SPX and ES got within a point of our neckline targets yesterday before the algos panicked.

It’s not that the necklines or SMA200s won’t get tagged – keep an eye on the close — it’s just that not enough wildebeest had gathered at the watering hole.  With VIX safely back down below its SMA200, this shouldn’t be a problem for long.

Targets that were tagged yesterday included CL, RBOB and TNX.  Targets yet to be tagged include USDJPY, COMP and ZN.

Should be an interesting day ahead!

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It seems like it’s been forever, but most of our targets are now being tagged or are on their way to being tagged. So, if I hear one more talking head on CNBC say “no one saw this coming,” I’m going to lose it.

After two weeks, WTI’s flag pattern finally broke; it’s off another 3% this morning and likely to reach 57.93 later today — completing a sweet 13% short from Apr 23.  If 57.93 doesn’t hold, look for 55.55.

USDJPY also finally broke down and is headed south fast.  If/when it breaks 109.88, look out below.As soon as VIX pops back above its SMA200 on its way to a 20 handle, we’ll know SPX/ES are finally going to be cut loose.

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Futures regained most of yesterday’s losses on the back of a VIX smackdown and a sharp ramp in USDJPY.  Still, ES is hovering just below its SMA10.

For those playing BA, note that it has finally joined AAPL in backtesting its SMA200 – clearing the way for the next leg down as long as it remains below 363.41.

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Most of the rallies since our top call on Apr 30 have been followed by sharp sell-offs during the after-hours.  This obviously makes it very difficult for trend followers who don’t trade in futures. But, it also smacks of insider/specialist positioning — sucking in those playing a rebound who are then stuck the following morning or the Monday following OPEX in a losing position. It reminds me of that great scene in Trading Places where Louis Winthorpe III (Dan Akroyd) and Billy Ray Valentine (Eddie Murphy) snooker the Duke brothers in the orange juice pit.

While yesterday’s action was apparently a headfake, it remains to be seen whether or not it represented a meaningful breakout.  Again, it’s doubly hard to tell on OPEX.

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After 2 1/2 weeks of a steady, orderly decline, stocks are poised to break out this morning. Is it another head fake, or does it represent an actual shift in direction?Fortunately, the algo factors offer some important clues. The critical price level to watch is ES 2844.

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Is this really, as Trump maintains, the “greatest economy ever?”  Hardly.  Sure, changes in the way that inflation and employment data are calculated/defined have allowed the government to report generally positive results.  But, one needn’t dig far beneath the surface to realize that they not only don’t represent the real economy; they’re downright deceptive.

Because inflation data is baked into so much other economic data, it renders the whole lot of it suspect — not to mention inconvenient.  Because inflation is vastly understated, some of the barometers that argue for dovish monetary policy are sending false messages.  And, because unemployment is vastly understated, some of the barometers that argue for hawkish policy are sending false messages.

April advanced retail sales figures came in ugly.

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As we wait for the broader indices to do a little fine tuning, it’s worth taking a quick look at some of the more bearish developments that probably weren’t part of the script.

First, AAPL broke down below its SMA200 yesterday to tag our 182.85 target.  This, in addition to the channel breakdown, leaves it in a very precarious position.  Only a single channel line stands in between it and another big drop.  The only bounce which could save it at this point would be all the way back up past 193.

Then there’s BA, whichh tagged our 337.46 target yesterday.  This tested a very important trend line from Feb 11 2016 which, if broken, would open the door to a critically important test at 325.There other individual stocks worth watching.  But, these are the two which deserve special scrutiny.

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