Yet another day of nonsensical SPX propping yesterday.  Five sessions after SPX completed a Bat Pattern at the .886 Fib retracement of the drop from 2134 to 1867, it finally managed to tag the .786 Fib.  Two days later, it can’t even manage another few points to backtest the SMA200.

USDJPY remains elevated, jealously guarding the points it gained in last Friday’s post-NFP sprint.  While it is cautiously returning to earth, it’s doing so after hours, when ES is easily propped up.

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Likewise for CL, which has clearly broken the red TL off August’s lows, but somehow manages to elevate back to it from 9:30 to 4:00 every day.The futures show a 4.5-pt gain, based solely on USDJPY’s rally after dropping to the white channel midline overnight.

But, I suspect this gain won’t last.  We should get the SMA200 before long.  And, as before, if it doesn’t hold, then the SMA100 at 2036 (.618 Fib at 2032) remains our secondary downside target.UPDATE:  9:33 AM

SPX just backtested the neckline of the little H&S Pattern it completed on Monday.  for anyone that didn’t hold short overnight, I’d short here at 2086.21.  Note the clear megaphone pattern.Here’s a little better look at the dynamics at play.  The only thing missing is a clearly defined falling channel to guide prices to the SMA200 at 2063.59.UPDATE:  12:37 PM

Backtesting the neckline again, and threatening to break out of the megaphone.  Or, maybe it’s just a sneaky stop running exercise (SPX just topped – barely – this morning’s high.)  I’d cut loose the short on any sustained push through the neckline. Otherwise, this is just an uncomfortable test. USDJPY has provided all the firepower, but is bumping up against the midline of the falling white channel.  VIX suggests it’s a test — but, also illustrates the precariousness of the situation.  Having broken out of and backtested the purple flag, it needs to hold the rising red channel in order to support a lower SPX.A close-up:And a broader view of SPX:UPDATE:  2:05 PM

It appears SPX is going to test 2077.45, the 5-min SMA200 and the white .786 and the location of a TL off yesterday’s lows.  If it can break though, milk and honey for the bears.  Otherwise, don’t be surprised if it bounces back to or above the megaphone top into the close.CL is off a whopping 3.5% now… …but, USDJPY is finding support at the rising white channel midline.  So, CL’s travails haven’t much mattered.UPDATE:  3:06 PM

ES just tagged the red TL from Monday, so there’s a decent possibility that SPX will reverse here.We have a pretty good gain on the day, so I’d be tempted to stay short a little longer to see what develops — especially if USDJPY dips below the white midline. UPDATE:  3:52 PM

And, here’s that point in the day where I tell you that it’s probably going lower tomorrow, but only hold short if you can hedge or closely monitor it overnight.  Then, weight the potential 13-pt gain against whatever bounce it might get on the opening a la this morning.It would be nice if it would just dive to 2063 in the last two minutes.  I’d be content to take profits and not worry about it overnight.  But, that’s probably not in the cards…

FWIW, USDJPY is hanging out below support. But, that could change in a heartbeat.The fact that SPX is closing at a low is a good sign for bears (as opposed to the last two sessions.)  But, it could also be a nice little head fake.  Be cautious.