Today will be one of those days we reference for a long time to come.

On such days, it’s helpful to take a breath and assess the cross-market movements as seen on the five key inter-market ETFs as shown below.

Let’s look at the daily chart and take a quick overview of the S&P 500, Gold, Oil, The Dollar Index, and Bond/Note Prices.

First, the big news is the massive sell-off on Wall-Street, seen here in the SPY ETF:

No, what you’re seeing is not a data error.  It really happened.  Many of you watched it happen, either right on front of you on the charts on on TV.

Many posts will be written on the “why” of today, but this post tackles the “what.”

It underscores the point that 1,150 was critical support!  Once the level broke, the market spiraled into freefall.  That’s not the reason for the freefall, but it was a factor for many traders – taking stop-losses on a break under 1,150, or getting short under that level.

I mentioned in this morning’s post “Make it or Break it!  Here we Go at 1,150” that if we’re under 1,150, then we’ll most likely see 1,100, and if sellers push under 1,100, then we’ll see a retest of 1,050 (February Low).

I was correct… except I’m sure no one expected all of it to happen in one day!  But that’s what happened.

This is one of those days that the chart speaks for itself.

As a result of the Wall Street panic, Bond Prices surged, as witnessed in the tradeable/popular ETF TLT:

The sentiment of many traders was that bond prices were likely to fall.  The opposite happened.

I have been updating members to watch for a corresponding rise in bond/note prices on any sell-off in the stock market.

Such a large move was unexpected, but the play was forecast.  In one week, we broke key resistance to test the next likely target at the $98 level… tested and exceeded on a massive volume surge.

Next, let’s take a look at key commodities Gold and Oil via their respective ETFs:

GLD:

I also have been mentioning to members that gold’s likely upside target was a retest of the $1,200 level to complete the rounded reversal pattern.

I posted on this previously in “Gold’s Breakout Zones Trapped Between Support and Resistance.”

What we have now is a full mirror image pattern, where the right side of the chart (arc) mirrors almost exactly the left side of the arc.

These are beautiful patterns, and today’s surge in GLD/Gold fulfilled the target for the pattern.

USO:

I think the big surprise this week was the dramatic fall in oil prices, given that many traders expected the oil spill in the Gulf of Mexico to send prices higher.  They didn’t rise; they fell sharply.

It’s difficult to isolate a single pattern in Crude Oil prices, given that we could have a mis-shapen Head and Shoulders or a Descending Triangle (drawn).

Either way, we broke the rising trendline and that helped contribute in part to short-term traders taking stop-losses and initiating short-sale breakout positions, driving the price lower.

Support?  Look now to the prior immediate price lows on the chart.

Finally, the US Dollar Index benefited on news of the Euro’s decline… and market weakness.

The US Dollar Index, referenced by the ETF UUP, broke above an inverted triangle pattern (drawn) at the $24.20 level which sent prices higher on the break.

Remember, the US Dollar Index tends to trade opposite of the US Stock Market and Crude Oil.

It often trades inverse gold prices, but the key to understanding this week has been fear and debt.

Fear causes investors to rush to the safety that treasuries and gold can offer.  As an added bonus, concerns of the Euro collapsing (yes, those fears exist) as well as debt contagion spreading to Portugal, Spain and other European countries, sent investors buying gold as a hedge of safety.

In times of trouble, investors ‘hide’ in gold, so this decouples the inverse relationship of the Dollar and Gold… while the inverse relationship with the Dollar and Crude Oil remains.

I keep members updated of weekly changes and opportunities in my Weekly Intermarket Technical Analysis reports.

This weekend report should be a big one as we assess the fallout, levels to watch going forward, and other factors.

Take time to study the charts, realize that big moves can happen, trading involves risk (sometimes great risk), money management is often key, and it helps to be objective rather than biased in a particular bullish or bearish direction.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade