CL’s rebound since our Feb 11 bottom call [see: USDJPY Finally Relents] has been nothing short of spectacular.  It’s not surprising that it has brought SPX all the way to the bottom of our target range a little ahead of schedule.  As we noted in last week’s forecast update, our 2050 upside target raised a few eyebrows when we first posted it on Feb 26 [see: Cornered Bankers Resort to Ramping.]

Now that we’re here, we have to wonder if CL has the legs to take it further.  If it pauses here at the white .618, how will TPTB get SPX over the hump?

continued for members… (more…)

I’m traveling for the remainder of the week, so am not able to post intraday charts.  Here are a few, however, that should serve as quick, big picture references.

continued for members… (more…)

Following disappointing efforts by counterparts at the ECB and BoJ, it’s Yellen & Co’s turn to attempt to reinvigorate the stock market economy.

Will they or won’t they raise rates again?  Most say they won’t.  A few brave souls say they will.  The “market” seems confused.  The key is the current position of USDJPY, CL and SPX/ES.

continued for members… (more…)

The BoJ’s latest pronouncement is probably the closest we’re ever going to get to “we have no idea what we’re doing.”  Bottom line, it’s more of the same — but, without the language indicating they could go even more negative on rates.

The USDJPY sold off (but, only to the closest and easiest TL to defend.)Futures are therefore taking it on the chin, and look likely to tag yesterday’s downside targets.

continued for members… (more…)

When we quietly placed a target of 2000 on the big picture charts in mid-February [see: Cornered Bankers Resort to Ramping], 200 SPX points ago, it raised a few eyebrows.  How in the world, given all the troubles facing global economies, could the market rally 10% in such a short time?

It actually reached 2000 a few days before projected.  And, the answer to the “how” question then, as now, was CL and USDJPY.  As we pointed out in The USDJPY Finally Relents, USDJPY and CL were both testing critical, long-term support.  Had they not bounced, stocks would have dropped precipitously.  But, they did.

And, now we face the question of whether SPX will reverse strongly or merely take a breather here.  With Kuroda announcing any BoJ policy changes tomorrow and Yellen doing the same on Wednesday, “markets” remain in the hands of the central planners.  Wouldn’t it be nice if they’d just publish future stock prices while they’re at it?

continued for members… (more…)

Once in a while a forecast comes together so nicely that people accuse you of having an unfair advantage.  From one of our members on Friday:

Are you sure you don’t have a time machine to travel to the future?  On Feb 10, you had a upper target of XLF at 22.51.  The actual close today is 22.49.

In all the excitement over the broader market, I haven’t paid much attention to XLF since Feb 10, when it closed at 20.28.  From that update:

Looking ahead, I’ve identified a few potential targets.  It think the next downside target has to be the purple .886 at 19.26 where it intersects with an expanded falling red channel midline in the next couple of days.

If it fails, the white .382 and that midline intersect in mid-April.  This would also complete a pretty clear C=A corrective wave.

If it holds, the immediate upside case is pretty much limited to a backtest of the broken yellow TL and white channel bottom at 22.51 in mid-March.

XLF bottomed out the next day at 19.53, 0.27 from our downside target.  It then rallied rallied over the next month, reaching 22.52 on Friday, just .01 from our upside target.It’s a nifty 15.3% return based solely on chart patterns, harmonics and technical analysis — and, a sharp poke in the eye for those who insist technical analysis doesn’t work.

Of course, nailing a target is a double-edged sword.  There’s the joy of a job well done, but the fear of badly botching the next forecast.  With that said, we’ll take a look at what to expect.

continued for members... (more…)

The bounce off the Feb 11 lows has puzzled many investors.  But, it’s not all that complicated.

As more and more traditional investors and traders abandon investing, markets are increasingly driven by complex algorithms.  The most powerful is the yen carry trade [what’s this?], as seen in moves by the USDJPY.  The S&P 500 futures (ES) are shown for comparison purposes.A close second is an algorithm driven by oil prices — specifically CL futures.  We’ve been following this for a long time — first noticing the effect in the Jan and Mar 2015 rallies and writing about it frequently, including this Oct 2015 post: What Really Drives Stock Prices?If you want to know, for instance, why stocks suddenly reversed off their post-Draghi plunge, look no further than the short-term CL chart.  With ES in the midst of a 40-pt swoon, CL suddenly reversed (the yellow arrow.)  In rather short order (and, after USDJPY finally reversed) stocks got the message and rose along with them.Ditto for last night’s ramp job: all CL and USDJPY.  It should be enough for SPX to top harmonic resistance at 2009.13 this morning.  It will blow up a number of bearish patterns, enabling the rally to continue unmolested.Don’t take my word for it.  Former Fed President Dick Fisher, in a candid interview on CNBC earlier this week, confirmed what many have been sensing for years:

“…we injected cocaine and heroin into the system, and now we’re maintaining it on Ritalin….This has been a hell of a rally.”

Today, the injections are taking the form of higher gas prices.  On February 11, I filled up my wife’s car with regular grade unleaded at $1.94/gallon.  Today, that same station is selling gas for $2.15/gallon.

That 11% increase pales in comparison to the 50% increase in CL over the same period.  But, for anybody on a tight budget, it’s a bitter pill to swallow — particularly when they enjoy few of the benefits of the wealth effect Fisher and his cronies are now crowing about.

No doubt, the Have-Nots’ sacrifice (think of it as another gas tax) is much appreciated by those whose portfolios have increased in value since the Feb lows by — come on, you already know the answer!  — exactly 11%.

continued for members… (more…)

Having been chastised in the past for not doing enough, today the ECB threw a little of everything at the problem of falling stock prices inflation that’s too low.  The Special High Intensity TLTRO (S.H.I.T.) in particular is nothing but a giveaway to banks who are, of course, the power behind the throne and the primary beneficiaries of the measures.

The result was a EURUSD that tested its former lows, only to bounce back to higher highs.  Will there ever come an ECB announcement that isn’t front-run by every trader on the planet?The question is often asked: “are central banks out of ammunition?”  Wrong question.  The correct question — the only one that matters — is whether they remain willing to manipulate the real drivers of the “market”: currently USDJPY and CL.

Futures initially spiked, but have fallen back to barely green on the day, clinging for life to the SMA100.  Part of the problem was that the spike took ES up to the .618 (2007.37) of the fall from the May 2015 highs to last month’s lows.  Poor planning on the algo-masters’ part.  But, the day is young.continued for members… (more…)

For a moment, yesterday, it almost felt as though markets weren’t being guided every step of the way.  CL was actually dropping — in sync with reality.  USDJPY was actually dropping — in sync with reality. And, stocks got all the way down to our 2nd downside target.

That was then.  This is now.  With CL within 0.16 of a believable turning point, TPTB decided enough was enough.  CL turned tail after the close, and is currently backtesting the SMA100.  Mark it down as yet more evidence in the “someone’s manipulating CL” case.  By the way, Zerohedge has run a series of articles regarding JPM’s role in levitating CL — for purposes of averting atrocious losses in its energy loans.  Great food for thought, though I would add BoJ, ECB and SNB to the cast of characters who might well be involved.

continued for members… (more…)

By my count, SPX either tagged or passed through the SMA100 over 30 times in the past two sessions.  ES continued the assault overnight, with the latest attempts fueled, of course, by USDJPY and CL.

Looking at CL, though, it’s just possible that the moving average and Fib combination that led us to identify 1999 as a turning point several weeks ago will actually hold.

continued for members… (more…)