As is so often the case lately, markets are teetering. Much of today’s action will depend on how the unemployment figures look. They’re due out in an hour (8:30 EDT.) The MSM’s explanation of yesterday’s rally is total and utter BS. As we discussed yesterday:
The PPT is alive and well. Either than or at one nano-second past their release, investors read the 8,200 words in the FOMC minutes and judged them to be bullish for the stock market — ramping ES up 20 points or so to the SMA10 (the 60-min SMA100) in the blink of an eye.
The USDJPY broke down below several important channel bottoms, tagged our next target (101.40-50) and bounced back above — but, for how long? I see 101.13 and then 100.17 on the horizon.
And, ES? It’s in its own little world — enjoying being the world’s reserve carry-trade recipient.And, it might just keep on working…until it doesn’t. If the Nikkei neckline doesn’t hold, it’ll be awfully hard to keep USDJPY afloat. And, if USDJPY tanks, ES/SPX should be close behind.
UPDATE: 2:45 PM
SPX is targeting the neckline at 1837.62, but might tag the .382 at 1836.4 — just below the former low in order to trap more bears playing the H&S.
Note that these lower lows have been accomplished without lower USDJPY — meaning a bounce at the necklines is likely IMHO.
Ditto for ES, which has support at the white .382 at 1828.71 if/when 1830.75 fails. If that doesn’t hold, the SMA100 and channel midline is at 1817ish (1828ish for SPX.)
Those new lows might be the reason USDJPY has been going sideways. It might take some decent firepower to accomplish the final push.