Friday, USDJPY plunged below the bottom of the rising purple channel it’s been in since Feb 24. Between that and CL’s initial sell-off, it was enough to shave about 20 points off ES’ overnight highs. SPX had been nearing our 1999 target, and it was enough to make us wonder if the tag would be delay a week or more.
But, the “markets” opened, CL quickly rebounded 6.5%, and USDJPY popped right back above the channel bottom, and SPX gained 24 points from its lows. Ah, the delights of algo-driven trading.
It’s a pattern we’ve seen over and over during the past week, and is reminiscent of pretty much all of 2014. So, what does it mean if USDJPY is doing it all over again this morning? Should we take it seriously this time?
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