The futures are off 8.25 just before the opening. The earlier sell-off reached 2062.25, but bounced off yesterday’s broken TL and channel bottom.

CL has contributed, with a drop to the .500 and 1998 trend line overnight.  It continues the pattern of big drops/ramp jobs overnight to reset the intra-day ramp jobs/drops.

Don’t be surprised if we get an intra-day bounce to the white .382 at 48.63 if this morning’s equity weakness accelerates at all.And, EURUSD’s rising purple channel is a distant memory as the pair fell through and backtested the falling red channel midline.

USDJPY, having enabled SPX to break trend yesterday, ran out of steam at the .618 as expected.  It should hang around current levels — at least until after the month/quarter end today.  Our analog remains in force. For complete details and the forecast through July 2015, see yesterday’s wrap up: New Analog: Part II.  For more on analogs in general, CLICK HERE.

continued for members…

Look for SPX to backtest the yellow TL and SMA50 today at around 2070.  If it pushes lower, I’d ride along — but, with tight stops due to the month/quarter-end bias mandate for a higher close.

Several possibilities exist for the analog.  If USDJPY does sell off and close below its SMA100 tomorrow, SPX should sell off promptly (ceteris paribus.)

The .618 at 2033 looks like a foregone conclusion, with the .786 at 2010.58 a solid runner-up. The SMA200 is currently at 2012, and this is one of the last chances SPX has to tag it within the stricture of a “normal” chart pattern.

If I were looking to roll the dice, the purple .618 at 1933.93 is hands down the best target.  In an unrigged market, it’d be a shoe-in: bottom of the purple channel and a .618 Fib.  I’d buy a boatload of May 198 SPY puts here at 1.25 and let ‘er rip.

But, would TPTB let the “market” correct by a whopping 7% in two weeks without taking extraordinary measures (e.g. Bullard’s Bloomberg interview.)  Hard to imagine.

Re USDJPY, the obvious target is the white .618 at 118.02.

Though, I suspect any reversal below the yellow .618 at 120.11 at this point would start the ball rolling.

I have to step out for a couple of hours, but will check back in later. GLTA.