Our membership promotion will wrap up in another couple of days.  If you’re tired of taking cues from the perpetually bullish talking heads, this is a great time to take the plunge.  Volatility is high, and we’re racking up some great results [see: HERE.]

Pebblewriter.com has provided uncannily accurate market guidance since our first post on May 2, 2011 where we noted a top was close (May 2 was the top) to our latest top call on May 19, 2015 [we were one day early, see: The Last Big Butterfly] and our latest bottom call on Feb 11 [see: USDJPY Finally Relents.]

We’re currently offering Charter Annual memberships for about half-off the usual price.  With a Charter Annual membership, your rate is guaranteed never to increase for as long as you’re a member.  For more details and to sign up now, CLICK HERE.

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This post is a continuation of the intraday comments and trade alerts originally appended to this morning’s Update on CL.

Be sure and peruse that post, as it contains critical components of the outlook for the next week or two.  Also, note that I have updated gold, USDJPY, the Nikkei, and financials in the past week.

I am in the process of updating the current forecast in the wake of our Feb 11 bottom call [see: USDJPY Finally Relents] and should have it posted later this afternoon.

As you know if you read that post, this morning is all about oil — which gapped higher last night in anticipation of today’s inventory report due out at 11:30.continued for members… (more…)

In last month’s post [see: Update on Oil, Jan 6] I noted that CL had dropped to 34.17, the target we posted in mid-December (the yellow arrow below.)  I then donned my tin foil hat and added:

In an unrigged market, it would suggest a possible bounce to the purple midline and .618 Fib at around 42.78 — a very playable 25% move.  But, the noose of USDJPY is still hanging around CL’s neck, and could easily drag it lower.

USDJPY can’t move higher (yen lower) unless TPTB accommodate Japan with lower oil prices to compensate for the hit of higher imports (chiefly oil — which is priced in USD.)

And, if USDJPY doesn’t start moving higher soon, we’re going to see a lot more days like today, with sub-2000 SPX [see: Yen Carry Trade.]

Over the next two weeks, with USDJPY dropping through major support, SPX shed 9.9%.  CL plummeted 21%.  But, it wasn’t done.

When I finally called a bottom on Feb 11 [see: USDJPY Finally Relents] CL had plunged 28% (totaling -75% since last June.)  It had also nailed the lowest of the targets I had identified in January.

Is the worst over?  continued for members...

As we discuss on a daily basis, CL is nearly as important as USDJPY in fueling stock algorithms.  At times, it seems more important.  But, that’s chiefly due to the huge price swings that often prompt ES/SPX ramps.

So, it’s no surprise that CL has bounced 31% in the past week in an effort to drag stocks out of their swoon.  We saw a number of attempts to do the same between Jan 28 and Feb 4 — each one of them ultimately failing.

What makes this rebound different is that (1) it’s accompanied by a significant rebound by USDJPY, and (2) it has broken out of the falling red channel and gapped back above the purple neckline and the 10, 20 and 50-day moving averages.

The big picture:And, the close-up:

We would normally expect a backtest of the broken red channel, the broken purple neckline and/or the SMA10 and 20.  But, these are not normal conditions.

TPTB pressed CL into service to save the global stock market — not follow the rules regarding chart patterns and satisfy yours truly.  Therefore, there’s a possibility that it’ll continue ramping up to our next upside targets at 38.49 or 39.89 by the end of the month.

Note the cluster there consisting of the SMA100, the falling gray channel top, the red, dashed TL, and the falling white channel midline.With OPEX tomorrow, it increases the odds of at least a plateauing at these prices until early next week.

If I’m wrong, and a backtest is forthcoming, then CL should target 31.49 to close the gap — but, probably not until next week.  But, if I’m right, this is a dangerous vehicle to short.

This move is designed to make a statement to the algos — that CL is back.

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A quick update on stocks, as I’m running a little late this morning…  I’m looking for that backtest we never could manage yesterday.  Perhaps SPX 1914-1917.  Much of it depends on USDJPY, which is again threatening to break out. UPDATE:  9:31 AM

I’d short here at 1928.94 for the drop referenced above.  The SMA5 100, currently at 1917.32, is rising to meet it, and this drop could be limited to 1920 or so.If I’m right, USDJPY should drop through the purple TL.One slightly bearish chart to watch today: NKD, which is backtesting the broken purple channel.UPDATE:  9:53 AM

Quick progress report… I believe they’ll use a CL drop to or through the SMA5 100 and 200 intersection at 33.56-33.60 to effect whatever drop they have in store.  Might be holding out for SPX’s SMA5 100 to reach the .146 Fib at 1920.17 around 10:30.  But, a quick drop to the white channel midline at 1914.80ish would also be nice.

