The craptastic NFP report undid the overnight ramp — for all of two minutes.  The futures bounced strongly and are trying to find some equilibrium.  The USDJPY, back above the red TL for now, continues to drive equity prices.  Very reminiscent of the taper pop — with the PPT’s hand clearly caught in frame…

Even the talking heads can’t explain the melt-up — just like back on Dec 18 — because the honest explanation would be bad for business: the market’s going up because TPTB need it to go up in the face of really bad news.  They are buying everything in sight in order to ramp it right on through into the close and, ideally, scare the bears into capitulation.

continued for members…

UPDATE:  3:20 PM

ES seems intent on reaching the .618 retrace of the whole shebang.  It should mark the extent of the bounce back, as USDJPY and EURUSD have both refused to participate in this nonsense — remaining below their original spike higher from earlier in the day.

But, there’s a problem: the tag should happen late Sunday night (assuming it doesn’t happen today.)  What else is new?

My gut feeling is that this is a trap for the cash buyers who are — by now — all getting calls from their brokers to buy before it’s too late..  SPX RSI is backtesting a channel bottom and a channel midline.  I sure wouldn’t go into the weekend long.

A 50% retrace is perfectly acceptable given the downside potential of this move.  I still like the idea of the SMA 200 around 1696, and think the USDJPY is itching to get back under the red TL — having just backtested a well-formed channel midline.

While 14 more points upside might await those willing to continue rolling the dice on ES, I’d be more focused on the next 100 points of potential downside.