We all knew it was happening — in reality if not in name. Today, it came one important step closer to being official.
Shortly after Japan issued JGBs, the BoJ scooped in and bought them (¥400 billion worth) — bringing their ownership close to 50% of all outstanding 10Ys. In other words, the BoJ is now that much closer to officially financing Japan’s staggering deficits. Normalizing, indeed.
The effect on the USDJPY wasn’t all that significant. It was more the realization that the BoJ has had to resort to extreme measures — something Kuroda swore he’d never do — lest they totally lose control.
Together with the BoE hiking by 0.25%, it was more than the algos could bear. Futures are off 14 points and have completed the H&S Pattern we’ve been watching develop.
As oil and gas continue tumbling toward our downside targets, there should be more downside for stocks ahead.
continued for members…
CL and RB continue sliding toward our downside targets…
…while VIX has a very good chance of breaking out (I’ve simplified the chart to make the new falling white channel easier to see.)
If it does, SPX and ES should go on to tag their H&S targets. Note that ES has completed its, and should backtest it shortly. 
SPX’s is right at 2800, so we’ll call that the line in the sand.
My computer froze up 10 minutes before the open, so I’m running a little late today. When it rebooted, it rearranged my six monitors — which is driving me nuts. It’s the second time it has happened this week and is apparently a known issue with Mac’s latest OS (a side benefit of Apple becoming the iPhone Company.)
I’m going to shut down and rearrange the cables to prevent it from happening again. I’ll be back in 20 minutes or so.
UPDATE: 3:15 PM
Well, that was a delightful way to spend 5 hours. While I’m waiting on my next call from Apple, here’s an update. TPTB freaked over the idea of completing our little H&S Pattern and pulled out all the stops.
RB put in a big reversal, but not a breakout.
VIX is dumping big time. 
USDJPY is making a small recovery. 
DXY is popping nicely. 
This left SPX with a pretty nice bounce, though not a breakout. 
FB is even back above the neckline.
And, the most ridiculous move I’ve seen in a while…