The EURUSD did an about face this morning, as everybody and their uncle seems to have front run the ECB yet again (I’ll be surprised, one day, when it doesn’t happen.)The hilarious part is that the USD decline occurred right in the middle of a (rare) CL decline.  Our forecast had called for a declining dollar, so we’ll overlook the obvious incongruity.  Since when does anything involving CL make sense anymore?

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Since CL is stuck at a channel midline……I’m inclined to think the SPX decline will stop at the red TL identified yesterday.  Though, the yellow .886 at 2097.71 would be a logical overshoot. USDJPY is clinging to last night’s highs, so I assume it’s being held in reserve for a breakout.As is NKD…UPDATE:  9:46 AM

There’s the .886 tag.  We should get a bounce here — thought I’d want to see CL and USDJPY rebound first.  It could be aiming for the red TL at 2096.20ish, but I think this is close enough.  Back to long, but watch CL. If the red TL doesn’t hold, the next support is the white channel midline, currently around 2084.30, followed by the white .886 and red midline around 1081.55 (the white dot.)

I have to step way for a few minutes.  If SPX drops through the red TL at 2096.34ish, I’d revert to short.

UPDATE:  10:29 AM

SPX has backtested the SMA5 200.  CL is dropping further – probably heading toward the red channel bottom at 42.57, though USDJPY is still rebounding.  We’ll no doubt need CL to rebound in order to push through.  But, for now, a rising USDJPY is offsetting the falling CL and SPX seems content to remain in limbo until it’s resolved. UPDATE:  11:33 AM

Pulling the plug on the long position here, as CL is running into the channel midline and USDJPY into the purple TL.  Back to short, though I’ll jump back in if either pushes through. UPDATE:  11:51 AM

With SPX in danger of dropping through the red TL, CL just popped up through its red channel midline.  Back to cash here until it’s clear it can break out. UPDATE:  11:59 AM

CL spiked up to resistance and is backing off, while USDJPY looks determined to tag the white channel bottom in the next 30 minutes.  Back to short here. UPDATE:  12:11 PM

Not sure why I sketch these things out, as they’ve been routinely busted by TPTB lately.  But, there’s a H&S Pattern on both ES and SPX that suggests 1 17-pt drop from here.  Note that on ES, at least, they’re defending the neckline.  A drop by CL and USDJPY to their channel bottoms would easily do the trick. If they’re going to bust this one, too, they’ll wait until SPX’s SMA5 10 gets very close, then spike CL north of the SMA5 200 at 44.03 and USDJPY up past the red TL.  If it plays out, it would allow SPX and ES to backtest their daily SMA10, which would be quite a feat in this “market.”

Note that ES could reach its SMA10 today on that move, while SPX’s SMA10 would arrive at 2080 tomorrow.  Note also that the lower red TL running through the white dot is the midline of the rising red channel from Feb 11.Also, if they waited until the close to let it play out, CL could tag the red channel bottom at about the .500 Fib at 42.94 — a relatively shallow retracement.

Needless to say, SPX’s rising red channel is long overdue for a tag on its bottom.  But, given the amount of propping up going on lately, I’ll believe it when I see it.

UPDATE:  12:39 PM

USDJPY is breaking out.  CL is trying to offset it, but SPX just pushed past its SMA5 10.  I suspect it’ll go sideways for a while and plunge at the close as discussed above.  But, it seems prudent to stay in cash until that happens.  A pop up to 2101 seems like a good possibility. UPDATE:  1:38 PM

SPX is slipping lower, so I guess I’ll jump back in.  Just don’t like CL’s positioning, with the midline and SMA5 100 just above.  Back to short with tight stops.UPDATE:  2:00 PM

I know this is like watching paint dry, but we seem to be on track for a bottom around 2:45pm or so.  One potential hitch coming up, yesterday’s low at 2091.68.  TPTB have been very stingy about allowing new lows, and this would be the first in a while. Don’t be surprised if we get a bounce here.CL is acting like it might break out.  My gut is that they’re merely trying to put the brakes on to prevent a sudden plunge.UPDATE:  3:36 PM

Going into the final half hour and SPX is acting like it wants to recover into the close.  But, it’s been doing that all day — making noises like it will break out, and dropping instead.  As long as USDJPY and CL are behaving themselves, we should get to the 2080 target (2073.43 on ES.) UPDATE:  3:43 PM

CL and USDJPY are breaking out and VIX is getting crushed.  Watch your stops.UPDATE:  3:48 PM

Guess they just can’t help themselves.  Back to cash, though I’d gladly switch back to short if SPX reverses.UPDATE:  3:51 PM

Looks like we’re possibly getting that reversal here.  Back to short with very tight stops. If it doesn’t dive in the last few minutes, then we’re likely to get some follow through in the morning.  As always, only hold short overnight if you can hedge or monitor your position.