Yesterday started off well, with great calls early on (off a downside target of 2132.91, we went long at 2132.66 and took profits at 2145.65; the top was 2145.73.) The rest of the day was an aimless mess, as traders couldn’t make up their minds whether oil’s collapse or the barrage of bad DB news was more important than USDJPY’s incessant rise.

Today, we have more of the same.  USDJPY is making new highs on no particular news other than the usual: SPX needs help. continued for members…

The only problem with USDJPY’s ramp is that it’s almost to overhead resistance already.  What about the rest of the session?

Look for SPX to test the SMA20 at 2146.86 right off the bat, followed by the white channel midline at 2148-2149, depending on when.CL continues to backtest its H&S neckline after bouncing, again, off the white channel top. UPDATE:  9:31 AM

There’s the SMA20 tag.  Interestingly, VIX is rising and CL and USDJPY are backing off.  We might get a downturn here back to close the gap or at least backtest the SMA100 at 2144.22.  A red TL backtest would take it back to 2141.25 or so.  We haven’t had a nice pop and drop lately…VIX’s spike was abrupt, starting right at the open.UPDATE:  9:42 AM

Here’s a nice entry at 2141.23, gap close and backtest.  Tight stops are advised.But, VIX needs to reverse right now…  …and/or USDJPY needs to break out……because, there’s no love coming from CL. UPDATE:  9:49 AM

VIX is gapping higher.  Looks like the bulls might lose this skirmish.  Watch your stops.UPDATE:  10:04 AM

Back to cash if SPX drops though the SMA10, as VIX is not cooperating at all.  It backtested the white TL and is testing the SMA100.UPDATE:  10:08 AM

Back to short here at 2141.02 as VIX is popping through its SMA100 while SPX backtests the red TL.  Lots of support below: 2138.04, then 2134.72 and 2135, 2133 and 2127.Here’s a better view of the bigger picture.  This white channel isn’t terribly important in the scheme of things, but there is a lot of downside potential if the larger white channel breaks down.As we discussed yesterday, ES suggests lower, as in 2111 — the equivalent of SPX 2117.  Of course, it also shows over a dozen stick saves at 2126.90 — ES’ equivalent of 2134.72.UPDATE:  10:24 AM

Perhaps they’ll try to hold it here at the white channel bottom — watching CL to see if it bounces or VIX if it reverses.UPDATE:  10:27 AM

Covering and will try a long position here at 2133.69 with very tight stops.  I have serious doubts about whether it’ll hold, as USDJPY is up against resistance and CL’s bounce is very anemic so far — not to mention completely unfounded. As a member just pointed out, RUT is tanking.  In fact, it broke down on Oct 13, but has been backtesting higher since then.Another problem for go-go stocks is AAPL, which is clinging to a breakout channel. One false move, and it’s a long way down. UPDATE:  11:00 AM

CL is testing its neckline here.  VIX is undecided.  So, SPX is, too.

UPDATE:  11:39 AM

Closing the long position here.  After a nice initial bounce, SPX is back below its SMA5 10/20, and CL has failed to retake its neckline.  USDJPY seems stuck at the channel top, and DX is climbing — on fear, this time.   At the moment, I think TPTB are running short on tools to prop it up. NKD is almost to 17500 — potentially important resistance.USDJPY just completed a Butterfly to the purple 1.272.CL has yet to push past its neckline. UPDATE:  11:54 AM

I’ll try a long position again, as SPX is back on top of its SMA5 10 (solely on VIX getting beat up.) Soon as I posted that, CL popped through the neckline.  Miracles never cease.But, it’s almost out of room.VIX is almost out of downside room.And, NKD just tagged 17500…

SPX is coming up on its SMA5 200 at 2142ish.

UPDATE:  12:08 PM

SPX just reached its SMA5 200 as VIX reached its.  Will we get a coordinated pop?  If VIX can dip below the white TL, SPX should be able to push through.  More likely, though, that SPX will pause here and backtest the white midline at 2140.53 as its SMA5 10 comes along. UPDATE:  12:43 PM

This whole thing has a very nasty smell to it.  There might be additional upside, but it’s sure not coming easy.  And, the downside risk is palpable.  I’m dumping the long position here and moving to the sidelines.

I’m going to jump on a conference call for a bit.  Should be back in an hour or so.

Also, I just learned I need to be in Philadelphia tomorrow and New York Monday and Tuesday of next week.  I should get a chance to post each morning.

UPDATE:  2:33 PM

SPX and CL are breaking down, again.  I’d short here at 2139.23 with very tight stops.  There’s still a lot of room for VIX to drop, which is a real risk for any short position through the rest of the day.  My guess is SPX will close either on the channel bottom at 2135ish, or at the SMA100 at 2144.22.  If it rises back above the white TL and SMA5 20, now at 2138.64, then it’s worth going long again.  Otherwise, the risk is to the downside. CL is holding onto its current price, hoping to make it through to the close.USDJPY and NKD are still pegged at overhead resistance and will likely break down after the close. And, DB is being propped up in the face of big selling pressure.  It’s a backtest of a backtest – which would normally be quite risky.  However, they’ve got it this far.  I wouldn’t rule out a pop up to 15.04.UPDATE:  3:21 PM

This will awfully darned frustrating if ES get’s propped up here yet again… UPDATE:  3:57 PM

Might try to hold it here on this TL, but it sure feels like there’s more downside potential.  I’d hold short overnight if you can hedge of handle to gap risk.  If not, here’s your exit.  I’ve seen plenty of less legit support TLs hold up.