SPX completed its Bat Pattern last Thursday, but has loitered in the no-man’s land between the .886 and the 2134 high while waiting for the eminis to catch up.  Why the big stall?

As we noted yesterday, a changing of the algo guard was required.  With CL finally reaching our 50.11 target overnight, it can proceed.

continued for members…

USDJPY had overshot the red channel midline, which made for an uncomfortable stance on our SPX forecast — particularly the timing of its assault on 2138.  If CL bounces much, USDJPY should have plenty of room to decline without SPX having to give up all its gains.  As we noted yesterday:

CL’s rising white channel has officially died. Though, given the fact that it’s loitering just above the .618 at 50.11, I wouldn’t write off a Lazurus-like recovery just yet.  A strong bounce would be an effective tool to drive stocks higher or, at least, prevent a drop [while USDJPY resets.]

Our downside targets of remain in force.  From yesterday:

Initial support is at the .886 at 2124.37, followed by the purple channel top at 2119 and SMA50 now at 2102.

Note that EURUSD is backtesting its .618 today…

…which, along with the yen’s strength, should allow DX to at least take a breather at the white channel .786 line and red .618 Fib.

One of the more pressing questions at hand is whether CL can make much headway or whether it might be limited to a backtest of the obviously broken rising white channel (currently 53ish.)  If the BOJ is about to reveal a significant expansion of QQE, CL will need to decline much more (44.71?) in order to compensate. That’s the deal TPTB have in place in order to protect the carry trade.  Stay tuned on that one…

Meanwhile, we’ll continue our look at the previous analog events in the hopes of developing a more precise understanding of the script going forward.  These charts take quite a while to develop, so thanks in advance for your patience.