Friday saw a repeat of the SMA10 test, but this time SPX closed slightly below that support.

The futures are holding their cards close to the vest this morning, with ES off about 1 point.  USDJPY is going mostly sideways…

…while CL — off 1.5% — continues to hint at a retreat to the .786 or .886.

We’re examined the timing of breaching important resistance many times over the years.  If the past is any indication, SPX isn’t quite ready to make its next major move.

continued for members…The easiest point for TPTB to push past major resistance is during a low-volume session such as the Christmas holidays, 4th of July, etc.

Volume has fallen off a cliff in the past year, so getting SPX beyond 2138 might not require that sort of trickery.

But, the algos seem to be keyed in to a predatory mode these days, taking advantage of those who trade according to obvious Fib lines, new highs, new lows, etc.

This, of course, reinforces the idea of multiple head fakes along the way.  The Easter holidays are a good month away (April 3.) As such, I think it’s likely we’ll see some sideways action for a while before the storming of the gates.

The key will continue to be USDJPY (of course) and CL – which, as mentioned before, really ought to test the .786 or .886 before trying for higher.

l’m looking for SPX to move lower before moving higher, with the likely target being a test of the SMA20  — if CL continues to slide.  If the prop job continues, then the downside will be limited while the moving averages continue to rise.  And, the bears will continue to suffer death by a thousand cuts.

I’m watching this little potential H&S setting up.  If the neckline holds, it’ll provide a good indication of what they have in mind.  Likewise, if the upper TL is broken…

In checking the e-minis, a couple of different scenarios make sense.  First, the yellow 1.618 hasn’t been properly backtested.  Although technically sufficient, the intra-day move on the 20th wasn’t that convincing. Another one to coincide with the SMA20 reaching 2085 would play well.

If that fails, then the rising purple channel midline would present a nice target.  The SMA100 will be there soon enough, and that would provide powerful support for a big move higher.  Depending on when it occurred, the “market” wouldn’t have to give up much in way of gains.

The flip side of that whole argument is that bears have been pretty much annihilated.  Each passing day, another chart pattern or Fib-oriented trader is blown out of the water.  Those remaining are less and less willing to take a stand unless there’s a crowd going along with them.

And, much of the negative economic news that might start a panic can be “managed” by TPTB and/or taken as the impetus for more central bank easing (the “bad news is good news” meme.)

We’ll see…

UPDATE:  10:05 AM

Just a quick update on CL — which explains in a glance how they turned a close below the SMA10 into a 5-pt gain in SPX.  It’s becoming nearly as effective as USDJPY in triggering the algos.

With that move, SPX was able to break through its resistance.  We’ll watch to see whether it holds or is a head fake.The more important tell at this point is USDJPY, which is again approaching that critical .618 at 120.11…

…as DX is approaching the .500 Fib we’ve discussed.USDJPY’s .618 Fib is as good a line in the sand as any, but members should know by now that it is totally and completely managed.  So, the potential for a false breakout is substantial — as the 4-hr chart below shows.

We’ve had 4 such headfakes before, and each has ratcheted SPX higher.  The rising purple channel has been carefully assembled, and the presumption should be that the white .886 will eventually be tagged.

GLTA.