  Two key areas to pay attention to:  4706, and then 4673, representing the highs of the first push up off Monday’s lows.  Undercutting this would lead back down to a retest of Mondays lows.  On the upside, 4758 i...

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