Holding short this morning. The currencies are poised for a reversal, and the overnight ramp job isn’t sticking.
The USDJPY, in particular, appears to be in real trouble.
UPDATE: 9:32 AM
We’re closing in on our original target of 1653-1655. It’s two days later than we originally expected (the red circle) but it represents the purple 1.618, white .886 and the latest H&S target — significant enough that we should get a meaningful bounce.
continued for members…UPDATE: 9:45 AM
Not a lot of conviction on the selling this morning. SPX reached 1656.17 and is drifting higher. With the Michigan consumer sentiment survey coming out shortly, we have to wonder if the bottom is in…
UPDATE: 10:00 AM
Sentiment came in at 80 versus expectations of 85.5 and last month’s 85.1.
Not much follow-through on SPX, but it hasn’t broken out yet, either.
It would be nice to get a tag on DX’s .886 at 81.02… an all-clear sign.
If things do start moving, my favorite target is 1685-1688. It would close the gap from Wednesday morning (1685.15), backtest the latest H&S neckline and potentially tag the top of the current falling red channel. As I currently have it drawn, it could happen Monday morning.
Either way, it should happen soon. A break through 1663.62 is what the bulls need…
UPDATE: 10:57 AM
Coming up on the top of the hour. If 1653-1655 is still a possibility, SPX should reverse with a tag of 1663.62 around 11:00. Best downside target is 1654.
UPDATE: 11:20 AM
Something like this? Looks like 1:06 PM EDT.
DX is ready for a little reversal…
UPDATE: 1:14 PM
SPX has reached our downside target range. My favored turning point is 1654.07, but we’ll see. The H&S target is a tad lower at 1653.20. Any minute now…
I’ll try going long here at 1654.47. Might be a bit early, but that’s okay.
The next lower support is the intersection of channel lines at 1650.60. I’ll take an interim short position on any move through 1653 if necessary. Targets in a few…
UPDATE: 2:00 PM
My forecast is that we’ll get a bounce here at 1654 to 1674-1684, followed by a drop to either 1576 (red circle) or 1553-1555 around Aug 26-27. There could be another bounce on the way down at around 1622 (yellow circle).
This is the same forecast I’ve had in place for a while, and I see no reason to change it. The chart below is a mess, but making it pretty will have to wait.
The dollar is still moving in sync with SPX, but this should change at some point when it become apparent that this is more than a small correction (from 1709 to 1555 is 9%.) For now, it appears DX is backtesting the channel midline yet again.
UPDATE: 2:18 PM
SPX just slipped though 1653. I’ll take an interim short position on any push through 1652, with stops at 1653 for protective purposes only. Core long remains in place.
UPDATE: 3:50 PM
Nice bounce so far, but the rest of it will obviously come on Monday. I’ll hold long over the weekend, primarily because of the TNX. Check out the tag on this .618. I expect a backtest of the channel midline before it runs up and snags the .786 in the coming week or so.
And, I like the look of SPX’s daily RSI chart. This internal channel held as expected — enough for a bounce on Monday at least. I suspect we’ll be testing the red and purple bottoms before long.
And, last, NYA has found channel support…
…at the same time as its daily RSI. It doesn’t look major — probably just a backtest of the white midline. But, along with whatever “news” pops up over the weekend to pacify us Muppets, it should enough for at least a bounce.
GLTA.