I hope ES is off a little, as it suggests 1915 around 11:30.  90 minutes is a long time to wait for a 6-pt additional drop.  Having said that, the red TL is somewhat arbitrary.  No reason to think it’s THE ONE. I’m continuing this thread on the daily post: Charts I’m Watching: Feb 18, 2016.   See you over there…

Our membership promotion will wrap up in another couple of days.  If you’re tired of taking cues from the perpetually bullish talking heads, this is a great time to take the plunge.  Volatility is high, and we’re racking up some great results [see: HERE.]

Pebblewriter.com has provided uncannily accurate market guidance since its first post on May 2, 2011 where we noted a top was close (May 2 was the top) to its latest top call on May 19, 2015 [we were one day early, see: The Last Big Butterfly.]

We’re currently offering Charter Annual memberships for about half-off the usual price.  With a Charter Annual membership, your rate is guaranteed never to increase for as long as you’re a member.  For more details and to sign up now, CLICK HERE.

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Since reaching our 111.60 target (the yellow .500 Fib) on Feb 11 [see: USDJPY Finally Relents] USDJPY has managed to maintain upward momentum — though it’s struggling a bit today.CL has likewise been on a tear since reaching our 26.22 target (the yellow .886 Fib.) It goes to show that algos are alive and well and very much in charge.  But, can it last?  We’ve seen over and over again how TPTB can push prices one direction or the other by manipulating algo inputs — primarily USDJPY and CL.

But, they face basic economic limits.  As the BoJ further devalues the yen, rising oil prices start to bite even more than they otherwise would. There’s a natural limit to how far they can push them both before real damage is done.

As we’ve discussed countless times, the BoJ has painted itself into a corner.  The BoJ can ramp up USDJPY and save the huge securities portfolio that totals over 15% of GDP, but it’ll further decimate what remains of the real economy.

The ECB and FOMC are on the same path, by the way.  It’s just not as dire, given that the debt levels aren’t as stratospheric…yet.

continued for members… (more…)

Our membership promotion will wrap up in another couple of days.  If you’re tired of taking cues from the perpetually bullish talking heads, this is a great time to take the plunge.  Volatility is high, and we’re racking up some great results [see: HERE.]

Pebblewriter.com has provided uncannily accurate market guidance since its first post on May 2, 2011 where we noted a top was close (May 2 was the top) to its latest top call on May 19, 2015 [we were one day early, see: The Last Big Butterfly.]

We’re currently offering Charter Annual memberships for about half-off the usual price.  With a Charter Annual membership, your rate is guaranteed never to increase for as long as you’re a member.  For more details and to sign up now, CLICK HERE.

*  *  *  *  *

Feb 15:

If there’s one thing TPTB enjoy, it’s the opportunity to move markets over a long holiday weekend.  Last Thursday, USDJPY and CL all plunged to key levels of support.  As I wrote then [see: USDJPY Finally Relents]:

This morning, the plunge finally reached significant support: the .500 Fib and the bottom of the rising purple channel from 2011.  USDJPY should bounce here.  If you’re a bull, it must bounce here.  The only question: is it too late?

Start out short, but look for an entry point there — keeping an eye on CL, USDJPY and NKD for signs of a turn.  If it’s to happen, it’ll be because all three are screaming higher.

We closed the short and reverted to a long position at SPX 1825.01, assuming that TPTB would do what it took to support USDJPY and CL and, thus, keep the yen carry trade from completely imploding.

Bottom line, they did exactly that.  Since then, USDJPY has recovered almost 3%…  …CL has soared about 15%……and ES has bounced nearly 5%.SPX easily reached our initial bounce target on Friday, closing at 1864.37.

Assuming USDJPY breaks out of its falling channel (it’s a minor thing to ask, Haruhiko) then SPX should test the falling white channel midline at 1859-1863 (depending on when.)

With another 24 hours or so to make things right, can SPX break through significant overhead resistance?  We’ll see.

I’m going back to my vacation and will post another brief update in the morning. I’ll be back to regular hours on Wednesday.

UPDATE:  Feb 16, 2016

ES has given up some of its gains — but, only enough to backtest the broken SMA20.

continued for members… (more…)

Tired of taking cues from the perpetually bullish talking heads?  Pebblewriter.com has provided uncannily accurate market guidance since its first post on May 2, 2011 where we noted a top was close (May 2 was the top) to its latest top call on May 19, 2015 [we were one day early, see: The Last Big Butterfly.]

