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.

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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.

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Friday, USDJPY plunged below the bottom of the rising purple channel it’s been in since Feb 24.  Between that and CL’s initial sell-off, it was enough to shave about 20 points off ES’ overnight highs.   SPX had been nearing our 1999 target, and it was enough to make us wonder if the tag would be delay a week or more.

But, the “markets” opened, CL quickly rebounded 6.5%, and USDJPY popped right back above the channel bottom, and SPX gained 24 points from its lows.  Ah, the delights of algo-driven trading.

It’s a pattern we’ve seen over and over during the past week, and is reminiscent of pretty much all of 2014.  So, what does it mean if USDJPY is doing it all over again this morning?  Should we take it seriously this time?continued for members… (more…)

Gold reached our next upside target range this morning, tagging 1280.70 a short while ago.  Recall from our February update [Update on Gold: Feb 10] we were looking for GC to test a TL connecting several tops since May 2013.

If [the trend line] is broken, then the white .886 at 1277.90 comes into view.  Note that it’s in close proximity to both the yellow .382 at 1286.30 and the purple channel midline currently around 1274.

The TL was broken later that day, and it was off to the races for GC, which tacked on 7.3% in the process.While I’m always happy when a forecast works out so well, I’m fascinated by why it worked out.

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February’s results came in at 24.43% versus -0.28% for the S&P 500 — a 24.72% outperformance.

The early part of the month was the most profitable, with the market nearing free-fall at times.  But, the entire month featured above-average volatility — with only 18 of the 21 sessions exceeding 20 points in intraday range.

This fruitful environment, however, wasn’t without its challenges.  One-third of the sessions opened with a significant gap higher or lower, and 2/3 featured a reversal of trend from the previous day’s close.  In other words, scalping and day trading continued to benefit while swing trading was very tough.

Having said that, our mid-range forecast has been fairly accurate.  SPX gained over 6% by the end of the month following our long entry point on Feb 11 and, just today, reached our 1999 upside target — a total of 180 points in about three weeks.

We averaged a little over 6 position changes per session in February, with about 2/3 being profitable.  This number was inflated in the last half of the month when many typically attractive shorting opportunities were negated by CL manipulation and trades were closed at essentially no gain.  Our biggest loss on a single trade was 0.38%.

Our average monthly results since Jan 2015 increased slightly from 18.58% to 19%.

Following @pebbletrades?

I set up a private Twitter account @pebbletrades to disseminate notices of intraday position changes.  If you trade frequently, just go to the twitter page and click “follow.”  This generates a request that I can then approve.  It’s generally pretty fast unless you make the request in the midst of a busy session.

If your twitter handle bears no resemblance to your actual name, please drop me a line saying so.  This service is for subscribers only, and I’d hate to inadvertently exclude you.

Note that I will still post all intraday position changes on the website, first.  Once the post is entered, I tweet a trade alert that references the position change in some way (e.g. “target reached.”)  Hopefully, these tweets will make it less necessary to constantly refresh the web page throughout the day.

It was a few short weeks ago we slapped a 1999 target on SPX for early March.  180 points later, we’re here — though it hasn’t been without drama.  And, there’s likely more to come today.We’ll take a look at the path forward.

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Last night was a quiet session for ES, CL and USDJPY.  With the futures off just 2 points and our upside target within easy reach, the question is whether it’ll occur today or towards the middle of the month — which actually suits the charts a little better.

USDJPY shed some of its gains, but is holding on to channel line support.continued for members… (more…)

Note: We’ll be doing a little site maintenance this evening.  The site, or your access to the membership area, might be down intermittently.  Thanks for your patience!

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Yesterday’s runaway rally has been ascribed to a number of things.  But, the only factors that really mattered were USDJPY’s 18-hr 1.8% intraday spike and CL’s nominal new highs (bringing the total ludicrous rally since Feb 11 to 33.4%.)  This is the equivalent of 660 SPX points in about 3 weeks time.

As we’ve pointed out countless times before, it isn’t just that CL keeps moving higher.  It’s when.  It’s essentially gone sideways since Feb 18.  But, the daily spikes higher are occuring just prior to or during “market” hours, thus providing the maximum algo-ignition benefit to stocks.  If stocks start slipping, you can usually count on CL to start pushing higher for no particular reason other than to prop them up.

After hours, CL can decline back to where it was without doing any damage to the ongoing rally.  ES is much more easily propped up in the low volume overnight session.  It’s a ploy that was constantly employed during 2014 and early 2015 with USDJPY.  And, it’s pretty darned effective.

With fresh crude inventory data coming in at 10:30AM, we’ll find out whether CL is able to provide further gains, or USDJPY will take over from here.

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I have to be out of the office this morning, but will hopefully be back before the close.  In the meantime, here’s an abbreviated look at what’s driving the “markets” this morning.

USDJPY has rallied 1.05% off its overnight lows, as the BoJ sells 10YR’s at a negative rate (0.24%) for the first time ever.

CL’s Nuff Pattern has extended its gains since early yesterday morning to 6.8%.  A Nuff Pattern, for those who don’t know, is where CL increases just ‘nuf to keep SPX on the rise.In this case, it was ‘nuf to spike ES 27 points off its after-hours lows.  Look for SPX to backtest the broken white channel midline around 1945 in its opening salvo.

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In our November 2015 update [see: Update on EURUSD], we noted that EURUSD had reached a potential bottom at 1.0592.

Today, EURUSD reached a key technical level, completing a Bat Pattern that should see it rebound strongly.  We’ve been anticipating this day ever since DX broke out three weeks ago.

It bumped along for 8 sessions before the ECB finally took action.  EURUSD soared 4.3% in a day.  But, as has so often been the case, Draghi’s actions were severely front-run and resulted in stocks selling off sharply [see: Draghi Disappoints.]

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