SPX has.  ES hasn’t.  If TPTB play their cards right, this morning’s dip will be limited to 5-8 points that puts a well-defined bearish falling channel in the rear view.  If they don’t, then the sharp rally over the past three sessions was all for naught.

For clues, we’ll start with CL.  It went from completing a bearish H&S Pattern on a slew of bad news to a 4.5% rally in the past 18 hours — enough to pop SPX out of that falling channel.  As usual, the rally didn’t end until minutes after SPX had closed for the day.continued for members...

The decline last night was substantial, but the H&S remains busted and prices remain in the upper 1/4 of the rising purple channel.

With USDJPY, which has fallen back inside the rising white channel……it has declined enough to produce a small loss in ES.But, not enough to break the rising channel… If they can hold iti to the top of SPX’s falling white channel, then they’ve managed to backtest a bearish channel and can focus on adding to the rally.  The top of the white channel is currently around 2079.  And, the SMA20 is at 2079.45.  So, we’ll watch that area very closely for a rebound.UPDATE:  9:34 AM

There’s the SMA20 and white channel top.  I’d go long here and see if we get a bounce. Very tight stops are advised.CL and USDJPY don’t really support the bounce here, so watch how they react.

UPDATE:  9:41 AM

USDJPY and CL are posing a problem, as neither has support.  Back to cash. I might take another stab at the white .618 at 2076.60 – also the purple midline – if USDJPY and CL have reached support. UPDATE:  9:47 AM

There’s the midline bounce.  But CL and USDJPY still have no support.  Might be heading down to the red .500 at 2075.25.  Anything lower, and it’ll be more challenging to get it back out of the white channel.CL obviously needs to tag the white TL.  Rip the band-aid off, already, guys.I know it doesn’t look like much, but the purple TL might provide a bounce for USDJPY.  The white midline would be much more constructive.UPDATE:  9:57 AM

CL is bouncing, though USDJPY isn’t quite there.  SPX tagged the SMA5 100, but not quite the .500 Fib at 2075.25.  Hard to feel very confident just yet.   BTW, if 2075.25 doesn’t hold, then the SMA10 at 2068.3 – also the bottom of the purple channel – is our next target. UPDATE:  10:01 AM

SPX is having trouble finding footing here.  And, CL has dipped below the red TL and is testing the purple channel line.  I’d go short and see where USDJPY can stabilize.  Maybe CL will try the yellow neckline?  Tight stops are advised. UPDATE:  10:13 AM

Looks like it might bounce up to tag the falling SMA5 10 that’s approaching the purple midline.  Watch your stops.

UPDATE:  10:21 AM

I think they’re going to try and leapfrog the SMA5 10 with a pop from CL. USDJPY is already back above its SMA5 10. Back to cash here. UPDATE:  10:35 AM

Well, that was interesting.  The EIA just reported a 3.5 MM barrel fall in inventory, the exact opposite of the API’s 3.5MM barrel increase reported yesterday.  Which one is right?  Who cares?  CL is soaring (but to the top of its falling white channel.) And, SPX is back out of the falling white channel.  After all, that’s the whole point.Note, however, that ES still ISN’T.  Shall we try for a backtest again?  The SPX channel top and purple channel midline is at 2078.50ish.  And, of course, the SMA20 is still there at 2079.45.Bottom line, we’re back where we started this morning — but, with the oil inventory situation a total mess and reeking of falsified numbers.

UPDATE:  10:56 AM

With CL busted out of the channel, and ES back above its red channel bottom, we’ll try a long position again.  As before, watch your stops.  The EIA data smells really rotten.

UPDATE:  11:00 AM

ES is breaking down below its channel bottom again.  Back to short.  And, watch CL, which could find support at the white channel top around 45.42.  Target remains the .500 at 2072.43, which should intersect with the purple channel bottom shortly after 12:00.UPDATE:  1:00 PM

Will the little red TL hold, or might we get all the way (sarc) down to the .500? UPDATE:  1:04 PM

I know this is ludicrous, but SPX could very well bounce here at the purple channel bottom.  It would allow SPX to put in two higher lows in a row.  Switching back to long with very tight stops.Watching to see whether CL breaks out…UPDATE:  1:13 PM

What a surprise!

SPX is boxed in by its SMA5 10/20……needs USDJPY to get in the game, too.  Otherwise, 2072 and even the SMA5 200 now at 2070.79 are good possibilities.UPDATE:  2:22 PM

Back to short on the drop through the TL.  Not sure how far it can go, as ES has potential support at 2067.88.  So, might be switching back at SPX at 2072.43 or 2071.USDJPY is being no help at all.UPDATE:  1:29 PM

There’s the .500.  Would not be surprised to get a bounce here, as ES already is.  Back to cash — though it’s just as likely to dip down to the rising SMA5 200 when it crosses the red TL at 2071.15 in the next 5-10 minutes.

This has to be one of the most frustrating days in a while.  Every tick is being very carefully managed.  I’m thinking very hard about quitting while I’m ahead and hanging it up for the day.UPDATE:  2:01 PM

Just got more interesting with the drop through the SMA5 200 and CL dropped back through the previous high.  Unfortunately, the SMA10 is just below, and USDJPY is finally very close to TL support.  And, NKD is at channel midline support.  So, not sure whether it’s worth the effort. BTW, GC has had a nice bounce for the past 36 hours off its SMA20.  It tried to break out this morning, but couldn’t quite make it.  It’s now back to resistance, which might be tough to top unless SPX really breaks down.

UPDATE:  2:52 PM

Crazy day.  USDJPY keeps drifting lower, so I wonder if SPX might be aiming for the yellow H&S neckline at 2062.30ish.  I’ll try a short position here with tight stops.ES just reached its SMA10, but is slipping lower still.  CL is still below its previous high, and USDJPY appears headed for 108.30. Even NKD is breaking down.UPDATE: 4:00 PM

I’ll have to study it some, but today’s action might fit with an analog that I’ve been thinking about all day.  More on that later.  But, I’d hold short if you can keep a close eye on it or hedge it. Obviously, backtesting the neckline is ordinarily a bullish sign.  But, for SPX to be down almost 1% on a day when CL is up over 3% is quite troubling to the bull case.