Yesterday, CL and USDJPY had already edged above technical resistance in the pre-market…

…when Fed president Kocherlakota added fuel to the fire by floating the idea of QE4. It was deft timing, as SPX needed help getting past bearishly aligned moving averages.

It nearly came undone a few hours later, however, when atrocious consumer credit numbers hit the tape.

Only a trading halt prevented a truly ugly close and a slip back below the moving averages.  Funny how often that happens, and so rarely when stocks are rallying sharply…

This morning, USDJPY remains above the falling red channel, CL remains above the white .786 Fib and SPX remains above its 10, 20 and 50-day moving averages.  So, no harm done — yet.

continued for members…

Note that ES continues to climb the underside of the broken purple channel and TL from October.  Aside from the Mar 30-31 incursion, it has yet to impress on the upside.

FOMC minutes will be released at 2PM Eastern today.  And, as usual, the window dressing has already begun.

CL looks intent on reaching 55.78 by tomorrow.  It’s the combination of the white 1.618 and the purple channel top — and would involve another breach of the red channel bottom.

And, USDJPY has bullishly broken out of the well-formed falling red channel — even though it has retreated below the key .618 Fib at 120.11.

One chart I’m watching especially closely today is EURUSD.  It tested the rising purple channel midline again last week, and spent much of yesterday trying to bounce off the purple channel bottom.  Note, however, that it fell back below the falling red .786 line to repeat a backtest that had already occurred.  We discussed yesterday that the .618 at 1.1210 is still a logical upside target, but the passage of time has made reaching it less and less likely.

A break below the purple channel bottom would be bearish for stocks — at least in the short run.

UPDATE:  1:50 PM

Quick update before the minutes come out…

USDJPY:

UPDATE:  3:50 PM

The statement was fairly benign, with something for everyone except the word “patience.”

USDJPY ran for the hills — er, .618 at 120.11.It allowed SPX to remain above the moving averages – bullish if it holds overnight.  But, note the index is back (barely) below the TL from October.  Hmmm…

EURUSD broke below the channel bottom – bearish.

CL broke the rising TL, but stopped at the purple .236 line — inconclusive.DX will either reverse or break out tomorrow.

And, TNX would certainly like to extend lower.  Will it be allowed to?

Even odds that this is a corrective wave that extends to the .789 at 2100 or the .886 at 2107…OR…today’s prop job fails and we get started to 2033 or whatever the downside is.