Remember, no POMO today. Our thesis about NKD was weakened as it popped a bit overnight. There is still overhead resistance and a rising wedge, but not as compelling since it exceeded the 5/13 high.
Likewise, USDJPY was ramped a bit after the close yesterday, fell during Tokyo trading, and was ramped again after their market closed — testing the SMA20.
The near-term bounce should continue, but there remains the issue of the broken grey channel bottom and all those bearishly-aligned moving averages…
…not to mention decent channel resistance.
The e-minis have gone essentially nowhere after selling off at the close.
While ES tagged its .886 yesterday, SPX never reached its. So, we could see another cycle up powered by USDJPY. The only problem is e-mini buyers are reluctant to bid up over 1894. By my calculations, getting SPX to 1897.63 will require ES reaching roughly 1895. Who’s going to bite the bullet?
It’ll take a big spike in USDJPY — pushing through the SMA20 at 101.92? — which normally would have occurred at 15-30 minutes prior to the close yesterday. HP’s goof seems to have put a damper on the normal algo action. Now…they’re a bit confused.
Back in the old days, before the word “market” required quotation marks, this wouldn’t be an issue. Investors would look at things like earnings, the economy, geo-political events, etc and decide whether they justified higher prices.
I suspect it’ll happen, and what better time than a holiday weekend? Low volume and minimal attention from real investors can work wonders — especially when the land of milk and honey lies just beyond 1900.