Charts I’m Watching: Apr 4, 2014

Lots of action in the USDJPY in response to the employment report.  This is a 1-minute chart:

2014-04-02-USDJPY 1min 0541DX initially dropped from 80.73 to 80.55, only to be bid aggressively (thanks, Haruhiko!)

2014-04-02-DX 1-min

I continue to expect it to benefit from a falling euro but get dinged by a rising yen — in other words, more see-sawing between 80-84.

2014-04-02-DX weekly 0624 I expect the BOJ won’t take any additional easing measures in the their first April meeting next week, even though the damage from the increased sales tax will have already begun.  This should rattle a few carry-traders.

The daily chart shows the five day spurt sputtering yesterday, having difficulty topping the TL from 1999 that it first backtested on Mar 7 [but, popped above following Yellen’s testimony on Dec 18; like the 10-yr, it’s looking like a ramp job that lost its footing.]

2014-04-02-USDJPY daily 0550The BOJ has their hands full.  Unlike the Fed, which bristles at the suggestion that it’s propping up equity markets, buying equities outright is part of the BOJ’s master plan.  They arm-wrestled the Nikkei back into the broken channel from 2011, but just ran into the falling purple channel top and the .886 Fib (white.)

No help from the Fed today, as it’s one of only 4 days without POMO (also April 17, 18, 30) left in the month.  But, the ramp is already in.   SPX will be looking to bag 1900 today.

Lest anyone look at this as a “healthy” market, the trend of all the market’s gains coming in the after hours continues [see: Are Bears Doomed?]  In the past week, 62 points of the e-minis 48-pt net gain have come overnight.

2014-04-02-ES 30 min rampsUPDATE:  10:34 AM

If this channel breaks on USDJPY…

2014-04-02-USDJPY 15 0730…the daily RSI suggests at least another leg down.

2014-04-02-USDJPY daily RSIBut, as we discussed yesterday, a lot of damage has already been done to the bears’ case.  Remember that well-formed H&S Pattern?  Toast.

2014-04-02-SPX 60 min 0741UPDATE:  2:35 PM

Getting close to a good bounce spot here at 1856-1858.

2014-04-02-ES 5 min 1135UPDATE:  2:50 PM

Logical place for a bounce here at the purple .618…

2014-04-02-ES 5 min 1150…especially since USDJPY just tagged a .382.  It’ll be interesting to see whether or not USDJPY tries to retake that channel.

2014-04-02-USJPY 15 1155If the Fib levels don’t hold, the white channel midline on ES is around 1850ish.

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