We should get the follow through to Friday’s downside target today.  Beyond that, it depends on how much CL and USDJPY are ramped as the “market” opens.

USDJPY hit our upside target on Sunday, then tested the waters on a reversal until the eminis began to sell off in earnest before rebounding to its SMA5 200.  Interpretation: more downside.

While CL continues to conveniently ramp just as the daily session opens, giving stocks a boost until, conveniently again, the “market” closes.The past few days illustrate how CL is being recycled to provide its timely daily boost, then reset overnight.

Anyone who has read any of our many articles on BoJ intervention, or yesterday’s Bloomberg article on how the BoJ has become a top-10 owner of 90% of the Nikkei 225, should have no trouble putting two and two together.  A good primer:

How to Engineer a Rally

Bottom line: these daily CL ramps are without doubt the handiwork of the BoJ, probably in concert with other central banks.  Of course, we’ll potentially get another dose of central bank reality with both the Fed and BoJ meeting this week.

continued for members... (more…)

The USDJPY is soaring after the latest machinations out of Japan (rumors of helicopter money), and the futures are yawning.

But, even so, the S&P 500 futures are actually off a little — very unusual behavior for a “market” fueled almost entirely by USDJPY and CL.

CL, for its part, is currently up 1.5% — a very typical snapback rally after losing trend overnight.  Still, ES isn’t responding.

I’d like to think it’s because TPTB would like us to nail our next downside target.  But, I suspect something more important is at work.

continued for members… (more…)

The EURUSD did an about face this morning, as everybody and their uncle seems to have front run the ECB yet again (I’ll be surprised, one day, when it doesn’t happen.)The hilarious part is that the USD decline occurred right in the middle of a (rare) CL decline.  Our forecast had called for a declining dollar, so we’ll overlook the obvious incongruity.  Since when does anything involving CL make sense anymore?

continued for members… (more…)

With the narrative so egregiously inconsistent with reality, even central bankers are having a hard time maintaining a straight face while propping up oil.  And, the credibility ship sailed a long time ago for these guys.

With CL going sideways overnight (the equivalent of a disaster in any other security), it’s back to propping up stocks with a good old fashioned USDJPY ramp.  It was good for 12 points on the eminis overnight.

continued for members… (more…)

Sometimes, I take no joy in being right.  Such was the case yesterday, when CL’s utterly nonsensical rebound led stocks to new highs.

…just watch CL’s rebounds during today’s session.  I promise you that one will occur every time SPX starts plunging just a little too fast.

The rebound was good for 20 points on SPX, and 30 points on the eminis.  Even if TPTB bought every single contract on the push through the SMA200, it would amount to only $324MM in margin (which central banks needn’t pay, of course.)

That, in turn, pushed $150B in e-minis 0.75% higher (about $1.125B) and $20 trillion in the S&P 500 0.75% higher (about $150B.)  Not a bad return on your money for a little harmless intervention.

continued for members… (more…)

Since SPX gained 270 points on oil’s rally from 26.05 to 42.49, that’ll all be undone now that oil’s rise has been exposed as a sham, right?  Don’t believe it.

Though Doha failed spectacularly, CL has regained 2.5% of its losses on — what else? — price intervention.  And, before you start slinging conspiracy theory accusations, consider the headlines of the last week, where banks have fessed up to manipulating gold prices — after previously copping to interest rate and currency manipulation.

Doubters, just watch CL’s rebounds during today’s session.  I promise you that one will occur every time SPX starts plunging just a little too fast.

Oh look, there’s one now.That’s the good news for oil supporters.  The bad news is that the bounce from 39 back to 40 backtested the now broken SMA200.  Not saying it can’t be regained, but it’s a little tougher (more expensive) when the price manipulation is laid bare for all to see.

continued for members… (more…)

Good morning, all.  Virtually nothing has changed from yesterday morning’s post.  The upside and downside targets remain the same, with CL the big wildcard.  I’m still traveling, USDJPY and CL will still determine equity prices, the oil summit is still this weekend, and today is still OPEX.

Trade safe, and hold over the weekend at your own peril.  I’ll add more later if I’m able.

A reminder: I’m traveling today and won’t be able to update charts intraday.  So, I’ll leave you with a few key charts worth keeping an eye on.

*  *  *  *  *

Yesterday saw SPX tag two more of our upside targets. The remaining targets from yesterday’s update remain unchanged.  If we get a backtest of any magnitude, it should be to the gray channel midline somewhere between 2071.20 and 2073.70 (depending on when.)USDJPY, having dragged SPX out of its downtrend, has fallen back to its more reasonable red channel.  Unless CL offsets by remaining above its SMA200, USDJPY might be sending the all-clear for the backtest mentioned above.

