ES closed above the bottom of the rising red channel Friday, remaining in the uptrend we forecast.  The next hurdle is approaching, however: the red .618 at 1763.22 which intersects today with the white channel’s .236 line.

So, while the uptrend is intact, the coast is far from clear.  Remember, every channel works until it doesn’t.

UPDATE:  9:35 AM

I’ll consider 1763 close enough and adjust the declining white channel to reflect a reversal there.  We’ll look for a pullback here and subsequent break out through the .618.

The SPX, which followed the e-minis’ lead on the opening, will probably want to back test its broken white channel top — suggesting a pullback to 1761-1762 or so.

UPDATE:  10:03 AM

SPX has reached the white channel top and .500 Fib, so could turn at any point between here and, say, 1761 (later in the day.)  The tell will be the strength of the reaction (if any) at this point.

The dollar, meanwhile, has reached the range we anticipated back on Oct 22 and, is nearing the falling white channel midline as well as the purple .886 (81.111) and white .618’s (81.109 and 81.226.)

While this wouldn’t quite reach the broken red channel bottom, it seems like a pretty good fit for the falling white and (adjusted) yellow channels.  So, I’d consider the dollar rally to be near the end of the spike we’ve anticipated.

This jibes well with the Fib time ratios applied to the USDJPY chart, which indicates tomorrow will likely be the next reversal for the pair as it traces out the last days/weeks of a pennant dating back to February.

UPDATE: 2:50 PM

SPX turned at 1761.56, right in the middle of our target range (1761-1762) from earlier this morning after reversing at our upside target (1767) as expected.

continued for members…

Now that we’re back to the .886 of the drop from 1767.67, don’t be surprised if we get another little pullback.  But, the upside case is very much intact — with a likely pause (or more) at 1770.40 — the .786 of 1775.22 to 1752.70.

This would set up an extension to the 1.272 at SPX 1781.35 — which also happens to be the 1.618 of the larger red pattern (the drop from 1729 on Sep 19 to 1646.)   1781 also looks like the likely target of an IH&S about to complete.

From there, 1823 looks like it could arrive as early as tomorrow morning — the earliest intersection of the rising red channel and the 1.272 Fib.  Needless to say, I don’t think we’ll get a 58-pt rally in the next 24 hours.  And, this all depends on a breakout above 1775 in the next day or two; in other words, that the red channel remains intact.

The red midline, for instance, arrives on Nov 11.  But, we’ll see…