Today’s pregnant pause is brought to you by the good folks at Acme Marketbots — who would just as soon not allow SPX to reach its .886 during market hours, when traders might do something reckless like short a few overpriced stocks (it’s not just me talking, check out Shiller’s latest.)
As we discussed yesterday and last week, there’s also a Zweig Breadth Thrust in the works. With the daily BT currently at .618, it’s safe the say the bots will do what they can to engineer a close at or near current levels. And, manipulating breadth is relative child’s play for the mens et manus of the PhDs behind the scenes.
What might we be facing, were the algos not in firm control? For one, USDJPY has reached the .886 retracement of the drop from 103.07 to 101.5 that began on July 30. This would ordinarily set up a decent sell off. These days, it’ll happen only if/when the central planners see fit (if at all.)
Truth be told, USDJPY tagged 102.89, and the .886 is 102.897. So, the Bat isn’t technically complete because the engineers haven’t allowed it just yet.
Ditto for SPX — which the bots are holding 1/2 point shy of the actual .886 Fib line at 1981.52. If it does surpass 1981.52, there will likely be some very vigorous pumping of the USDJPY to make sure SPX just keeps on going.
Remember when stocks moved up and down based on earnings, economic and geopolitical events, and good old fashioned fear and greed? The “markets” might have been rigged back then, too. But, at least the guys at the controls put a little thought into it — if for nothing else, to keep up appearances. Sigh…