Short, my friends.
Though ES climbed back into the purple channel by the end of the day Friday, it has since stayed in line with the falling white channel.
UPDATE: 9:34 AM
We’re getting a bounce here at the former 1687.18 high, so I’ll play the long side with tight stops (1686.75ish.) I don’t necessarily expect a breakout, but it’s the logical play.
The USDJPY has reached the purple channel midline as we discussed and should get a bounce here at 97.62. Though a drop through it would also drop the pair from the white channel, which would target the yellow midline and H&S neckline at below 95.
EURUSD reversed at the white .786 almost where it intersects with a falling channel top. The .886 at 1.3339 looks to be next up unless the purple channel line and narrow acceleration channel fails.
UPDATE: 10:15 AM
SPX just stopped out at 1686.75, back to short with target of 1680-1683 and stops at 1688ish.
Bears are chomping at the bit, and bulls are likely thinking IH&S — the theme behind the bullish scenario on the above chart (last Thursday’s forecast shown in purple.)
UPDATE: 11:20 AM
SPX has reached our initial target area (1680-1683.). The bottom of the red channel is just below at 1678-1679, but an IH&S from here would be well formed. Watch your stops.
UPDATE: 11:30 AM
Should get a bounce here at 1682 — the .618 of 1676 to 1691. Normal bounce should be to the last channel line at 1685ish. But, keep your eyes open for any higher.
continued for members…
UPDATE: 12:38 PM
With the .618 reversal in place, there’s a very good chance that the .786 or .886 will come along and provide a tag on the red channel bottom at 1679.42 or 1677.83 respectively.
I especially like the intersection of the red channel bottom, white channel midilne and purple neckline at 1678. On my chart, it looks like it happens around 1:10 PM EDT.
My only hesitation with that pattern is the possibility that it continues on up and out of the red channel, following the purple forecast line with a bit of a lag. It’s been a very good fit so far.
I’ll take a protective long position on any strength up through 1685, but will otherwise remain full short.
UPDATE: 1:15 PM
Opening that protective long position here at 1685. Stops at 1684ish.
UPDATE: 1:29 PM
Finger on the trigger…
UPDATE: 1:44 PM
Closing out the protective long here at 1684.59. Full short again — looking for 1679.
UPDATE: 1:55 PM
No oomph on the downside, plenty on the ups. Ditching the short position and going full long here at 1685 for 1689, stops at 1685. But, mostly just tired of chasing it back and forth…!
Key levels are the top of the red channel at 1690 and the bottom at 1679.
UPDATE: 3:52 PM
We’re going into the close with no clear direction still. But, SPX is selling off a bit, so I’m cashing out here at 1686.60.
