Since DX reached our .886 target on Nov 21, stocks have been stuck, grinding out small daily gains.

SPX has come close to, but hasn’t yet reached, the 1.272 extension we’ve been watching.  Futures are currently up 3-4 points, meaning SPX has a shot at the Fib level on the opening.

The big question, of course, is whether or not it will matter.  SPX has paid very little attention to the Fib levels on the way up from 1820.  When there was any reaction at all, it never once even retraced to the next lower level.

USDJPY remains subdued, having reached our .886 Fib target, but with the possibility of another advance to the white .618 at 120.

This move, if it occurs, is likely being held in reserve for when it’s really needed — such as SPX pushing above a key Fib level.

More on this coming up later as we continue our look at the possibilities for the remainder of the year.

UPDATE:  11:25 AM

Mission accomplished on the 1.272 tag.  SPX reached 2074.21 before reversing, down about 9 1/2 points at present.  In an unrigged market, we might normally expect a reversal to the .786 or .886 after a Butterfly Pattern completes.

But, as we’ve discussed, there was no .786 reversal, so this isn’t technically a Butterfly.  And, this market is about as unrigged as a primary in North Korea.  Note the white arrows, each of which signifies a gap up on the open.

Instead, keep an eye on USDJPY and VIX, which have done all the heavy lifting and should continue to provide clues as to when a little more air will be let out.