In this week's update on technical chart formations, Goldman's John Noyce has nothing optimistic to tell clients. Noyce observes that while the market may have entered a short-term consolidation period with the 1,038-1,045, "looking further out the setup on the weekly charts of the S&P and the VIX, plus those for broader asset markets - fixed income in particular – make us think that a sustained bounce is unlikely and that broader risks remain on the downside." Yet the most interesting chart formation is the imminent flattening of the 2s30s... not here, but in the UK. Will the Julian Robertson "suicide" trade shift across the Atlantic?

David Rosenberg has provided his typically succinct summary of the day's heavy dataflow, starting with the GDP number, parsing though Bernanke's speech, and concluding with a broad overview of where the market is heading, which is now so disconnected form a bond-implied FV in the upper 700s it is no longer funny.

On GDP:

GDP BETTER THAN EXPECTED, BUT …

Boy oh boy, 1.6% never felt so good. Bonds are getting hammered and the stock market is surging on a GDP growth number that basically represents stagnation in real per capita terms. But the consensus was looking for 1.4% and the “whispered” number was actually below 1%, so for Mr. Market, at least on a day-to-day basis, it is all about how things do benchmarked against expectations. The data were weak but not a disaster and so we are seeing a temporary bounce in yields and equity prices, which likely won’t last for very long once Q3 GDP estimates grind down from their current 2.5% forecast to something closer to 0% — or even negative — by the time the first report is published at the end of October. READ MORE

We are heading for the gap at 1065.50. Then we decline below the lows of 1012.00.