Charts I’m Watching: Oct 17, 2014

More Fed/ECB/BoJ-speak, overnight ramping.  The futures indicate a nice bounce higher — which is to be expected on OPEX.  Perhaps a backtest of the SMA200 or broken white channel?  The downside targets remain the same.

2014-10-17-SPX daily 0600


And, there you have it.  Up 30.25 on SPX, 263 on DJIA.  Someone asked me yesterday whether it was time to start panicking, given the strong sell-off.  As long as central bankers are willing to mortgage our future in order to keep “markets” from crashing…the risk is limited.  In my opinion, TPTB engineered this sell off as a lever to force the Fed’s hand, “look how bad things will be if you take away QE!”  The Fed reacted predictably, with hawks and doves alike buckling under the pressure.  It’s pathetic, really.  But, I don’t see it changing any time soon.

Will stocks continue the decline next week?  I still like 1770-1798 by the 22nd.  FWIW, today counts as a channel midline backtest.  But, though ES backtested its SMA200, SPX hasn’t yet (though it did backtest the broken white channel bottom as we suggested earlier this morning.)  So, it could go either way.  It all depends on what the showrunners have in mind.

2014-10-17-SPX daily 1300

As always, keep an eye on USDJPY, which is almost completely responsible for the intra-day moves.

2014-10-17-USDJPY 60 1315

Have a great weekend, everyone.


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