USDJPY reached the bottom of the white channel — and then some — slightly overshooting our 119 target.
We identified 119.07 as the line in the sand, and it’s hovering right there this morning. Meanwhile, SPX reached our 2018.78 target. From yesterday morning’s post [members’ section]:
As such, I’m looking for an initial bounce at the red .618 at 2038 (also just below the SMA50), followed by a dip to the white TL mentioned above (2018.78 if it happens today or tomorrow, otherwise 2030.)
We called for a bounce there, and the rebound I’m expecting in USDJPY should accommodate one. Keep an eye on 118.59 — the purple .886.
UPDATE: 11:00 AM
That nice 13-pt bounce was just undone by lower rates, oil’s continued weakness and USDJPY’s drop through 118.59. Note that PMI, ISM and factory orders all disappointed.
UPDATE: 11:50 AM
TNX just reached our 19.27 target…
The problem child is USDJPY, which has dropped below the purple .886 yet again. It’s tough to tell when this highly-manipulated currency pair is producing a head fake or is legitimately in trouble. Need we remind readers that the pair is now well below the key .618 at 120.11? The next support is the red .500 at 118.18.
The bulls should be expected to try and hold SPX 2000, but it would require that all the above reverse muy pronto. According to Bill Gross, who draws a slightly higher readership than yours truly, we shouldn’t hold our breath. In his just-released annual outlook, he tells investors “the good times are over.”
I certainly have no qualms with his macroeconomic and market fundamentals reasoning. I’ve thought the same for quite some time. But, IMHO, the “good times” can be extended for as long as central bankers are willing to continue shoveling moolah into the banking system (as opposed to “the economy”) and the BoJ is willing to continue trashing the yen.
The rest is shoulda-coulda-woulda.
continued for members…
Sorry, this content is for members only.
Already a member? Login below…