Stocks, Bonds, USD, Gold - key intermediate term scenarios to watch
The August plunge in stocks has the potential be a fourth wave correction. Since Monday's low came at larger degree support levels, the correction in price could be (nearly) over while the correction in time has more flexibility.
The Dow Transports presents a fourth wave pullback with respect to its 2011 low and has retraced about Fib-0.382 of the third wave advance in this context (Chart S1).
In SP500, we have a potential fourth wave in two degrees, with respect to the 2011 low or the 2009 bottom (Chart S2). Note that Monday's low terminated around the mid-channel line as well as the purple megaphone boundary.
If these support levels fail, the next support is around low 1700s, the lower channel line.
UST10Y yield index rebounded off a small-degree EDT and is back inside its prior breakout territory (Chart B1). If the momentum keeps up, yields could be ready for another run higher towards their long term resistance (Chart B2).
The USD index has retraced Fib-0.382 of its 2014-15 advance (Chart $1) and successfully retested the green trend channel support (Chart $2) and has the potential to make another run higher, if near term resistance is taken out (Chart $3). Otherwise, the USD index remains technically overbought and could continue to probe for support and consolidate in time.
Gold did rebounded from the first target low basedon one of the three tracking scenarios(Chart G1, red C). As long as Gold is below its August high as well as below $1300, the bearish gray and green EDTs remain valid though(Chart G1 and G2).