SPX reacted pretty much as expected on Friday.  From the members’ section in the initial post:

…the odds of SPX gathering enough momentum to reach the red target have dropped dramatically.  Instead, it looks more likely we’ll get a drop to 2093.55, the intersection of the white channel bottom and the former high.

If that fails, the yellow target at 2087.39 is still very legit. But, of course, that would mean a departure from a very carefully constructed channel.  Given that it’s OPEX, that would probably be a head-fake — with the usual V-shaped rally following close behind.

SPX dipped slightly below the yellow target and appeared to be heading toward the red target price, but only reached 2085.44 before constructing a V-shaped rally into the close.

Late in the afternoon, we advocated taking the profits.

…don’t know which Greek news blurb to believe, so I’d go ahead and take profits here at 2107.  Might well be leaving money on the table, but I’d rather pocket the 20-pt profit than risk giving it back later.

SPX’s bounce was built on a bounce by CL and USDJPY and a crack in VIX — all of which occurred.  But, oil’s bounce has been completely undone over the weekend. It plunged to a 48 handle overnight, nearly reaching the purple .618  that could set up even lower prices.

continued for members…

The 3.50 point drop currently showing for the futures should increase to reflect oil’s weakness.  CL has reached potential channel support along with the Fib at .618.  But, if it slips any further, SPX’s SMA10 and purple channel midline look like good downside targets.

A retracement to the .618 sets up a potential move to the .786 or .886 — which in this case would mean 46.67 or 45.01.  Note that 45.01 is also the purple channel midline.

If the .618 holds and the bounce is strong enough, then look for SPX to hold at the broken red channel top (and white channel bottom at 2102 coming up shortly.

The wildcard is USDJPY, which should see another dip before too long to tag the rising red TL where it intersects with the pennant’s upper bound — currently at 118.25ish.

I suspect the pair will eventually revisit the lower bound of the pennant at some point, possibly in the initial knee-jerk response to Yellen’s testimony.  But, for now, I think that higher intersection will probably serve as the next significant target.

A close-up: