Please note I’ve updated our results page for March [CLICK HERE.]  As expected, we came in well below January and February’s blow-out numbers, producing a more reasonable 15.11% in our unleveraged, long/short SPX model portfolio.  I’ll publish a full review for March after the close today.

And, this will serve as last call for the $600 rebate offered on already discounted annual memberships.  They’re normally $1,800, but reduced this week to $1,200.  Toss in the $600 rebate in the first year, and you’ll pay only $600 for your first year of full access. The rebate reduces to $500 today, $400 tomorrow, etc.  To sign up, CLICK HERE.

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With Q1 officially in the books as the biggest quarterly rebound to positive in Dow history, the “market” can get back to reality (well, at least as close as it’s going to get.)

We start with CL, which has had seen two spikes up through resistance in the past two days to make SPX’s results possible.  Today, as expected, it falls back into the falling white channel — which is getting Q2 off to a very rocky start.continued for members…

Though CL looks out of control, it has nearly reached its .886  — good support.

USDJPY has also lost support at the red channel midline, but tagged its red .618 and bounced back to the red midline.

SPX should not only reach, but exceed our downside targets from earlier in the week.  Assuming it pushes through the white channel top, it should seek out the SMA10 at 2048 and quite possibly the red .618 at 2043.57.  It depends largely on how strenuously CL and USDJPY rebound.UPDATE:  9:37 AM

That’s probably close enough.  I’d go long here, with the understanding that there’s at least another .50-1.00 potential points to the downside.  ES came up 1.72 short of its .618, so SPX could overshoot its (2042ish.)  And, CL hasn’t quite reached its .886 yet.Note the .707 just below at 2039.  A tag later in the day at that level would make perfect sense.  Beyond that, we have support at 2031 (purple midline) and the SMA20, white .707 Fib and red midline combo — all at 2025.  I don’t expect it to fall apart like that, but am certainly open to it.

My preferred scenario is a close below the white channel top (2052ish) to trap some weak bulls, followed by a big bounce over the weekend to keep last week’s momentum going.  But, my confidence isn’t all that high after 5 weeks of Fantasyland manipulation.

UPDATE:  10:12 AM

SPX almost back to the red channel line and SMA5 20 – made possible by USDJPY’s strong rebound off the .618.  I think we’re very close to the end of this particular wave.  I’ll close the long position and move to cash here. I made a conscious effort last month to reduce the number of intraday calls.  While the total fell by about 30%, I’m going to continue working on it. To me, the ideal would be to earn 1% per day on 2-3 calls, one or two in the first hour and 1-2 in the closing hour.

UPDATE:  11:37 AM

SPX just reached a little TL off Wednesday’s highs that could prove pivotal.  For anyone still long from this morning, this might be a good time to cash out, or at least raise your stops.  If it pops through, it’s probably a good buying opportunity.  But, I don’t see it making a run up to the .886 today. Is it a good short?  ES would suggest so.  But, it’s hard to get excited about shorting on a day with a 21-pt rebound.  I have nothing against it…just use tight stops and you should be fine.  A safer approach would be to short only after a drop through the SMA5 200 at 2063ish.UPDATE:  12:07 PM

USDJPY is pushing back below its midline, presumably to engineer a backtest for SPOX.  This should be a safe short here, with the objective of the red channel line at 2056 or the white channel top at 2052 (ES has good support at 2049.60.) The key to it going any lower will be CL coming down off 37 and testing the .886 at 36.7. UPDATE:  12:43 PM

Second chance at shorting for 2056 on the backtest of the SMAs.  If it pops through, dump the short.UPDATE:  1:16 PM

For anyone who didn’t notice, SPX popped back up through the level specified above.  It’s not back above the TL and SMA5 200.  Just wanted to make sure no one was still holding short!

UPDATE:  1:23 PM

Potential IH&S in SPX, targets 2085ish.  Though IH&S patterns with rising necklines are thought to be less reliable and produce weaker results.  If TPTB wish to accomplish a backtest of sorts, it should back off the neckline.  A push through it is a buying signal that would target 2077 or 2082, for starters.UPDATE:  EOD

I see two comments below and have had several emails regarding today’s rally.  First, I suggest you take a look at a post How to Engineer a Rally.  It discusses the mechanics of what happened today in general terms.  As to the last couple of hours, it can be explained mostly by:

1. CL ramping when it needed to, and USDJPY ramping when it wasn’t
2. USDJPY ramping when it needed to, and CL ramping when it wasn’t
3. VIX reinforcing the general melt-up

There are a lot of moving pieces, but every time they need SPX to squirt up through a line of resistance, moving average, etc. they ramp CL or USDJPY just enough to make it happen.  When SPX is being ramped by one, the other can rest or even decline.

CL lost most of its ground overnight.  When SPX bottomed at this morning’s target, CL was reversing at  (or near) its .886 at 36.7.  It was expected to rebound, so it made it easier to reverse ES/SPX.  A few minutes later, USDJPY started screaming higher.

They tried to engineer a couple of backtests, but by then the algos were in full swing and they’re hard to stop once started.  In the end, those who might feel bearish based on the day’s news were so demoralized they started covering their shorts so they wouldn’t get killed over the weekend.

Bottom line, you can drive ES/SPX higher by actually moving CL/USDJPY higher, or simply with the expectation that they’re about to move higher.  Pay attention to the little TLs I drew in CL and USDJPY, as well as the MAs and Fibs, and I think you’ll see what I mean.

Anyone that needs some one-on-one time to discuss, please sign up for a consultation.  I’m around all weekend.