We’re currently offering Charter Annual memberships for over half off the usual price.  With a Charter Annual membership, your rate is guaranteed never to increase for as long as you’re a member.  For more details and to sign up now, CLICK HERE.

*  *  *  *  *

They say the first step in recovery is recognizing that there’s a problem.  So far, TPTB have taken the right steps to avert a total meltdown.  Will it work?

The support USDJPY reached yesterday remains unbroken.  And, CL is doing its part, having bounced at our .886 target and already breaking out of its falling white channel.  Its next serious over head resistance should show up around 28.25-28.35.But, more remains to be done – especially for USDJPY.  A recovery from the yen carry trade bust will depend on it breaking out of the falling channel it’s been in since Jan 29.SPX tested the Jan 20 lows and is bouncing nicely.  But, a robust recovery won’t happen until CL and USDJPY have proven themselves to be on the mend — as in, more than a technical bounce.

And, of course, much larger problems remain.  They still haven’t begun to address the fact that the long-term channel from the 2009 lows has been broken, and remains broken.  Furthermore, the large H&S Pattern from April 2014’s lows has been triggered, and remains triggered.

These problems will take more than a 25-50 point bounce to correct.

UPDATE:  9:35 AM

Because I’m supposed to be on vacation today and am likely to be busted any second for working, I’ll leave you all with one potential road map to today’s action.

Assuming USDJPY breaks out of its falling channel (it’s a minor thing to ask, Haruhiko) then SPX should test the falling white channel midline at 1859-1863 (depending on when.)  If that’s broken, we can expect it to try for the the red neckline at 1872ish.If, on the other hand, USDJPY can’t break out of the falling red channel, then we’re likely to see yesterday’s downside target reached.We spend a lot of time identifying important intraday targets that can help generate nice trading profits.  But, this is a good time to take a step back and look at the big picture.  What if the USDJPY isn’t supported here?  Suppose CL has much further to go?

In the interest of addressing those questions (and, scaring the crap out of bulls), I’ve updated the Current Forecast.  CLICK HERE.

UPDATE:  11:31 AM

Everyone’s sleeping late, so I’ll sneak one more post in here.  SPX just reached our initial target of 1859.  I’d either take profits here at 1858.61 on this morning’s long position or at least tighten up stops — as USDJPY and CL have both reached potential overhead resistance.

If they break out, great.  Go long, have fun.  The neckline at 1872 comes into play.But, if they don’t, this could be as good as it gets.  CL has reached the falling red channel midline.  And, USDJPY suggests a breakout of the falling red channel, but could get stuck at the purple channel line and fall back. Even ES is flashing warning signals here with the test of this falling, yellow TL.

 

January was our best month ever.  Our monthly results came in at 36.28% versus a 5.07% loss for the S&P 500 — a nifty 41.35% outperformance.

It was made possible by pretty straight-forward chart patterns and huge volatility.   None of January’s 19 sessions featured a daily range of less than 10 points.  In fact, only one came in at under 20 points.  By contrast, 8 had ranges of over 40 points and 5 had ranges of over 50 points!

Fifty points represents about a 2.5% move, so it’s not surprising we had some phenomenal days.  January 13 [see: That Was a Close One] was a good example.  SPX lost 48.40 points (-2.37%) overall.  But, by anticipating and capitalizing on the huge intraday swings, we were able to rack up gains of 61.25 points (+3.19%)

January was very reminiscent of the pre-central bank manipulation era.  Most days, it felt as though the “markets” were left to their own devices.  Bottom line, it was a real delight for those of us who play both sides of the market.

The month started off with a failure (by 30 points) to reach the neckline of a large Inverted Head & Shoulders pattern.  The subsequent falling red channel (within the falling white channel) proved to be a very accurate guide.  If only they were all like this…

We averaged a little over 6 position changes per session — higher than usual, but not excessive given the greater volatility.  It was also a function of my preference for reverting to cash after reaching a target in order to prevent subsequent bounces from reclaiming gains.

We also go to cash every night, even though it often means leaving some money on the table.  Like December, there were many end-of-day plunges that closed below technical support which were magically ramped back to a big gain in the futures overnight.

Our average monthly result bumped up slightly from 17.10% to 18.58%.   We’re obviously overdue for a quieter month with less spectacular results.  But, if the first week of February is any indication, it’s not going to happen any time soon.

Following @pebbletrades?

A reminder to members, I recently 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 usually 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.

The Deal

I’ve had a few inquiries about holding another promotion.  Our regular annual rate is $1,750 — about $33/week or $4.80/day.  I consider it a pretty fair price for what I have been told is one of the top forecasting services out there.  But, people like deals.  I get it.  Here’s ours.

