On Friday, SPX successfully spiked back above the neckline of a bearish H&S Pattern, then spent the rest of the day backtesting it. With USDJPY and CL both on the rise this morning, look for SPX to try once again to break out of the topping pattern it’s been in for the past week.

continued for members...

CL has backtested the rising purple channel midline and has very little in the way of overhead resistance until it reaches the SMA200 at 41.19. As for SPX, today will mark the 11th time in the last week or so that it’s pushed past the falling white channel top.  Will this one stick?

Look for it to top and hold the SMA10 (2055.60) in the opening minutes, then work on pushing through the red TL from last Monday.  The exact price will depend on when, but it should be at least 2060.

Since SPX has already reached the red .618, its next upside Fib targets are the red. 786 at 2066.23 and the red .886 at 2070.36.  But, the larger targets remain the white .886 at 2081.55 and yellow .886 at 2097.71.  There are a number of important economic releases expected this week.  And, remember, Friday is OPEX.

ES shows how close stocks are to being able to break out.Zerohedge ran an article over the weekend speculating about the Fed’s Expedited Procedures meeting, to be followed by a meeting between Yellen and President Obama.  I have no idea what’s up, but it obviously has the potential to make a difference to the markets.  Caution is advised, though if it were bad news I doubt there would have been a public announcement.

UPDATE:  9:45 AM

SPX topped the SMA10 and white TL, and is in the process of backtesting them — probably until the SMA5 10 arrives.  USDJPY has backed off a breakout, since it’s not necessary at the moment.CL has topped yesterday’s highs and is closing in on the SMA200.  If it reacts there, maybe that’s when USDJPY will break out.ES is poised at a .886 and ready to pop when it gets the all clear.I’m assuming SPX/ES will breakout in the process of CL reaching its SMA200.  If it retraces at all, then USDJPY will take over, breaking out of its falling white channel.  If they’re clever at all, they should be able to limit SPX’s reaction to a backtest of the broken red TL.

Stay tuned.

Another reminder to members… I will be traveling from Wednesday midday through Sunday evening.  I will try to post early in the morning on Thursday and Friday.  But, there will be no intraday updates.

UPDATE:  10:08 AM

SPX just topped the red TL.   I’d look for it to stall here until the MAs catch up with it.CL is taking a breather,… while USDJPY has backtested its SMA5 200. I have to jump on a conference call for 15-20 minutes, will be back asap.  The red TL would make a good soft stop level, but keep an eye on CL and USDJPY for any signs of softness.

UPDATE:  10:28 AM

Getting stopped out here at the red TL at 2060.  Will probably pick it back up after backtesting the SMA5 10.  But, in the meantime, there’s a decent chance that it drops to the SMA10 when the SMA5 20 arrives (2054.50ish.)All CL really has to do is stay on the rise until the SMA200 at the close.And, again, USDJPY has channel and SMA support.UPDATE:  10:48 AM

Back to long here at the SMA10.  Tight stops are advised, as USDJPY is breaking down and CL has more downside potential and this is very similar to Friday’s price action, which turned a backtest into a gap close that saw lots of gains erased.UPDATE:  10:57 AM

Reverting to cash, as SPX can’t seem to catch a bid……thanks chiefly to USDJPY.If it breaks down, there’s potential support at the SMA5 200 at 2050.50ish and then gap close at 2047.47.

UPDATE:  1:27 PM

Lots of bouncing around today.  I wouldn’t be surprised if we get a repeat of Friday, with a gap close before the EOD. That would be 2047.47.UPDATE:  3:40 PM

SPX turned negative a few minutes ago.  The gap close didn’t hold it; nor did the white TL nor the SMA20.  Downside now seems focused on 2042ish.  Below that, and I’d want to be short — but, not overnight unless you can hedge or watch it closely. Remember, if the neckline breaks and the H&S is confirmed, we have a H&S target of 2011ish, very close to the SMA200 down at 2014.54.If you have the ability to hedge or watch it closely overnight, I ‘d short here with 2028.48 as a very solid target, with 2014, 2010 or 2008.19 as the next lower support.UPDATE: EOD

A couple of interesting charts suggested by today’s action: And, an interview well worth watching with Eisuke Sakakibara, Japan’s former chief currency manipulator:

http://www.bloomberg.com/news/articles/2016-04-11/mr-yen-says-japan-s-currency-may-rise-beyond-100-by-year-end