With this morning’s employment report beat, the financial whizzes in the Eccles Building can go back to beating the higher interest rate drum.  Even with the assessed odds of a September hike priced at a measly 10%, look for the Fedspeak to tilt decidedly more hawkish in the coming days.

The USD, which bounced off our support zone on Tuesday, is getting a nice boost this morning.  This will aid the USDJPY, which has been on life support since tagging our 100.81 target on Tuesday.continued for members…Note the USDJPY tagged our original 100.81 target again overnight before popping higher on the employment data.

It’ll take some pressure off oil, which has been doing all the heavy lifting lately.  Look for it to backtest the SMA200 at 40.75.Futures are up 9 points with 10 minutes till the cash open, which means SPX will have no trouble popping through the falling red channel top and will rejoin the rising red channel that broke down late yesterday.

Note that ES’ .886 is up above at 2173.62, another 5 points higher.

A full 10 points would get SPX back to the .886 at 2174.72.  15 points would have it nudging its previous highs at 2178.29, which these days probably means another new high.  Don’t be surprised if it reaches our 2180 target from two weeks ago.Since the analog post I started on the 3rd was interrupted by technical difficulties, I’m going to leave the daily squiggles for now and work on finishing that post.  I’ll return here after I’ve completed it.

UPDATE:  10:03 AM

There’s the new high and purple channel top.  I’d close the long position here and go short with very tight stops. UPDATE:  11:04 AM

Looks like ES wants to join SPX in the new highs club.  USDJPY has stalled out, and CL is back below the SMA10 (but spiking higher.)  So, it falls to VIX to drop to new lows, which is providing the firepower for this move.  I’d move to the sidelines as SPX will probably tag 2184.61.  I’d only short if it reverses there and/or drops through the approaching SMA5 20.  I wouldn’t chase it on the long side, as it should be limited to 2185 — not much upside from here.