Does it Count?

If the “market” is driven higher by blatant manipulation, in clear defiance of the fundamental laws of economics, does it still count as a rally?

Yesterday, the FOMC delivered a near carbon copy of its Sep 17 missive — the one that precipitated a 148-pt ( 7.3%) decline in SPX. Sure enough, SPX fell immediately after the press release. But, this time, central bankers were better prepared.

They started by pushing CL up and out of a well-defined falling channel. It would go on to rise 8.5% in less than 24 hours, and is up 9.2% as we go to press.2015-10-29 CL 60 5 0635Also within minutes, USDJPY was ramped (out of its well-defined falling channel) up to and over its  200-day moving average.2015-10-29 USDJPY 60 0615Needless to say, SPX reversed its initial 21-pt sell-off and spent the rest of the day playing Follow the Algos.  It finished well above its .786 Fib — the first one since the September lows that showed any promised of providing at least a modest retracement.

But, consider the chart below — which shows USDJPY’s 5 previous tags of the dashed, red trend line.  ES – the thin purple line – didn’t react all that kindly in the past.  Is there any reason to expect it will this time?

2015-10-29 USDJPY v ES 60 0610continued for members


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