Yesterday’s daily post’s title said it all: timing is everything.  Yet, I had no idea the gratification would be so instant when I posted the recommendation to short oil at 9:35AM.

CL is at or very close to the top of a long-term channel that could put an end to any further escapades…  The SMA100 [51.11] is obviously an important pivot point.  I’d want to be short as long as CL is below it.

By 10:30, CL had finished backtesting the SMA100 and was on its way toward our targets.  I dallied for a moment at a price level that would have satisfied the bulls, and then plunged to our secondary targets — registering a 6.8% decline off its earlier highs.

As exciting as it was to hit a jackpot like that, there was something troubling going on in equity-land.  Stocks, usually hypersensitive to moves in oil prices, were barely budging.  They were successfully pinned by VIX, which was moving steadily lower in order to protect SPX’s breakout.

continued for members…

This left SPX in a near-breakout state.I suspect that, today, we’ll finally get the backtest of the former high at 2405.77 — as the SMA5 200 has now reached it.Is oil finished?  I’m going to sign off for now and spend the next hour or two updating the charts.  The implications are as important as ever, particularly with an FOMC meeting coming up.

And, while we’re talking about interest rates and currencies, note that USDJPY finally broke down.  As expected, the USD’s strength against the euro…… is providing ample cover for its weakness against the yen.  The USDJPY is backtesting the SMA50, but will then be free to complete its backtest of the SMA200 – which is now up to 110.04.  It wouldn’t surprise anyone if this waited until Sunday or Monday while the US is on holiday — but, still, a nice trade for FX traders. Keep an eye out for the SMA5 200 tag.  If SPX should fall below it and the 2405.77 pivot, that’s when things get really interesting.  The next support wouldn’t come until the SMA10/20 at 2392ish.

UPDATE:  9:00 PM

My apologies for not getting the oil charts posted earlier.  Something came up and I probably won’t be able to post them until tomorrow.  Here are a few big-picture charts to get you started.