Back from the Brink

SPX and ES nailed our downside targets yesterday, bringing our month-to-date performance to a tasty 6.77% — an 11.71% margin over SPX which has slumped 4.93%.   It’s the best start to a month we’ve had since September.Screen Shot 2016-01-07 at 8.55.37 PMAfter SPX reached our targets, the usual USDJPY- and CL-inspired ramp jobs failed to materialize.  In fact, every time they started to bounce, they were almost immediately brought back down.

We’ve seen this happen countless times in the past few months: SPX reaches an obvious turning point, but isn’t permitted to react during the session.  Instead, the reaction occurs overnight in the futures market, when the average Joe is precluded from participating.

As the session wound down yesterday, I wrote:

So, what’ll probably happen here is a close at or near 1940-1943.  Then, around 3AM ET, something wonderful and miraculous will happen that sends ES up about 40-50 points. I’m thinking 1980ish.

Sure, enough, ES rallied as much as 36.25 overnight on no particular news — just the fact that CL is back above its 2009 lows and USDJPY had a massive bounce off its intraday lows.2016-01-07 USDJPY 5 0615Will it last?

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