I’ve been observing the CL algo nonsense for a long time, so I’m not easily shocked by the ludicrous goings-on there. This past week has truly set for records for ludicrous-ness (with apologies to Mrs. Seine, my 10th grade English teacher.)

What’s my forecast for oil?  Whatever price is necessary to keep stock prices rising. And, after USDJPY’s dismal showing last night, it’s more necessary than ever.

continued for members… Futures…right as rain.  Pay no attention to the 10-pt dip overnight.  With a .886 tar on the red grid, can we expect any kind of sell-off?  It’s more likely that ES is shooting for the white .886 and red  1.272 at 2095-2096 – a stone’s throw away from the psychologically important 2100.For SPX, this should translate into the top of the falling purple channel at 2097-2098 — one of the last potentially bearish overhead resistance points on the chart.  If that’s broken, then the red .886 at 2101.34 awaits.Note that DX has not only lost its rising white channel line, it has dipped below the band of support that dates back to the end of March.And, EURUSD has popped up to a .886 retracement, departing its falling white channel much like it did back on Feb 25.

UPDATE:  9:49 AM

CL is fleshing out its rising wedge — possibly enough to get SPX down to the SMA5 100 at 2089.  It had support here all day, yesterday, so I’m hesitant to short.  Nimble traders might have a go, but understand you might be unwinding it after only a few points.   If it drops through 2089, then the purple midline comes into play at 2083.50, and then the SMA5 200 at 2077. I have to step away for 30-45 minutes.  It appears likely we’ll step very cautiously toward 2082 or 2078.53.  If you can watch it carefully and have reasonably tight stops, I think it might play out.

UPDATE:  10:35 AM

CL is breaking trend.  They’re trying to work SPX lower, so I’d be ready for that decline to play out here — whatever it is.Most traders are leery of shorting, knowing that CL will quickly reverse whenever/wherever it feels like it for no reason whatsoever other than SPX has declined enough.  This makes it a guessing game as to the intentions of those controlling CL.   Bottom line, no one believes these dips anymore.

And, then you have to worry about USDJPY bouncing on support… sigh.Remember, we’re still owed a backtest of the yellow neckline.  ES shows it clearly – about a 17-pt drop.On SPX, depending on when it happens, I’d put it at about 2074-2076.  If they’re smart, they’ll let it happen at the close on Friday – 2076.50ish.

The damage would be minimized, it would verify the bottom of the rising purple channel, and it would suck in a bunch of bears in advance of a three-day weekend – a manipulative trifecta, as it were.UPDATE:  11:44 AM

Here’s a look at the scenario referenced above.The same thoughts on ES, and the current charts for the supporting cast. Note that DX is back above the support zone, which should bode well for our EURUSD target down at 110.35ish. I have to run out for 2-3 hours, and will check back in later.  I’d pay less attention to the squiggles in between here and 2076, and more attention on how CL and USDJPY bob above/below support.

If SPX pops above the red channel, probably best to revert to cash.  But, for now, I feel reasonably comfortable holding short.  Naturally, if it should break down and tag the purple midline, purple channel bottom or the yellow neckline before expected, you should look for signs of a reversal at that point.

UPDATE:  3:34 PM

Still feeling alright about the chart.  CL and USDJPY are staying subdued, which IMO is intentional.  I believe they’ll to bring prices down to the purple channel bottom either tomorrow or Tuesday.  Even though we’re back to even on the day, I’d hold short — unless you’re unable to watch/hedge/handle an overnight ramp.

The past few days, I’ve been working on a study of past Memorial Day weekend price action, and trying to tie in the Yellen speech and potential rate hike in June.  I hope to have it posted this evening.