The following World Stock Markets heat map shows the major losses incurred by world markets at their respective closes today...not a pretty picture.
Volatility has ramped up significantly since July 26 and price closed on the following SPX:VIX monthly ratio chart well below the 150 Bull/Bear Line-in-the-Sand level at 115.69.
Price action on this ratio peaked in January 2018 and it has made a series of lower highs, which are clearly evident on the next three charts (depicting monthly, quarterly and yearly timeframes, respectively)...indicating that the successive rallies in the SPX were getting weaker.
A drop and hold below 100 on this ratio could produce an acceleration of the selloff, sending the SPX down to, at least 2600, or even 2400, as I described in one of my updates in the above-mentioned post.
A drop to 2600 would land price on the median of this long-term uptrending regression channel (after nearly tagging a target price of 3047 identified in my post of June 29), as shown on the following SPX monthly chart.
And, as I warned in my aforementioned post of June 29, the alligator formations on the YM, ES, NQ and RTY E-mini Futures Indices have now crossed, hinting of further weakness ahead.
Of note, is price relative to the 200-day MA (yellow). If we see an acceleration of selling to take the ES and NQ below it, I'd say that the SPX has a good chance of hitting 2600, or lower...watch for price to drop and hold below 100 on the SPX:VIX ratio for confirmation. Inasmuch as the YM and RTY are already below their 200 MA, we'll see if they can catch a sustainable bounce anytime soon to lead the other two back into recovery mode. Otherwise, look for the YM and RTY to lead the others in a continued selloff.
