Charts I’m Watching: Apr 23, 2014

No more QQE.  That’s the upshot of the news out of Japan last night.  According to BOJ’s Kuroda, inflation may already be running a little higher than desired — a fact we noticed a couple of months ago [see: Sayonara Abenomics.]

Screen Shot 2014-04-23 at 6.04.51 AMNeedless to say, USDJPY fell out of bed at the news.  It zipped down and tagged our red channel bottom — the second precision landing in a week.

2014-04-22 USDJPY 60 0528While the red channel bottom held the latest drop, a dip to the white channel bottom would make for a nicer fit.

2014-04-22 USDJPY 15 0532It took ES a while, but it finally got with the program.  Note the small red channel within the rising white channel.

2014-04-22 ES 15 0536ES could continue tracking within the red channel, or it might take the opportunity to expand its horizons with a tag of the white .886 at 1864.80.  A break out of the falling white channel and above the purple .786 at 1873 would likely signal the .886 at 1882.

2014-04-22 ES 15 0536 CUNew home sales come out at 10AM.

UPDATE:  1:15 PM

Another day of very sloppy, misshapen chart patterns.  The guys pulling the strings are so eager to prevent a sell-off that they’re making a pathetic mess of things.  USDJPY hasn’t broken the red channel bottom yet.

The fans on the bottom could count as a continuation pattern targeting 101.85.  It would look better if it were a flag or pennant.  But, honestly, it’s anyone’s guess.  The bears would benefit if the grey channel line were able to stop any further advances.

2014-04-22 USDJPY 15 min 1016Likewise, ES has formed a triangle — a classic sign of indecision — where it makes absolutely no sense to have one.

2014-04-22 ES 5 1028I guess the intent is to keep ES close enough to the .786 (1873) to take a run at the .886 (1882) and the former high in the final hour of trading. The white channel top could serve as the neckline of an IH&S.

But, technically, the broken red channel is just being back-tested — with four attempts to retake it having failed so far.

The time involved in getting to this point has made getting down to the red .886 at 1864 problematic, with the red .786 at 1866 now more likely.  But, even that will take some doing.

Every tick higher on USDJPY gets amplified in ES/SPX.  While, every tick lower is ignored.  The result is a divergence between the two that will be resolved one way or the other.

2014-04-22 ES v USDJPY 15 1047

Comments are closed.