Charts I’m Watching: Jul 21, 2014

USDJPY continues to consolidate, with a likely 100/200 SMA cross coming up in the next few days.  This would leave the 10, 20, 50 in bearish alignment, all below the SMA 200.  Yet, the chart shows clearly that — even in the absence of increased QQE — the BOJ has zealously guarded the 101 price level.

2014-07-21-USDJPY daily 0530

ES continues to benefit from the daily ramps, while suffering none of the after-hours corrections.

2014-07-21-ES daily 0530

Friday’s ridiculous melt-up came benefit of the algos, with no discernible dips on the way to a 88.6 retrace.  While an IH&S appears a possibility, hardly any of these patterns have played out lately.  The most likely next step is a continuation of the whipsawing that has characterized the past 7 months…

2014-07-21-ES 15 0600

…driving SPX ever higher without any economic or earnings justification, on multiple expansion and Fed backing alone.

2014-07-21-SPX daily 0600


The close was weak, but a manufactured weakness as the obvious target of ES 1972.50 was easily in range…had USDJPY merely gone sideways. Seems like the market makers didn’t want any company on the upside, and forced the ES dip-buying crowd out with a USDJPY/NKD (on 4 whole contracts!) dip and the sudden withdrawal of large limit orders just beneath ES’s trading level.

2014-07-21-ES 5 1322

Gotta say, this is getting really, really old: early morning dip (most of it coming in the after-hours, and not quite reaching the logical target) followed by a melt-up driven by easily manipulated USDJPY/NDX, 10-yr futures, VIX and of course the algos.   The question isn’t “is the market rigged?”, but “is there ever more than a moment when it isn’t rigged?”

2014-07-21-ES 15 1322




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