It’s Tuesday and it’s the end of the month — with averages needing a bit of a boost to report monthly gains. Oh, and the Fed is kicking in a couple billion just because.
The Nikkei futures look to be aiming for the white .618 (14,525) at the SMA20 (14,531) — also the top of the falling channels.
After yesterday’s reality check, USDJPY has been guided back above the red channel bottom and is backtesting the white channel midline and red IH&S neckline. 103 looks like a safe bet. Note that the 10, 20 and 50 day SMAs are all down around the red channel bottom (102.4 – 102.46), so a backtest would be completely within reason.
SPX is still positioned to complete an IH&S, though as we noted yesterday there is stillthe gap down at 1844 to close. And, just a reminder, the original conventional H&S is still in play — at least until the head is topped at 1897.