Our membership promotion will wrap up in another couple of days.  If you’re tired of taking cues from the perpetually bullish talking heads, this is a great time to take the plunge.  Volatility is high, and we’re racking up some great results [see: HERE.]

Pebblewriter.com has provided uncannily accurate market guidance since its first post on May 2, 2011 where we noted a top was close (May 2 was the top) to its latest top call on May 19, 2015 [we were one day early, see: The Last Big Butterfly.]

We’re currently offering Charter Annual memberships for about half-off the usual price.  With a Charter Annual membership, your rate is guaranteed never to increase for as long as you’re a member.  For more details and to sign up now, CLICK HERE.

*  *  *  *  *

Feb 15:

If there’s one thing TPTB enjoy, it’s the opportunity to move markets over a long holiday weekend.  Last Thursday, USDJPY and CL all plunged to key levels of support.  As I wrote then [see: USDJPY Finally Relents]:

This morning, the plunge finally reached significant support: the .500 Fib and the bottom of the rising purple channel from 2011.  USDJPY should bounce here.  If you’re a bull, it must bounce here.  The only question: is it too late?

Start out short, but look for an entry point there — keeping an eye on CL, USDJPY and NKD for signs of a turn.  If it’s to happen, it’ll be because all three are screaming higher.

We closed the short and reverted to a long position at SPX 1825.01, assuming that TPTB would do what it took to support USDJPY and CL and, thus, keep the yen carry trade from completely imploding.

Bottom line, they did exactly that.  Since then, USDJPY has recovered almost 3%…  …CL has soared about 15%……and ES has bounced nearly 5%.SPX easily reached our initial bounce target on Friday, closing at 1864.37.

Assuming USDJPY breaks out of its falling channel (it’s a minor thing to ask, Haruhiko) then SPX should test the falling white channel midline at 1859-1863 (depending on when.)

With another 24 hours or so to make things right, can SPX break through significant overhead resistance?  We’ll see.

I’m going back to my vacation and will post another brief update in the morning. I’ll be back to regular hours on Wednesday.

UPDATE:  Feb 16, 2016

ES has given up some of its gains — but, only enough to backtest the broken SMA20.

continued for members…

Note that USDJPY has rejoined its falling white channel, and backtested the bottom.The goal, of course, is to take SPX up past its own SMA10 and SMA20 at 1880.18 and 1884.8 respectively.  And, while it’s there, why not push back above the broken purple channel bottom (also a H&S neckline) at about 1887? Once those marks are taken, it’s on to the white .618 as discussed last week.

As far as a bounce target, the initial goal would be to close this morning’s gap back at the channel midline around 1850.32.  Maybe Janet can force some dovish language this morning to help it along.  Beyond that, I’d start looking at  the white .618 at 1901.16.

It might not be easy.  But, the whole point of backtests is to plant a sense of propriety in the move.  Once the “market” has moved past key overhead resistance, backtesting it renders it something that needn’t be dealt with anymore.

UPDATE:  9:46 AM

There’s the SMA20 tag and purple channel backtest.  Nothing wrong with taking profits here — I’ll do that and go back to my vacation.  But, don’t be surprised if CL, USDJPY and NKD spring back to life and provide additional upside to test the falling red TL at the red .618 at 1894.83 with a goal of topping 1900.You’ll know it’s done settling back when USDJPY and CL reach support and start bouncing.UPDATE:  10:07 AM

The SMA5 10 often provides support after it catches up with the gap higher.It’s pretty obvious how important it is for TPTB to regain the purple neckline.  It’s also pretty obvious how big a failure it was to drop below it.

I’m signing off for now, will hopefully catch up later in the day.

GLTA.