Charts I'm Watching: Jan 26, 2015

Last Friday’s pre-opening forecast worked out very nicely. I just drew it backwards.

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.)

I thought the initial drop would tag the white TL from mid-October, and the close would be at the .618 at 2053.29. It worked the other way around.

Futures were off 37 points in the wake of the Greek elections, but have recovered virtually all of those losses in the usual overnight USDJPY-driven ramp job.

Another factor weighing on equities: oil. Crude light tested its previous lows late Friday. Though it bounced on OPEC General Secretary El-Badri’s comments, it’s still looking rather wobbly.

As such, I see no reason to adjust Friday morning’s chart/forecast: a test of the SMA20/50 — and a potential IH&S right shoulder if those don’t hold.

UPDATE: 10:40 AM

So far, so good on this morning’s forecast.

For those wondering whether or not the lower target will play out…it’s hard to say. Tell me whether or not USDJPY will break out of its falling channel that goes back to Dec 7.