Charts I’m Watching: May 19, 2014

As expected, USDJPY traded down to the SMA200 in after-hours trading — tagging the .886 of the bounce off of 101.746 in the process.  TPTB will no doubt do their best to prop it up, but this represents a critical support level that, if broken, opens up a can of whoop-ass on the bullish thesis.

2014-05-19-USDJPY daily 0552

To make matters worse, ZN has remained stubbornly above the .618 we discussed last week, leaving open the possibility of much lower rates in the 10-yr as the short squeeze continues.  In yield terms, 24.71 is the important level.

2014-05-19-ZN daily 0552

With the war drums and really dreadful economic data coming out of Southeast Asia the past few days, look for both to continue their trends.

UPDATE:  9:50 AM

ES just took a run at the SMA10…

2014-05-19-ES  5 min 0653

…motivated entirely by the one-way influence of the USDJPY.  Rallies in USDJPY are magnified in ES to the upside.  Declines are ignored.  This is usually confined to the after-hours, but TPTB are (rightly) worried about the implications of the broken SMA200, and are obviously bringing the PPT online.  Remember, today is a POMO day ($1.8 billion, in order to “boost employment” of course.)

[For more on the all-important carry-trade, see:]

2014-05-19-ES v USDJPY 5 min 0653

Lots of leaks in the dikes this morning…will there be enough fingers to plug them all?

There’s a lot of talk about SPX dipping down and tagging the SMA100 — currently at 1847.44.  I agree it’s likely, but if TPTB have their way, they’ll probably delay it just a bit.  At current prices, it would represent a lower low than the Apr 28 low of 1850.61.   Note that it would also represent a tag of the .618 of the run up from 1814 (Apr 11) to 1902 (May 13.)

2014-05-19-SPX daily 0755

In a few days, however, the SMA100 will be above 1850.61, and a reversal off it would represent a higher low — helping to bolster the bullish case.  It’s exactly the sort of crap they like to pull — as evidenced by the “new high” established on May 13.  In an unmanipulated world, SPX would be tagging 1800 today — the .618 retracement of the series of ramp jobs following the Feb 5 lows.

2014-05-19-SPX daily 0800



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