The “market” makers are doing an excellent job of propping this puppy up today.  SPX just tagged two .886 Fib levels, and has barely reversed at all.  Perhaps after the 12:00 print is in.  Or, it could be because the IH&S target of SPX 1893 is still out there. In either case, it continues to be all about the yen carry trade.

Be careful about chasing any push past the former highs, as these have frequently occurred simply to stop out those paying attention to the technicals.  The key is to pay attention to the USDJPY and NKD.  When they’re rising, so are stocks.  When they’re falling, stocks are following along if they feel like it (except in the after-hours, when declines are only allowed when SPX breaks out and closes at the high for the day.)

Watching Yellen today, I have started thinking of the “market” as a building that she and Bernanke built that rises to the sky.  It features elevators, of course, but they only go up.  If you want to go down, you must take the stairs.  But, there’s a team of snipers on every landing with orders to shoot to kill.

At this rate, I suspect TPTB have decided we’re going to tag SPX 1900 come hell or high water (or lousy macro data/earnings/war/pestilence/locusts/asteroids…okay, maybe an asteroid striking the Eccles Building would do it.) It will break all kinds of technical and chart pattern rules to get there.  And, it’ll probably happen in the after hours or over the weekend — so good luck catching it.

From Zerohedge — because no other news organization would dare touch it…

Spot the Unrigged Market

Bulls are going for an IH&S on the post-Yellen melt-up.

Can it get there?  Perhaps.  But, NKD and USDJPY argue against it.  The Nikkei’s rising white channel broke down yesterday. And, this morning’s rally should be seen as a backtest.

Likewise, the USDJPY got a bounce off a .886, but merely backtested the broken grey channel.  The flag pattern/SMA200 target remains.

With the yen continuing to strengthen, Japanese econ data continuing to weaken, and the BOJ sitting on their hands for now, it’s hard to envision a change in direction until the SMA200 is reached.

The tricky aspect of it, though, is that much of the damage is being done at night, when ES can be and is propped up.  For instance, a 2,500 contract order sat on the books at 1861 all night — preventing the .618 tag at 1860.  So, it’s hard to say whether ES/SPX can remain untouched by all the bedlam surrounding it.

GLTA.

It’s all about USDJPY, today.  The flag pattern completed as expected and the pair has broken down from the white rising channel, plunging to 101.53 so far.

The pattern targets 101.02, though there is potential Fib support at multiple levels including 101.51, 101.46 and 101.31.

Most of the action occurred overnight, so the impact on ES has been muted.  But, there should be more downside after the latest backtest completes.  The .786 at 1864.99 would make for a good target once the .500 at 1871 falls.

USDJPY’s white channel broke down yesterday as expected, and the grey channel bottom and yellow midlines are currently providing support.

The strong reversal off the SMA100 on Friday was a pretty good confirmation of a negative picture going forward. I suspect the next moving average test will be the 200-day just below 101.

ES retraced to the white .500 in the bullish pattern, but could easily slip to the purple .618 (1860.04) or .786 (1853) if things get going to the downside.  Note that the .786 is aligned with the red channel bottom.

UPDATE:  11:20 AM

Follow the leader again this morning, with USDJPY’s bounce leading stocks higher by about 3-5 minutes.  As usual, stocks were only to glad to catch up to and surpass the pair’s move.

Only problem for stocks is that USDJPY, while taking out last night’s highs, has also completed a bearish flag pattern that targets the SMA100 at around 100.95.

And, it’s just a pimple on the but of the large flag pattern (below, in white) that targets 100.20 or lower.

Whether it’ll be allowed to play out is another matter.  Remember, tomorrow is Tuesday.  In fact, Thursday is the only day this week without scheduled POMO.  In other words, there’s a decent chance that this bearish pattern will play out in the after hours when the banksters can more easily keep the futures afloat.

Stay tuned.

Some big tickets were dropped at the jobs report announcement this morning, spiking USDJPY to test the SMA100 at the top of the white channel — where it promptly reversed and tagged the bottom of the channel.

It seems to me that the odds are about equal of a spike to 103.8 or a plunge to 99.84 in the coming week — with the outcome largely dependent on how bad things get in Ukraine [LIVE FEED FROM ODESSA] this weekend.  The upside case would take the pair back to the LT red trend line, the .886 of the recent drop, and the top of the falling yellow channel.  Whereas the downside case is to the bottom of the channel and a number of important Fib levels.

The large red rising channel has always had two different possibly placements.  The steeper of the two would characterize everything since Apr 10 as a backtest, with the upside case at 103.8 potentially completing the backtest.  I’d keep an eye on the moving averages, about which the pair is currently bouncing.

The 10-year note briefly dipped below the Feb 4 lows, only to be kicked back above.

Like the Nikkei and the USDJPY, TPTB have put a very effective floor on any breakdowns — thus preventing stocks from plunging.  Like USDJPY and the Nikkei, the swings have had lopsided effects.

Plunges in TNX have brought minimal corrections to stocks, while spikes back to former highs have produced new highs in stocks.  And, lately, the spikes have formed a series of lower highs to go with the lower lows — even as stocks make new highs.  This divergence is becoming hard to ignore.

Quick look at the Nikkei…the channels and moving averages continue to argue for a downturn and follow through on the H&S patterns.  But, note that the BOJ has continually defended the neckline.

It has run sideways for so long that the SMA10 is testing the SMA20.  But, again, the harmonics suggest at least a modest downturn — if only to test the neckline again.  Watch out if NKD fails at the moving averages — the expected outcome IMHO.

USDJPY shows a likely backtest of the rising white channel within the confines of the falling purple channel — a bearish setup for stocks.  Note that it’s also trying to push above the SMA20, having plunged below the 10, 20 and 50 yesterday.

After the BOJ balked at amping up QQE in the face of obviously weaker economic signals, we can hardly expect market forces to push the pair higher.  Given the growing inflation problems for consumers, I imagine the BOJ will be content to let the yen remain in a trading range if not actually appreciate a little.

And, ES is stalling after completing a Bat Pattern within the larger Bat Pattern.  Two .886 retraces in a row could be trouble — but only if the white midline and white channel bottom are broken.  Note the sloppy IH&S Pattern in red.  It’s a mess, but in this “market” where only bullish patterns play out, who would be surprised?

UPDATE:  11:30 AM

SPX is about to tag its .886, completing the Bat Pattern off its highs.

USDJPY didn’t make new highs, but pushed slightly above its SMA20 to complete a .886 retrace of this morning’s drop.