Breakout or Fakeout?

There are 3 important charts to consider, today:

DX has reached the top of its falling channel.2015-10-23 DX daily 0530USDJPY is testing its 200-day moving average at the top of its new, expanded triangle.2015-10-23 USDJPY daily 0530And, ES just tagged the .786 Fib, the bottom of the broken purple channel, and the .236 line of the rising white channel from 2009.   2015-10-23 ES daily 0610For now, at least, it has broken out of the falling white channel.  The trick will be remaining above it and maintaining momentum.

Given the stakes, it’s not hard to see why the world’s central banks are united in their efforts to direct our attention from disappointing revenues, overleveraged states and the fact that the “market’s” performance has been mostly driven by currency manipulation (the yen carry trade) and direct intervention in equities.

We looked yesterday at how it works [see: What Really Drives Stock Prices.] The question today is “will it work?”

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