A lower than expected inflation print this morning sent notes higher and USDJPY lower. Within a minute, however, the PPT had swept in and fixed things. 
The eminis are showing off 8.50, meaning yesterday’s downside target should be tagged in the opening minutes.
continued for members…
I’ve actually lowered it a bit to make more sense of the proposed white channel [when wedges break down, they often morph into channels.] We might expect the rising wedge to be busted…
…but, note ES’s stop at the bottom of the white channel line. It’ll need to break down in order to get any real action on the downside.
If it doesn’t hold, look for SPX to reach the purple TL today instead of next week.
UPDATE: 9:34 AM
A purple TL tag is looking pretty good. Note the presence, also, of the yellow neckline from the completed H&S Pattern from two weeks ago.
I’ll probably go ahead and take profits from our short at 2081-82 — even if it is a couple of points early. It’s a long, long TL and it’s pretty easy to be off by a point or two.
Note, also, CL’s threat to break down through the white channel bottom.
For those who want to fine tune it a little better, the SMA200 is down at 2077.94. With any luck, we’ll tag it today — either on this push or the next.
UPDATE: 9:44 AM
I think we will get that SMA200 tag. The bears want it for sure; and, even the bulls want it in order to show a bounce off of support.
Note that ES is sneaking up on that yellow TL that provided the last three stops.
As always, watch CL and USDJPY for signs of a stick saving spurt higher.
UPDATE: 9:55 AM
2078.79 might be close enough…
…but, USDJPY and CL are both backing off — perhaps intending to tag the SMA itself or even the white channel bottom at 2072.44.
At this point, it’s algo v algo. It quite often happens that technical targets are almost, but not quite, reached in order to leave room for the spoofers to collect an extra pound or two of flesh.
UPDATE: 10:44 AM
SPX just tagged the SMA200 itself. 
Note that CL has dropped below yesterday’s early morning lows and appears headed for our 40.57 target. If it continues dropping past 41.42, it should enable SPX to reach the 2072.44 level. 
USDJPY is even helping out.
The SMA200 now becomes resistance and would be a good place to consider a protective stop on the short.
The purple target at 2072.44 marks the red .382 Fib and the red .786 channel line. And, of course, it fleshes out the white channel perfectly. But, suppose the Fed minutes coming out in a few hours are bearish (e.g. indicating a sooner rate rise than expected.) What then?
Remember the big red target down at 2044 which would complete the large H&S Pattern? We missed it by 8 points last Wednesday. 
It would still make a really nifty scare tactic to get USDJPY moving — maybe even a Fed president speech or two. Just thinking out loud…
UPDATE: 11:28 AM
TNX and USDJPY have also reached support. 
CL is still diving, meaning it’ll probably get to the 40.57 level today before the big bounce.
UPDATE: 12:44 PM
It did (40.60 versus 40.57.) I’ll post an update to oil in a few moments. In the meantime, SPX has returned to the SMA200. We should see a reaction here, but it will probably bounce around for the next hour until the minutes come out.
UPDATE: 2:00 PM
UPDATE: 2:13 PM
Note that ES has also reached nice resistance at the dotted TL from the top and the rising white channel midline.
UPDATE: 2:30 PM
UPDATE: 3:09 PM
That was quite a bounce, and quite a reversal. A close at 2081.43 or so leaves SPX above the purple TL — a net positive. The fact that SPX and ES both reversed at their respective .618s indicates another leg down — usually either the .786 or .886. 
SPX suggests the .886, while ES the .786. Again, too much up in the air here, I’d leave neither a long or short in place overnight. 
USDJPY not bouncing at all. Leaves me to wonder if 2044 isn’t finally in the cards…? The purple dot, you’ll remember, is the SMA50.
As I pointed out earlier in the week, the purple .618 and SMA100 intersect late tomorrow, and the .886 and SMA200 intersect at the end of the month.
FWIW, TNX certainly suggests more downside, and it tends to lie less than some of the other indicators. My gut tells me it’s right this time, too.
I have to duck out for a while, will try to post more later.
GLTA.