Last month, I offered a promotional price ($640.42) that reflected the compounded return on a member’s hypothetical $10,000 trading account ($64,042) in the event that they were able to follow every single market call to the letter.  It was a great way to celebrate a successful 2015.

Given last month’s 36.28% results, this hypothetical trading account would theoretically now be up to $87,277.  So, we’ll set this month’s promotion at $872.77.  It’s about half price, which works out to around $2.73/day — less than a caramel frappo-mocha-macchia-latte at the local java shop — with about half the calories.

I’ll even throw in the “Charter” part.  It’s different from a regular annual membership in that your rate will never increase as long as you subscribe to the site.  To sign up, just click on the link below.

SIGN ME UP!

 

 

 

When USDJPY reached the 120.11 price level that marked a Fibonacci 61.8% of its drop from 147 to 75 that began in 1998, we thought it would signal a decline for stocks.  The BoJ, cagey as ever, kept the pair rising slightly — with occasional bursts higher when needed to support the yen carry trade [what’s this?]But, in the end, there had to be some capitulation after reaching a critical Fib level like that.  This past week, it began in earnest — dropping through the red channel bottom that has provided support since November 2014.

This morning, the plunge finally reached the next most significant support: the .500 Fib and the bottom of the rising purple channel from 2011.  USDJPY, along with WTI and SPX, should bottom here.  If stocks are to avoid a meltdown, they must bottom here.  The only question: is it too late?

continued for members…

I thought it would take a couple more weeks for the .500 tag.  But, it looks like they’ve decided to rip the band aid off right here and now.

A similar move for CL, which finally reached our 26.22 target late last night.If there is a concerted effort to create a bounce, look for the initial sell-off to reach our 1810 target and stage a comeback.  If it can’t, then the .886 at 1783 is in the cards.Start out short, but start looking for an entry point there — keeping an eye on CL, USDJPY and NKD for signs of a turn.  You’ll know because all three will be screaming higher.

As far as a bounce target, the initial goal would be to close this morning’s gap back at the channel midline around 1850.32.  Maybe Janet can force some dovish language this morning to help it along.  Beyond that, I’d start looking at  the white .618 at 1901.16.

UPDATE:  9:35 AM

SPX just tagged our target.  I’d go long here with tight stops, as we could see another leg down to test 1800-1810.  The key, as mentioned above, is to watch when USDJPY and CL reverse.  This will be my last trade alert for the day.A reminder: I’m out for the next four sessions on a bit of holiday.  I’ll try to post each morning like this, but it depends on scheduling and internet connections.

Good luck to all!

In our Dec 29 update on XLF, we noted that the rising white channel from Aug 24 and an important TL would be tested were the SMA200 to hold.

Note that XLF just tested its 200-day moving average at the top of the falling red channel within the rising white channel which is, itself, rising within a larger falling white channel.

If it breaks out, then the top of the falling white channel  and/or the rising white channel midline is the next overhead resistance to consider.  If it doesn’t break out, then we should see the rising white channel fall and the yellow TL tested again

Not only did the rising white channel break down, but the yellow neckline failed as well.  Given these bearish developments, we’re left to wonder just how much worse things can get.

continued for members… (more…)

In December’s update [Update on Gold: Dec 14, 2015] we discussed the importance of the dollar on gold’s future price moves.

…the weakness in DX since Dec 3 suggests there’s a decent chance of the Fed punting.  If DX plunges further, GC’s 4th bounce could be a doozy: 1150-1180 for starters, and 1286 after that.

The Fed didn’t punt.  They increased rates by 0.25% as expected, and DX rallied for a whole five days.  After peaking on Dec 21, DX has sold off in fits and starts [see: Update on DX Feb 9, 2016.]  GC spiked, reaching 1150 on Feb 4 and 1180 four days later.Today, it backtested the TL at 1180 and is threatening to break higher.  Does it still have legs?

continued for members…

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Futures were unimpressed with Yellen’s prepared remarks this morning, with ES paring 16 points from its overnight highs.   Still, we would all do well to remember that “markets” can do some awfully strange things on Fed testimony days.  Traders won’t like Janet’s lack of capitulation on rate rises.

But, indices often rise on these days as algos go into overdrive to maintain the illusion that all is well and the FOMC doesn’t, as a matter of policy, ever make mistakes.

Case in point: the focus of yesterday’s post — the Nikkei futures — dipped well below the key TL from 2013, but have since rebounded exactly to the neckline.continued for members… (more…)