SPX reached our upside target of 2104.21 yesterday, completing a Bat Pattern at the 88.6% retracement of the drop from 2134 (May 20) to 1867.08 (Aug 24.)

A Bat Pattern produces a reversal at the .886.  And, sure enough, the futures were off about 8 points until 90 minutes ago.  At that point, USDJPY and CL got busy, working to erase as much of the losses as possible prior to the open.

But, can they?

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USDJPY reached the red channel midline again.And, CL reached the SMA100 as well as the neckline (again) of the IH&S Pattern that it doesn’t seem to want to play out.  It might be bouncing now, but the prognosis is still negative.After all that, the futures are still negative.As to SPX, the normal repercussions of a Bat completion would point to at least the .618 or below.  Combining the SMAs and channels, I’ve come up with these initial targets.  If the .618 doesn’t hold, we could be looking at a corrective wave C that backtests the 1.272 Fib at 1823 all over again.

However, since CL and USDJPY manipulation have been running strong lately, we should be cautious around the .786 at 2077.45.

And, if they really want to run roughshod over traders, TPTB will ignore the pattern all-together and force prices up to the 2134 highs.  The past several weeks have proven that it’s still easily done through ratcheting alone [see: Ratcheting Stocks Higher.]

UPDATE:  9:44 AM

Here’s a close up on USDJPY and CL’s efforts so far… UPDATE:  11:38 AM

Well, the algos have won this one.  We should get a new high on SPX momentarily.  Will they be content with a notch higher or will they go for 2134?  Watch your stops.Traders should dump their short positions here, though there’s a good chance it’ll settle back down after the higher high.

UPDATE:  12:05 PM

Hard to pick a target here, as SPX will likely turn soon and backtest 2106.2 (or, even 2104.34) before it gets too far away.  But, given the (tiny) retrace at the small scale .886 at 2105, it’s likely targeting 2111.57 after the backtest.If you’re not already long at 2106, should get another shot at the backtest.  Maybe the 5-min SMA20 (white) as it approaches.

Naturally, I’d be happier playing the downside after this, an algo-fueled ramp job that has no business being where it is.  It’s a testament to the brokenness of the “markets” and the enormous control that the HFT algos possess.

But, seems pretty clear that, having come this far on relative vapor, they’re going to try for 2134.

UPDATE:  12:42 PM

SPX just tagged the SMA20 and 2106.2.  This would be the first logical place for a turnaround if it’s going to make higher highs.The alternative would be the .886 at 2104.21 — the .886 of 2134-1867 that completed a Bat Pattern.  Note that the 5-min SMA50 is there right now.

USDJPY has dipped below the SMA200, so I’d give it at least a 50:50 shot.UPDATE:  1:41 PM

SPX turned at 2106.18 — pretty close — and, just reached the 1.618.  I’d switch back to short with very tight stops.UPDATE:  2:08 PM

I gave it a little leeway because ES hadn’t quite reached its 1.618, but it’s still going strong even after that milestone.  Obviously stopped out on the short position.

UPDATE:  2:37 PM

ES finally reached some resistance — the TL off this morning’s lows.  And, USDJPY and CL are dipping below their 5-min SMAs.  Would hazard a short here at 2115.70 — again, with tight stops.  I’d dump it very quickly, however, if ES can’t dip below the white SMA20 and SPX gets propped up at the red SMA10.

UPDATE:  3:40 PM

With CL silliness apparently over for the day, and USDJPY back below the SMA200, SPX is falling pretty sharply.  We stand a pretty decent chance of getting back to 2104.UPDATE:  3:54 PM

Apparently I spoke too soon.  CL just came back to life, putting the brakes on SPX’s decline.  Touch and go, now.  But, I’d stay short into the close.