There’s a tussle going on in CL at the moment — whether or not to respect the .618 retracement of the rise from the March lows.  This is the next major support following the breakdown of the rising white channel.

How it plays out will have significant impact on stocks over the next week.  Needless to say, it needs to go much lower if yen bashing is going to accelerate.  If the failure of yesterday’s falling wedge breakout attempt is any indication, it will — with 44.71 and 42.41 the only support standing between it and new lows.But, the most important chart remains the USDJPY which — as forecast — is now back below the red channel midline. The 4 sessions it spent above the red midline are a good indicator of just how difficult it is to manipulate every zig and zag of the “markets.”  Fortunately, it all fits in nicely with our current analog, the last few charts of which will be posted below.

continued for members…First, a quick fine tuning of the multiple potential downside targets.  With all the moving averages below current prices, SPX has lots of choices.  I remain partial to 2044 for July 29 and 2015 for Aug 13.  But, there are plenty of other scenarios to consider.The key is where SPX is when USDJPY reaches its SMA200 and, more importantly, where it is when the BOJ announces more QQE.  FWIW, their next monetary policy meeting is Aug 6-7, with minutes from the July meeting due out Aug 12.

As to today, my best guess is a rather broad range of 2100-2107, with an week-end target of 2077-2088.  But, there’s a lot of selling pressure out there from yesterday’s earnings news.

Note: USDJPY’s SMA200 appears zeroed in on the Aug 13 timeframe…

…while EURUSD should reach the next downside target in the next few sessions.  I have to admit I like the idea of the Flag Pattern breaking down and the next major Fib target at .9934 coming into play.

Analog charts coming up.