December 28 is the first day when stocks sold will settle under the new rules and rates taking effect in 2018. The upper bound of the E-D on the S&P 500 is about at 2720 on a log-scale chart.
|SPX E-D into EOY|
The Fed is expected to hike this week, and the 13-week Treasury bill bears this out, and the Fed should reaffirm its policy plans for 2018. Once the selling starts, however, and does not abate, we will look for the Fed to retreat at FOMC meetings and try to save the situation. But the dominoes will be falling and they will play out the last, most severe leg of McHugh's Jaws of Death mega-pattern.
|SPX Jaws of Death finale|