Yesterday’s ECB QE lift-a-thon saw SPX perform pretty much as expected.  SPX reached the midpoint of the target we set Tuesday (2042-2047), then reversed to the bottom of the rising white channel as we detailed in our initial post:

Look for SPX to back off from the SMAs and backtest the broken white channel, possibly around 2030.  TPTB should support it there.

SPX reversed from 2045 to 2026 before the support kicked in, sending it back up through the SMA20 and 50 and through our initial upside target of the day at 2053.

At 2055, we were fine with the idea of taking profits (53 points based on the above calls.)  But, the algos weren’t done.  At 2063, we thought it was probably a good shorting opportunity.

Based on the price action in S&P futures, a drop in oil, and a probable reversal in DX, EURUSD, USDJPY and VIX, we should see at least a partial retrenchment of yesterday’s gains.

Initial support can be found at the white .618 at 2053.29 and the rising white TL off the Oct 15 lows.  After that, the SMA20/50.  And, in the event it pushes lower, a backtest of the falling white channel (the red S.) We’ll update the other charts shortly.

UPDATE:  3:45 PM

Not too shabby….

Tough call going into the weekend.  Even if SPX stops at the rising white channel bottom, it doesn’t mean a continuation of the rise on Monday.

Please note we’ve updated the EURUSD and VIX pages.  The EURUSD in particular holds some interesting implications for the stock market.  VIX tagged our downside target on the nose, bouncing exactly where it needed to in order to get this sell-off in SPX to our downside target.

We’ll update more over the next day or two.  Have a great weekend, everyone!