Our analog is right on track, with USDJPY closing below its 100-day moving average on Friday and again on Sunday.Aside from the 2-day delay to accommodate the month and quarter-end numbers, things are playing out as expected.

The eminis are off about 12 points from last Thursday’s close (SPX was closed Friday) and are backtesting the SMA100 after closing below it yesterday.

Today, we’ll find out just how the carry trade-followers react to a strengthening yen. The dollar is falling off as expected.

Will CL’s resulting overnight ramp job be enough to prop up the market?

EURUSD is doing its part, but is nearing its immediate upside potential.

As to SPX, our downside targets from Mar 30 [see: A New Analog, Part II] remain in place.

continued for members…

Another reminder: unlike some analogs in the past which promised spectacular downside, this one is all about allowing USDJPY’s 100- and 200-day moving averages catch up in order to provide support for another leg up.

For all the moving average excitement, USDJPY has yet to close below the latest rising white channel.  It could easily remain between the channel bottom and the SMA100 for the next week or two — leaving investors in limbo.I know the fundamentals are horrible. I know internal strength is threadbare at best.  I know rising earnings are a sham.  For now, at least, none of that matters as the “market” is almost completely under the control of the central bankers and their accomplices.

Almost.

UPDATE:  12:00 PM

CL should reverse here at the .886 at 51.82.

It is, again, gumming up the works.  As long as a rising yen produces higher oil prices, and higher oil prices are viewed as a good thing by equities (whether fundamentally or, more likely, as critical inputs to algos,) it will be tough to get much downside going.

The narrative has changed from an easily manipulated but simple…

Rising Yen => Falling Stocks

…to a complicated, algo-compliant:

Rising Yen => Falling Dollar => Rising Oil => Rising Stocks

As we’ve discussed before, the equation should change if EURUSD runs out of bounce — which it should soon.  If the euro starts to plunge again, the dollar will maintain its strength even as the yen strengthens.  So, USDJPY can decline without prompting an offsetting rise in CL.

Completely nonsensical from a charting standpoint, but SPX has broken through the TL from October 2014 again.  Ordinarily, this would represent a great buying opportunity.  But, consider what happened last time.  On Mar 30, SPX spiked higher 25 points higher, only to give it all back the following day.  There is an excellent chance of a replay.

I’ve scooted the downside targets over to Apr 14 — the day that, according to the analog, should be the lowest point in the cycle.  It’s guesswork of course, but I’d put the odds as:

•  purple target (2033.88)  50%
•  yellow target (1996.71)  40%
•  red target (1943.18)      10%