For a moment, yesterday, it almost felt as though markets weren’t being guided every step of the way.  CL was actually dropping — in sync with reality.  USDJPY was actually dropping — in sync with reality. And, stocks got all the way down to our 2nd downside target.

That was then.  This is now.  With CL within 0.16 of a believable turning point, TPTB decided enough was enough.  CL turned tail after the close, and is currently backtesting the SMA100.  Mark it down as yet more evidence in the “someone’s manipulating CL” case.  By the way, Zerohedge has run a series of articles regarding JPM’s role in levitating CL — for purposes of averting atrocious losses in its energy loans.  Great food for thought, though I would add BoJ, ECB and SNB to the cast of characters who might well be involved.

continued for members…If it pushes through, forget about all those downside targets.  If it pulls back, then there’s a chance.

Ditto for USDJPY — which is backtesting the bottom of the purple channel from 2009 after a not so mysterious overnight ramp job of the type in which BoJ specializes.If the futures hold, the first bump up should be to 1885 – 1888 or so, with the top of the white channel around 1991 as a secondary target.Note that I’ve redrawn the daily chart in an effort to make some of the key Fib levels more easily identifiable.  Many of the colors have changed from yesterday’s charts. UPDATE:  9:33 AM

Hit our initial target.  I think it’s worth a try at a short position here, but keep an eye on CL — which is threatening to push through the SMA100.Standard channel procedure is to drop to the bottom of the falling white channel now — which would be the SMA10 at 1970.10.  Note that 1972.41 would be a backtest of the .500 of the 2134 to 1810 drop.

Of course, 1963.29 is the level to which SPX must drop if it’s to maintain even a shred of integrity.  The white .618 tag last week demands a drop to the next lowest Fib level at the very least.

UPDATE:  10:34 AM

Bailing on the short position, as CL and USDJPY are conspiring to make new highs.  I’d consider reshorting at the white channel top if CL and USDJPY can reverse strongly at resistance. UPDATE:  10:40 AM

Will take a shot here at the white channel top at a reversal, as USDJPY and CL have both reached resistance. Watch your stops, as there’s a 50:50 chance it’ll want to tag the SMA5 200 at 1993.45 first.

UPDATE:  11:25 AM

This is nonsense, but CL is making new highs and dragging SPX along with.  Good chance SPX will run up and tag the SMA5 200 at 1992.50.  It’ll leave us upside down on the last short, but at least we’d have a clear line in the sand for stops.  If it moves through, I’d ditch the short.Note that CL is nearing the red channel midline and white .886, so it should reverse at 38.13ish.UPDATE:  11:31 AM

CL reached the .886 and midline.  Waiting to see about SPX, which didn’t quite reach SMA5 200.  I suspect CL will have to push beyond 38.39 to make it happen.BTW, the timing of today’s ramp points the finger at BoE, ECB and.or SNB for the CL and USDJPY manipulation.

UPDATE:  12:40 PM

They’re trying to maintain the “breakout” here at the white channel top.  If getting out even is good enough for you on a day that’s clearly being heavily manipulated, this would be a good exit point.CL is still hanging around the red midline……and, USDJPY has maintained the rising red channel and its short-term SMAs so far.  Note that ES is back above and defending the rising wedge bottom.

I still believe we’ll get to our targets, just not sure when we’ll get there.

UPDATE:  12:51 PM

This is a little better — though it might just be all we get as USDJPY is rallying off the red channel bottom.  Back to cash if it pops up through the white channel midline. UPDATE:  1:29 PM

This might be as much as we get.  I’ll revert to cash here and wait and see if USDJPY or CL will accommodate any lower. If there’s any hope for more downside, it’s that CL backtests the broken white TL and heads back down to backtest its SMA100.  It’s doubtful, however, that it’ll get SPX all the way down to 1963 unless USDJPY pitched in.  The daily SMA10 at 1970, however, is a possibility — with 1963 the following morning.The ES chart shows how they’ve tried to hijack the falling white channel with the rising purple channel.UPDATE:  1:54 PM

Both USDJPY and CL put a stop to that particular dip.  I’d be inclined to short SPX here, but would need to see CL lose the white TL again — for starters. UPDATE:  3:10 PM

No idea whether this will go anywhere, but I’ll short the rentry to the white channel.  In an unrigged world, we’d already be at 1963.  Don’t think that’ll happen today, and tomorrow is the ECB announcement.  But, maybe we’ll get a good head fake into the close — say, 1979 or even 1970.  Tight stops are advised for obvious reasons.The ES version is definitely more interesting. UPDATE:  3:27 PM

Too good to be true.  Back to cash for the day.UPDATE: 3:37 PM

So, if we get some downside tomorrow morning after Draghi’s perennially front-run ineffective policy announcement, it should start from here.  But, either they’re planning on a nice levitation overnight in anticipation of the wonders of ECB-style QE, or they know it’ll be a bust and are trying to maintain a higher cliff elevation…I don’t know.

All I know is Richard Fisher’s comments earlier today are the cold, hard truth.  My favorite line: “…we injected cocaine and heroin into the system, and now we’re maintaining it on Ritalin.”   If you missed him, it’s worth a listen.

http://video.cnbc.com/gallery/?video=3000500187&play=1