It seemed like it would never get here.  And, of course, it won’t be over tonight. It’ll merely be on to the next chapter: the bickering, the legal challenges, the market fallout.

The algos voted yesterday, with an incredibly strong push that exceeded three upside targets. The only silver lining for bears is that yesterday’s excesses are settling out, with backtests of that overhead “resistance” quite likely.

continued for members…

A quick glance around the horn shows CL likely to make that SMA200 tag today.  We’ll get an API report later this afternoon.

USDJPY, meanwhile, is continuing to ramp for all it’s worth — with the white .886 at 106.638 back in focus if it pushes past the white midline.ES and SPX will apparently go on, pretending that they tagged their SMA200s last week.  Today, we’re likely to get a backtest of the SMA10’s.  ES’ is at 2111.95 – another 11 points off current prices.  And, SPX’s is at 2118.32 – a 13.2-point drop from yesterday’s close. Bottom line, we should get lower prices today.  I’d start out short but use judicious stops in case they decide to keep the ramp going throughout the day.Interestingly, VIX never quite backtested its SMA10 yesterday — a sliver of hope for bears amidst an otherwise dismal session.Needless to say, if the SMA10s don’t hold, there’s much more downside.  Yesterday’s gaps are, of course much lower.

UPDATE:  11:05 AM

Closing the short here at 2129.46 as ES just poked above its SMA5 200 and VIX is going into ramp mode.  If SPX pushes through yesterday’s highs, it will likely set its sights on 2134.72.  If/when 2134 is topped, then our next upside target is the SMA100 at 2145.76, followed by the red .618 at 2151.78. ES’ next upside target is more clear at 2140ish.

ES:

UPDATE:  12:11 PM

ES just reached our 2140 target, so I’d close the SPX long position here at 2143.78 and go to cash.  Could be a little early, as ES still has a .886 just above at 2141.66 and SPX’s SMA100 is still higher at 2145.76. VIX looks like it’s getting a bounce here, and CL seems like it’s about to reverse. USDJPY, on the other hand, seems to still be running strong.UPDATE:  12:29 PM

I’d try a short position here at 2145.52 as ES just tagged its .886.   Tight stops, as a little VIX hammering is all that’s needed to get SPX up past the SMA100.  The target is 2134.72.UPDATE:  1:44 PM

SPX almost got a little momentum going……but CL is propping it up by inching higher minute-by-minute. USDJPY might be tapped out here at a .886.Though, DX just pushed up past its SMA10.In the end, I suspect it’ll be VIX that prevents any real downside today.  If 2134.72 is allowed to happen, the timing should be around 3pm ET.  And, you can bet it’ll require CL’s steady climb to break down.

UPDATE:  2:34 PM

Just noticed a potential problem with our downside target.  SPX’s rising purple channel bottom is around 2134.72 at 3PM.  It’s about 3-4 points lower than right now.ES’ rising red channel bottom is much lower – at 2125.50 or 8 points lower right now.  Even if ES stops at the SMA5 200, it would still mean <2134.72 on SPX.  If it went all the way to 2125.50, that would mean SPX 2128.50, right near the SMA20.  It would be a slight breakdown of the purple channel.So, we’ll have to keep a close eye on SPX as it approaches 2134.72 to see whether it, or ES, will get the more legit tag.  Probably worth watching VIX as it approaches some of its SMAs as well as the purple TL sketched in below.And, of course, it wouldn’t be a party without CL weighing in…UPDATE:  3:05 PM

It doesn’t look like they can find any sellers in here.  Back to cash as SPX is pushing up through the SMA5 10 and VIX is reversing at its SMA5 200.   It might bump up against the SMA5 20 at 2140.45 and then drop back down, but I just don’t trust it — not after last week’s failure to tag even the SMA200.UPDATE:  3:13 PM

I’ll take another shot at shorting here, as ES just backtested its red channel midline.  It gives me slightly more hope, but it’s definitely a low probability short.  The only reason I’m trying is because of the 12 point gain suggested by ES.  Clearly, there will be plenty of folks who could prefer to reduce their exposure going into the close.  Can they outweigh the algos?  Stay tuned. UPDATE:  3:24 PM

Getting a little dicey here…back to cash for the night unless it reverses right here.  I still like that the SMA5 100 is about to reach 2134.72 in a few minutes…  Makes for a nice target.  But, USDJPY is ramping again, and VIX has that look about it — that “think I might plunge 10% in the next 30 minutes” look.

Remember, just because SPX is completely manipulated doesn’t mean it can’t rally to an otherwise preposterous height.  It happened in the wake of Brexit.  It could happen here.

I would go into the close in cash, regardless of what kind of close we get.  There will be other opportunities to bank some profits, but the risk of a large overnight move can’t be ignored.

UPDATE:  3:50 PM

One last fling…back to short with tight stops just for grins.  To reiterate, there’s nothing to suggest it’ll play out.  I’m just thinking there might be some traders who might like to reign it in here.  Consider it the equivalent of throwing a quarter into a slot machine as you’re boarding a flight in Vegas.UPDATE:  EOD

Back to cash here at the close.  We finally got the purple channel bottom tag — but, of course, 5 points higher than it should have been.  All in all, it was a tiresome and somewhat depressing session for anyone who misses the days when stock prices weren’t managed every minute of the day.

It’s okay USDJPY, CL, and NKD.  You can come back down to earth, now.

Our downside targets as posted yesterday, just in case…

My thoughts from The Wheel’s Spinning:

If SPX is rejected at the SMA10 or white midline, then our downside targets start with the SMA200 — which is now at 2084.39.  Beyond that, we’ve had our eye on 2068.92 for a long time.  It’s the white .618 and the bottom of the purple channel and .236 line of the yellow channel.

If 2068 doesn’t hold, than we should see the falling white channel expand, with a bottom or midline tag at 2034.97 — white white .786.  Note that, at this point, we’d have retraced barely more than .382 of the post-Brexit drop.

If 2034.97 doesn’t hold, then things get really interesting.  The white and purple harmonic grids don’t line up, so I’d be inclined to switch to the purple one for guidance.  And, the purple grid has a .618 retracement at 1956.68 that is only slightly below the yellow channel bottom, currently at 1963ish.

I put the yellow dot at 1956.68 out on Dec 14 to line up with a FOMC rate hike.  But, it could also line up with Nov 9 just as easily and might represent a really ugly post-election debacle.  If the yellow channel breaks down, then we’re looking at other Fib levels such as the .786 at 1892.

 

 

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