The trickiest part of harmonic chart is the area between the .786/.886 Fib retracements and a former high.  Even in unrigged markets, this area could mark anything from a prelude to new highs to a slight overshoot of a corrective wave.

SPX has reached this, our upside target, with little trouble, largely on the back on CL’s 63% spike since Feb 11.  Now that we’re here, it makes sense to be a little more cautious.  The manipulation that has been the hallmark of the past six weeks is about to get much worse.

continued for members…

CL is nearing the SMA100 — a potential real bounce spot.  If it falls below – this would be a very bearish development, at least in the short run (until they ramp it back up.)USDJPY is heading for 111.01 — the red .886 and red channel .236 line – as well as horizontal support from Feb 11. SPX is likely to do some backtesting today, as long as USDJPY and CL permit it.I’d start out short, aiming for 2065 and, if that doesn’t hold, 2062ish.  ES might be driving this one, with 2046ish being a likely target.

The upside targets remain the white .886 at 2081.55, followed by the yellow .886 at 2097.71.  If we got an aggressive bounce from CL and USDJPY, there’s no reason we couldn’t reach 2097 as early as late Tuesday or early Wednesday.  But, if USDJPY breaks down below 111.01 or CL below 35.99, the odds of a quick thrust higher to 2097 fall precipitously.

UPDATE  9:50 AM

Quick update shows CL putting on the brakes by threatening to — what else? – break out of the falling white channel.USDJPY is hanging on to the red .786 at 111.33, but should break down. SPX’s targets… …and, a close-up.UPDATE:  10:10 AM

CL is spoiling the bears’ fun, so far.  It’s likely to at least delay any downside — perhaps until the SMA5 200 reaches the yellow .786 at 2065.25?  Or. maybe they’re simply intending to catch the rising SMA50, now at 2068ish. USDJPY is probably going to backtest the SMA5 200 at 111.53ish.Hanging in there with the short position…but, finger on the button.

UPDATE:  10:54 AM

Might get a bounce here at the bottom of the channel I drew in.  CL is on the rise again, but USDJPY is breaking down. UPDATE:  11:03 AM

I believe we’ll probably see 2062-2065, but the risk of a run back up to 2070 can’t be ignored.  I’m not crazy about the way CL and USDJPY are holding support.  I’d rather cover the short here and revert to cash for the meantime. UPDATE:  11:15 AM

Back to short, as USDJPY is breaking down.  I don’t see lower lows ahead than originally anticipated, just regaining some of my nerve after prematurely pulling the ripcord earlier.Could be just a few points to the SMA5 100/200 at 2064ish, or could be ready to backtest the red TL at 2062ish.  Depends largely on CL, which is bouncing prematurely. UPDATE:  12:04 PM

The meltup has begun.  I’m tempted to revert to cash, but it seems like CL is about to reverse. UPDATE:  12:15 PM

I assumed SPX would reverse down to the SMA5 200 after reaching the top of the channel, but USDJPY and CL aren’t going anywhere.  Unless USDJPY heads down to 111 forthwith, SPX is likely to break out.  I suspect they’re in delay mode as the SMA5 200 is approaching the yellow .786 at 2065.25.  Can’t think of any other reason for CL and USDJPY to be loitering around in a potentially bearish position — must be planning on their 35.99 and 111.01 tags, and just don’t want to disrupt SPX momentum.

UPDATE:  2:04 PM

SPX just reached the .786 and SMA5 200 as CL tagged its daily SMA100.  I’ll cover the short here and go long for what should be a bounce.  The only issue is that USDJPY still has some downside potential.  Perhaps it’ll drop after CL has already bounced.  In any case, it suggests tight stops — just in case.UPDATE:  2:08 PM

Back to short, as CL is signalling further downside and USDJPY hasn’t made any move to break out.  Looks like 2061-2062.  Remember ES’ 2053.33 target from above — though 2047.50 is also a nice looking option. UPDATE:  2:36 PM

Again?  Should have stopped bouncing at the SMA5 200 or SMA5 10, but it’s slipping up past it.  This sets up a potential lengthy bounce or, if it reverses right away, a nasty head fake.  I frankly don’t have the energy to stare at it for the next 90 minutes if it pops through, so I’ll revert to cash here and get short again only if it drops through the SMA200 on CL and/or USDJPY weakness.One positive for bears, CL is backtesting the SMA5 10 and white midline at the same time — should reverse here if it’s going to. UPDATE:  2:52 PM

SPX is reversing at the SMA5 20 and CL at its midline.  I’ll take a chance on a short here for 2061-2062. Tight stops are advised, as USDJPY is still looking frothy and SPX’s SMA5 200 is now support at 2065.27.

UPDATE:  3:05 PM

Nothing doing.  Back to cash.  I have to step away for 15 minutes.  If it somehow pushes below the SMA5 200 at 2065.13, by all means short the sucker.  Otherwise, it’s not looking very likely.Just as I typed that, look what USDJPY did…  I presume this means they’re not ready for a full red TL backtest today.  Perhaps as a gap lower in the morning.UPDATE:  3:18 PM

Taking another crack at a short here as CL is reversing off the SMA5 20 and USDJPY the SMA5 100.  Again, looking for a push through the SMA5 200 to confirm.  Otherwise, just another head fake.The red neckline is around 2060.45 around the close.

UPDATE: 3:31 PM

Probably leaving pennies on the table, but I’m done.Good old VIX.  Remember when it meant something other than Citadel finessing the close?UPDATE:  3:50 PM