I hope everyone is enjoying a relaxing holiday weekend.   Equity markets close at 1PM EST today.

Most of the indices and currencies we watch have been coiling — tracing out triangle or flag patterns this past week.  A break out is now imminent, but it will be a trap.

 continued for members…

The dollar is due to extend to the 1.618 marked below.

ES is due to break out to 1837, but could hit the pause button a few times on the way there — starting with the purple 1.618 at 1815.

After that, it should be clear sailing to the cluster of Fib’s between 1831 and 1840.

Here’s a clearer picture of the operable white channel….

…and, the harmonic picture.  Note the yellow 1.272, purple 2.618, red 2.24 and small red 2.618 all fall between 1834.32 and 1837.26.

As we discussed last week, the timing is a little tricky — especially since SPX has only 12 points to go to reach a comparable reversal point at 1823.42.

Since SPX and ES are roughly in sync right now (1811.87 v 1810.50 a moment ago) I believe this means that ES will hit the higher target overnight or over the weekend while the cash markets are closed.  The alternative is that ES will undershoot or SPX overshoot their respective 1.272.

The USDJPY has an interesting perspective on the matter.  Note how the pair has consistently led SPX (the thin purple line) over the past year.  Note also how USDJPY just reached the .886 retracement of the drop from 103.72 to 93.78 which began on May 22.