Another VIX beat-down in the final seconds of trading yesterday, interestingly right to a .786 retrace.

USDJPY corrected overnight, testing the SMA100 yet again.

And the little channel on NKD broke down, yielding a whopping 4-point decline in ES.  The red channel is a regression channel.  If it doesn’t hold, the .618 is just below at 14836.

ES is bumping along a gently sloping TL/neckline.  The SMA10 is down around 1931, but that would mean a departure from the acceleration channel and actual downside. It is back below the white 1.618, but lately these declines have a shelf life of around 15 minutes.  We’ll see…

SPX/ES topped their 1.618s at the close Friday…

… thanks to an increasingly common vicious VIX bang in the final minutes of trading.  Zerohedge put out an interesting commentary tying it to Citadel and the Fed.  Don’t have any details on this, but where there’s smoke…

Perhaps it’s just coincidence, but murdering the VIX like this got SPX barely back over its 1.618 (1948.52) in the last 30 seconds of trading on Friday.  A close north of an important Fib level damages the harmonic pattern and, in this case, also negated a tiny H&S pattern that pointed a whopping 3 points lower.

Bottom line, folks, it’s an all-out assault on any bearish pattern that pops up.  St Louis Fed President Bullard was quoted this morning as saying that the Fed “shouldn’t be intervening all the time” in the markets.

A careful reading of the remark would indicate that even he believes it should be intervening some of the time.  As in Japan — where the BOJ is directly purchasing equities with freshly printed yen — intervention at any time renders the market no longer a market, but a scripted outcome.

The Nikkei reached the .886 we were watching – several times.  Keep an eye on the little white channel, as a breakout or breakdown will likely determine the next major moves for US stocks.  Sure it’s ridiculous, but it’s been working.

A lot of chop this morning in the futures following the jobs report.  In addition to USDJPY — which is mired in between all its daily moving averages,  keep an eye on SPX’s acceleration channel.

UPDATE:  11:20 AM

FWIW, SPX just tagged the purple 1.618 set up by the drop from 1897 to 1814 in early April.  In an unrigged market, not run by algos, I’d say this is a good spot for a reversal to at least the yellow 1.618 at 1918.36.  In a more normal market, maybe even the purple .786/yellow 1.272 at 1879.  In a market reflecting the real economic state of affairs, interest rates, earnings, etc. — more like 1800 or lower.

Enough “what-ifs.”  The bears will be lucky to get a gap fill at 1940.66.

SPX has broken through the previous highs and appears headed for the purple 1.618 at 1848.52.  On the other hand, it just reached the TL connecting May 2, 2011 and Dec 31, 2013 again.

Watch how the bell cows of NKD and USDJPY behave at this juncture.  USDJPY, in particular, has had trouble breaking out — even after successfully backtesting its SMA100 again.  Probably just needs to consolidate a bit.

The e-minis have reached a minor 1.272 in what has been essentially a straight shot higher.

Another day, another snap-back rally to test the top.  This one reversed exactly at yesterday’s lows (probably just a coincidence.)  SPX’s Crab Pattern target of 1926.77 is still out there, so be careful of any new highs here on SPX/ES.

USDJPY may have topped out for now, but the white .618 is still a possibility — and, a likely ally in any push higher in the “market.”

We should see more of this chop until Draghi’s big announcement tomorrow.  What will the ECB do?  Smarter guys than me are certain it’ll be negative interest rates.  I happen to believe more LTRO s and an expansion of relieving the “dead banks walking” of more of their crappy paper/derivatives.  Whatever the announcement, the “market” will probably sell off viciously for all of 30 seconds before rallying to new highs.  Sigh…

I have more Comcast issues, so will sign off now.  GLTA.

UPDATE:  11:15 AM

Quick update…ES and SPX just made new highs, so all those pretty harmonic patterns showing potential downside targets are garbage. Remember the SPX 1926.77 target, though.  If SPX should reach it during trading hours, we could see a decent sell-off.

The way the algos have been working lately, however, is to push to a new high (to stop out the shorts, if there are any still alive) and then linger there near an obvious harmonic or chart pattern reversal point to keep the newly minted bulls in the game until the rug can be pulled out from under them — preferably in the after-hours.

If the talking heads on the boob tube really wanted to discuss where all the traders went (why this is the most-hated bull market in history) they’d spend a day or two talking about algorithmic trading.  It is undermining the integrity of the “market” just as surely as is the Fed and is slightly more important than driverless cars or the latest funny-money acquisition.

Watching the USDJPY this morning, as it tries to decide whether to push through the SMA100.  A reaction off the channel line and .500 Fib would make sense.

The direction should determine whether stocks continue their run or not.

The Nikkei had a big day yesterday, breaking out of the triangle it’s been in since the beginning of the year as well as the SMA200.  Now, it’s bumping up against some potentially important Fibs.  Backtest of the SMA200 at 14811 or the triangle itself?

Harmonics haven’t been terribly effective lately, but there is a potential Gartley Pattern at work in ES.  If it’s to play out, we could see a backtest of the broken white midline first.

GLTA.

Nothing new from last week, which includes the “market” completely ignoring this morning’s ugly economic news and PMI data that seems rather obviously managed.

TPTB ramped SPX up over important Fib levels in last week’s holiday low volume, but are having a bit of trouble defending the new highs. USDJPY (and a quick phone call to ISM) to the rescue.

But, it’s not rigged…

Today should be a carbon copy of yesterday: ignoring dismal economic news, ignoring the 10-yr note warning signs, ramping on USDJPY/NKD, BTFATH, etc.  Chart Patterns, Elliott Wave, technical analysis do not apply on the last day of the month which, for PR purposes, has been green for the past three months.

Unless a true black swan event pops up, look for new highs above the Crab Pattern 1.618 Fib of SPX 1918.36.  A logical target would be the smaller, red 1.618 (1926.77.)

The bigger picture:

Come Monday, it could be completely different story.  But, I can’t imagine TPTB yielding the larger scale 1.618 that they spent so heavily to achieve.

UPDATE:  1:25 PM

What happened to the nice little rally we had going?  Loretta Mester is the incoming president of the Cleveland Fed — and a voting member.  At a conference on inflation the Cleveland Fed is sponsoring, she made comments about the risk of inflation (right, not deflation as we hear over and over.)  This brands her as a potential hawk, and opens a window on the changing dynamic in the FOMC’s thinking.

10-yr yields broke a rising trend line — though they were quickly neutralized by TPTB.  SPX and ES retraced .886 of the rise from this morning. USDJPY fell back below the SMA20. And, SPX is back to that 1.618 and trying to rebuild some momentum.

As I was typing this, John Wiilliams (SF Fed) was on CNBC talking about the possibility of overshooting 2% inflation.  The “market” isnt’ so happy about all this crazy talk!

I’m having intermittent technical issues today, so will not be posting intra-day.  The daily charts tell the story: a 1.618 Fib line just overhead at SPX 1920.63 and ES 1910.50.  The only issue…the markets have routinely ignored harmonics when it comes to limiting rallies (while choosing the most bullish Fibs to limit declines.) Note the veritable absence of Points B & C in the proposed Crab Pattern (in yellow.)  Today is the biggest POMO day of the month, and the end of the month is tomorrow (photo opp.)  So, don’t put too much stock in technical analysis, chart patterns, the contracting economy or crappy earnings.  Revel in the fact that Apple is paying $3 billion for some headphones.  In other words, trade safe and pay attention to what price action is telling you — no matter how contrived (yes, rigged) it obviously is.