USDJPY continues to back off from its latest trip to the .618 Fib…

…while CL provides the cover. As of this morning, however, the cover is flagging.

Yesterday’s spike to new highs seemed to us overdone and premature.  So, we recommended trying a short position on as a short term trade:

We’d be shorting here at 2118.85, with a target at 2090 and stops at 2125 or so.

We still expect the short to play out, but would keep an eye on CL and USDJPY for any signs of a course correction.

On a related note, EURUSD is getting dangerously close to the red channel top.  It now has a decision to make between resuming its decline or breaking out.

The inflection point is quite telling.

continued for members…

Note that SPX’s highs yesterday exceeded both the Feb 25 and Mar 23 highs — busting all of the downward pointing Fib patterns.  Each of those previous times it did so, it then proceeded to sell off.

In other words, busting the potentially bearish Fib patterns was one specific goal; trapping bulls who jumped on board as soon as the new high was established was another.  They both occurred about this time of the month.

The pattern, should it continue, would suggest a relatively quick drop to firm up a channel — in this case, either the small red channel bottom or the purple channel midline.

 

Just note that in the past, the drop occurred over a Sunday/Monday rather than a Friday — the better to keep traders guessing.

Removing the bearish Fib patterns certainly cleans up the chart a bit:

UPDATE:  3:38 PM

The exchanges are about to close, and nothing much has happened since the last post.  Those with the ability to hedge should hold short positions.  Otherwise, the usual risk of a gap higher on Sunday/Monday makes it dicey — which is exactly how TPTB want it.I have to take off for the rest of the day.  Will try to post more over the weekend.

GLTA!