With the US presidential election only 4 months away, few expect the FOMC to do anything to rock the boat.  The BoJ, on the other hand, is threatening to capsize it.

Note the USDJPY’s overnight plunge, all based on the expectation that the BoJ won’t expand QQE at all later this week.  If not, what ‘s to become of the 184-pt post-Brexit rally that was based on the expectation that they would?While on the topic of politics, I’ve had a few inquiries as to where I stand on the upcoming elections.  I’m usually annoyed when celebrities or business luminaries act as though their insight is of any particular importance to voters.  Thus, I have no intention of wading into those same waters.

I dislike most politicians, as I believe they are products of a system that is hopelessly flawed.  Money rules, and it’s become notably worse over the last decade — particularly with the Citizens United ruling.  Until money is somehow removed from the process — and, I see no hope of this any time soon —  I expect candidates to continue to do the bidding of those who donate the most.

I’ll watch the election closely for its impact on financial markets, but will keep my views of the candidates where they belong — to myself.

continued for members…

The futures have done a great job of shrugging off USDJPY and CL’s overnight meltdowns.  Of course, now that the “markets” are about to open, CL is suddenly bouncing back.While, USDJPY has stabilized just above the SMA20.I’m still looking for SPX to tag 2161, but we’ll see what kind of algo response we get to any weakness on the open.UPDATE:  9:35 AM

NKD and USDJPY are easing slightly higher, and VIX slightly lower, which is enough to send SPX up slightly, a possible break out.  I’d go long here with tight stops. UPDATE:  9:46 AM

CL and USDJPY seem to have run into stiff resistance, so this might be as good as we get from SPX.  Watch your stops. UPDATE:  9:50 AM

This is an .886 retrace of the fall from yesterday’s highs.  I’d close the long position here and try a short with tight stops.  This morning’s spike feels very overdone, and consumer confidence numbers are coming out in 10 minutes.UPDATE:  10:01 AM

Consumer confidence and new home sales both beat expectations.  It sent USDJPY up to SMA5 200 resistance.  If it reverses here, I’d hold short.  If it pops through, then I’ll be switching sides. UPDATE:  10:04 AM

VIX, which just bounced off its SMA5 200 moments ago, is being forced back down.  We’re likely to get support from the rising SMA5 10 when it arrives at 2171 in a few minutes.  Watch your stops, as I’m not feeling great about the downside potential.  If it drops through the SMA5 10, then the 20 could provide support at the red channel top around 2169. UPDATE:  10:45 AM

Looks like it could easily slip on down to 2161, but USDJPY just backtested its SMA5 200 and is heading higher — could put the kabosh on any lower prices.  Keep an eye on your stops. UPDATE:  11:00 AM

Just tagged our 2161 target.  Back to long here, with an initial target of the SMA10 at 2164.35, followed by the dropping MAs, probably at the red channel bottom around 2165.  Next lower support is the white .618 at 2157.38.Keeping an eye on everything else to see if they’ll support a bounce here…  CL, USDJPY and NKD could if they hold present levels. VIX is back to the white channel top, but looks like it wants to break out again.

UPDATE:

Back to short here as USDJPY is dipping back below its SMA5 200.  CL is on the rise and VIx dropping, so could offset it.  Bigger concern is NKD, which might have hit bottom.

UPDATE:  11:19 AM

Back to cash on VIX smackdown.  Don’t want to get jerked around into euro close.  I’d look for a good reversal  — maybe at the SMA10 — or a drop through the earlier lows.

 *  *  *  *  *

I’m going to take a break and spend a little time prepping for the fires burning in our area.  They’re supposedly about 2-3 miles away, but the smell of smoke is noticeably stronger.  Time to prepare all the documents and important photos, etc. that would need to go with us if we’re ordered to evac.

My thoughts on immediate future is that SPX will push up to the SMA10 to meet the falling SMA5 10, at which point TPTB will bash VIX and ramp CL and USDJPY to force a recovery.  I’d go long on any breakout above 2164, using tight trailing stops, and with an end of day target of 2172.50ish.  Conversely, I’d short on any drop throughy 2160 with tight trailing stops and an initial target of 2157, followed by 2150.

UPDATE:  1:25 PM

SPX broke above the SMA10, but only got to 2169.35 before running out of steam.  From the looks of it, USDJPY appears to be headed lower — probably to the SMA5 200 currently around 104.52.  I’d short on any move down through the SMA10, with that 2157-2150 target range in mind.  Conversely, a bounce back above it is reason to stay long for 2172. The usual view from our bedroom of lush, green hillsides overlooking the Pacific Ocean is a little different today.  On the bright side: I have a legitimate excuse not to go jogging.

UPDATE:  3:00 PM

Back and forth across the SMA10, not an unusual pattern for pre-FOMC day.  USDJPY and CL are both in a position to bounce and/or break out.  If so, the next move should be up to 2172.50 as discussed earlier.  Folks who are long after the last pop through 2164.25 should remember to monitor your trailing stops, especially around the SMA5 200 at 2167.70 and red channel bottom around 2169. UPDATE:  3:52 PM

Got up past the SMA10 and the SMA5 200, but the red channel is proving problematic.  CL and USDJPY aren’t breaking out as of yet, and VIX is every so slightly on the rise.  I’d take profits on the long position here before SPX dips back down to the SMA5 200.