Happy Friday the 13th, folks. Here’s wishing everyone a blessed day and the very best of luck!
If you took yesterday’s daily forecast to heart, there was good news and bad news. The good news came in the form of our initial post in the members’ section:
Look for the initial spurt to get SPX up to the purple TL. It might well require a second wave to reach 2080, if it’s to happen today.
SPX did, indeed, race right on up to 2080 — in two waves, even. The bad news is that we suggested it might be ripe for a short at 2081.75.
SPX just tagged 2081.75. I’d want to be short at this point, with initial objectives of 2072 and 2068, but I’m a little nervous about USDJPY’s TL. A nice bounce here, even if it fails to clear 120, would be problematic for bears. Perhaps a tight stop — just in case.
USDJPY bounced, of course, meaning those stops came in handy. Between USDJPY and CL — which is still climbing, up 3% on the day so far — the algo action was too strong. SPX dropped only to 2077 before inching higher for the remainder of the day.
USDJPY has recharged, and could easily take over the algo function all by its lonesome — if that’s what the script calls for.
I will be out for the remainder of the day, so I’ll leave you with this observation. It’s a good day to exercise caution. First, the rally from 1982 has been fast and furious and fueled by a rapidly shifting news flow. We’re coming up on a holiday weekend, where big ramp jobs are commonplace — especially when it looked like the market was poised for a drop.
On the other hand, the past two new highs have been followed by large drops. I see no reason in the charts to expect this will be the third, but that will depend on whether CL retreats and/or USDJPY — which is still in retreat mode after tagging that critical .618 at 120.11 — provides its usual ramp.
I’ll be back on Tuesday, but have some very cool long-term charts to post over the weekend.