DX is certainly ready for at least a small backtest to let its moving averages catch up, while another post-OPEX leg lower remains my leading scenario.  CL is digging its heels in, having pushed above and backtested the 200-day moving average (40.94) in advance of this weekend’s big oil summit in Doha — which is almost certain to disappoint (but, certainly not until after OPEX.)

Check out this nice piece by Bloomberg on the players’ strategy to put a floor under prices [aka price manipulation] at current levels [aka the SMA200.]    If it holds, it opens up the .786 and .886 at 45.6 and 48.06 respectively.  The past week or so has seen repetitive ramp jobs starting around 3am, just in time to get “markets” nice and frothy by the time they open and, not so coincidentally, continuing until about the time they close.This being OPEX week, look for more of the same.

GLTA.

If bad news is good news, the economic data this morning was terrific.  Retail sales and PPI both came in well below expectations, bolstering the argument for fewer rate hikes in the months ahead.

Of course, this policy ignores the reality of rising oil, housing and food prices.  That’s fair, as those price increases only affect folks who sleep, eat or drive (and the growing number of people living in their cars.)

From briefing.com:

What the data doesn’t explain, of course, is why DX ramped so much overnight.  With rate hikes presumably more firmly on the back burner, it should be plunging rather than strengthening.

The answer, which won’t come as a surprise to any of our members: central bankers got out ahead of the news, ramping USDJPY much higher in advance of the data.  The NKD gained as much as 3% overnight on rather suckish news out of Japan.The USDJPY ramp explains why ES notched all of its 10+ point gains overnight, before the good/bad news even hit the wire.  And, don’t forget, Friday is OPEX.

continued for members… (more…)

The good news for traders is that the recent volatility has been somewhat predictable and, thus, tradeable.  The bad news is that CL and USDJPY-driven manipulation is alive and well.  We got a great reminder just today, when the latest unfounded rumor of an oil production freeze from a supposedly knowledgeable insider saved SPX from breaking down.

A quick peek at SPX shows a fairly tight rising channel with minor retracements along the way.  It originated back on Feb 11 when we called a bottom in CL (it was) and USDJPY (it wasn’t.)   And, it topped out just past our Feb 18 upside target of 2065, at which point it started going sideways.

The nifty thing about sideways movement is that it often sets up Head & Shoulders Patterns.  Such is the case here.  Only, the folks in that windowless room pushing the big red “RAMP USDJPY” and “RAMP CL” buttons have steadfastly prevented any H&S patterns from playing out.

The chart below shows several that were either prevented before they could get going or were interrupted midstream by very deliberate moves in CL and/or USDJPY.  We’ll focus on two in particular, labeled in red and yellow.

Many members were puzzled that SPX could rally even while USDJPY was plunging in value.  Yet, as the chart below shows, every single SPX bounce was enabled by a USDJPY bounce — even when it was just intraday.

And, some were downright sneaky, like #3, where USDJPY popped back above a broken trend line.  The stunt was repeated with bounce #5.  Bottom line, it didn’t matter much what happened to USDJPY overnight, as long as it was on the rise heading into the daily trading session.CL presented a similar pattern — bouncing at coincidentally convenient times.  Note that SPX’s pattern of sharp reversals at one of the H&S neckilnes was foiled only twice:

• when CL dipped below its SMA100 and the midline of its major rising channel (#4 & #5)
• when CL fell back below an important trend line of support (#7)

When CL gapped back above that yellow TL, SPX was only too happy to pop back above its yellow neckline and tack on 30 points.

SPX fell back below the yellow neckline again just this morning.  For whatever reason, something about another IMF downgrading of global growth rubbed investors the wrong way.  No problem, as within minutes, CL popped back up past its SMA200 on the afore-mentioned production freeze rumors.

Since it topped the SMA200 at 41.10, CL has clung to its rising SMA5 10 in order to keep SPX on the rise.  It’s only in the past 20 minutes or so that CL has settled lower, no doubt in order to facilitate an SPX close on the white channel top rather than above or below it.Remember when making good investment decisions meant studying earnings reports, deciphering economic events and evaluating management and competitors?  Not one of those things matters anywhere near as much, anymore.  Successful investing has become all about anticipating when those USDJPY and CL buttons get mashed, and very little else.