Charts I’m Watching: Nov 13, 2014

More overnight ramping on USDJPY and NKD, but softness in the past few hours.  As we expected, NKD held the yellow .886 and is treating it as a backtest.2014-11-13 NKD 60 0610 2014-11-13 USDJPY 0610USDJPY is nearing two key Fib levels: the purple .886 at 118.59 and the white .618 at 120.11. 2014-11-13-USDJPY daily 0730ES and SPX each completed a small IH&S indicating further gains.  While, the best choice for any significant pullback remains the former highs.

2014-11-13 ES 60 0610SPX shows the dashed red TL that has connected all recent highs could be an impediment to the IH&S playing out in the immediate future.  The solution?  New highs in USDJPY and NKD courtesy of the scuttled Japanese tax hike being heavily rumored.

2014-11-13 SPX 0645A better look at the TL:

2014-11-13 SPX TL 0645UPDATE:  10:25 AM

IH&S almost complete, getting big boosts from VIX, NKD and USDJPY.  Note: for many months now, SPX has frequently stopped just short of pattern objectives, leaving an argument for further upside on the following day.  As always, keep an eye on the real drivers of this market: USDJPY and NKD.

Because, in those instances when SPX doesn’t stop short, USDJPY/NKD are usually smashed higher in an effort to leapfrog natural points of resistance (e.g. Oct 31.)

2014-11-13 SPX 5 0730

UPDATE:  1:05 PM

The IH&S stopped short as we suspected it would. Now, we’re seeing the reversal, that should complete a traditional H&S that points to the SMA10.

2014-11-13 SPX 5 1015

UPDATE:  2:00

SPX got most of the way there.  We should see another leg down to either today’s SMA10 (2028.25) or yesterday’s (2024.25.)  A reminder: the previous high we’ve been targeting is at 2019.26.  It would make for a good intraday overshoot.

2014-11-13 SPX 5 1100UPDATE:  3:20 PM

USDJPY to the rescue.  Note that USDJPY (thin purple line) reversed off a TL (the red arrow) at the same time SPX was vacillating between continuing to fall within or breaking out of the narrow red channel.  VIX was monkey-hammered at the same time, and that was that.

2014-11-13 SPX 5 1222

SPX is back above the neckline, where it is likely to close unless VIX can get a good bounce off 13.80 (top of falling white channel.)  ES VWAP is at 2036.75, so we’re likely to finish there unless there’s a power outage in algo-land.

Update EOD:

ES closed @ 2036.50.  Nice job, guys.  Thank goodness the market isn’t rigged.

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