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SPX looks unlikely to break 4200 right away, and recent selling pressure should represent an attractive risk/reward opportunity for US risk assets.  Both US Dollar along with Treasury yields have proven stubborn in their peaking processes, but additional evidence of a peaking out is due into next week.   The improvement in Financials is a necessary tailwind for US equities at a time when sentiment is growing increasingly more bearish.  While the US stock market has proven quite narrow in recent weeks, that looks to be changing, and presents a greater tailwind to risk assets vs. an oversold Treasury market that likely could bottom out and turn higher in the near future. 

Bottom line, despite all the dysfunction in Washington coupled with the rapid increase in geopolitical risk over the past couple weeks, SPX has remained remarkably calm.  SPX is a mere six points above the close from Friday 10/6/23, two weeks ago.

The minor break of the last few days’ lows does not represent a switch to a bearish posture.  Indeed, this has taken the shape of a minor corrective pattern which is evident by the pattern from 10/12 peaks.

SPX found strong support near 4305, the 50% retracement rati...

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