Charts I’m Watching: Nov 6, 2014

A link to the webcast of Draghi’s press conference, beginning at 8:30AM EST:

http://www.ecb.europa.eu/press/tvservices/webcast/html/webcast_141106.en.html

As expected, we did have some drama at the .886 Fib, resulting in a pop and drop that was limited to about 6 points by the usual USDJPY/NKD rescue.

2014-11-6 USPX 15 0500

For its part, USDJPY reacted at the 1.618 extension as expected, dipping back to the 1.272 before swinging into rescue mode.  ES (the thin purple line) had dropped about 12 points from its overnight ramp job highs when USDJPY firmed up and boosted stocks.

2014-11-6USDJPY v ES 15 0500NKD initially declined below the important .886 Fib level (in yellow, below.) Stocks did not react well.  So, they took it back above the line, suggesting that the correction was done.

Note, however, that it fell back below the .886 overnight (as usual) — plunging 165 points.  As long as it remains below 17,068, it suggests further downside.  But, because it was propped up north of 16,740, it leaves open the possibility of a rally to the white .786 or .886 (17,322 and 17,396.)

2014-11-06 NKD v ES 15 0500In short, 17,068 is the Japanese line in the sand.

The algos are driving the futures higher with Draghi’s assurances that the (unanimous) ECB is ready and willing to conduct more easing.  GLTA.

 

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