USDJPY continues to bump along the .236 white channel line — working its way back toward the .618 at 120.11.

The fact that it didn’t snap back has to be viewed as a bearish development.  Though in the light volume and holiday-shortened sessions ahead I wouldn’t try to take that to the bank.  After all, the one constant from this past year has been the ability of TPTB to turn “markets” on a dime.

Follow-through on the downside has been awfully hard to come by.  Having said that, there’s still a decent case to be made for lower stock prices based on chart patterns.

continued for members…

The 10-yr looks like it could be headed back below 2%.

VIX looks likely to tag the 16.75 mark before the 13.09.

Oil probably has a little further to fall, with CL 49.52 our next target.

And, DX is long overdue for a tumble after tagging the yellow .382 over a week ago.

At this point, it’s hard to say what sort of reversal, if any, SPX might see from the above.  The most bullish would be to backtest the white 1.272 at 2073.28.  The SMA10 is currently at 2073.19, so that looks like a fairly safe bet.

If it works its way lower, the broken, red TL connecting the previous tops is now crossing the purple .886 at 2067.28.  A backtest there would make sense, as the previous attempt to backtest it failed (resulting in a 107-pt loss that was quickly erased.)

The diagonal channel lines running through the above chart are pure guesstimates.  The red one looks fairly legit, but it only goes back to mid-2013.  The purple one attempt to connect the 2009 and 2010 lows, and I’ve had a tough time making sense of it on either an arithmetic or log scale.

As for the (more likely) upside target, it remains 2138-2145.  The timing has been greatly complicated by the sideways action of the past week.  But, an intermediate reversal at 2108.55 (purple 1.272) would delay a tag until mid-Jan or later, possibly as late as mid-Feb.  We’ll first need to see how much of a decline comes in the week ahead.

Note: I’m working on a bigger picture forecast for the months and year ahead, and hope to get it posted in the next few days.

GLTA.