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SPX should reach our 2065 target on this morning’s opening.  All it took was some soothing words from ChairDove Yellen and, of course, a well-timed 3.5% rally in CL.  It’s breaking out of the falling channel it’s been in since Mar 17, but that’s not important.  And, it probably won’t even last.  It doesn’t even need to.

Because, before it does, SPX will have been shoehorned past major overhead resistance.  I had to go back to Feb 22 to find my first mention of it.  From Cornered Bankers Resort to Ramping:

Once the SMA50 is topped, the upside case shifts to the purple .618/SMA100 combo at 1999, followed by the white channel top and purple .786 at 2050 in late March.  An alternate target is the .786 of the drop from 2134 to 2010 at 2065.  Either is legitimate, but 2065 means SPX will have broken out of the white channel – which is, of course, the path central planners have in mind.

There are only two more of these obstacles to go before SPX can hope to reach all-time highs.  Could fundamentals get in the way?  Absolutely.  But, not if the central planners play their cards right.

continued for members…SPX will depart the falling white channel that has guided the lows exceptionally well for the past year.  The highs…not so much.

The yellow .786 at 2065.25 is the key level to hold — and, SPX should easily reach it today.  Once the white channel is a thing of the past (and, assuming it survives a backtest or whatever backlash might await it) then the falling purple channel is the next obstacle.

The yellow .886 at 2097.71 intersects with the purple channel top in the next two weeks.  And, after that, 2135 awaits.

Note that USDJPY bottomed out at the red channel midline and is in the midst of a strong rebound.UPDATE:  9:32 AM

There’s the yellow .786.  We could get a backtest of the broken white channel for those looking for a short-term trade.  But, USDJPY and CL are showing no signs of falling off just yet, so I’d be leery of shorting.  If you do, very tight stops are in order.  And, as always, watch CL like a hawk.The white 1.618 is up above at 2077.68, and it intersects with the red channel top.  There’s at least a 50:50 chance that SPX heads up and tags it before pausing much.

UPDATE:  9:40 AM

SPX has pushed past the .786 and is waiting for the MAs to catch up.  CL is also pausing here.   SPX might level off or backtest the .786, but I think it’ll try to defend it.  A potential turning point: when ES reaches its .786 at 2063.  It should equate to about SPX 2071.50. UPDATE:  9:51 AM

ES just reached its .786, so I’d take a short position here as a ST trade back to 2066.  Tight stops are advised, as it might well wait for the SMAs to arrive first. UPDATE:  9:06 AM

They’re being very cautious with that .786 Fib.  Whiel CL tagged and backed off its SMA10, USDJPY has found support from its.  UPDATE:  11:34 AM

That’s probably close enough.  I’d cover the short here and go long.  CL has backtesting a TL from yesterday’s lows and the SMA5 200, so we should get a bounce here.  My only hesitation is ES, which looks like it’s not quite done.  The SMA5 200 beckons at 2054ish.  Also, CL could be aiming lower as well.  The red TL at 38.4 is the next major support.

UPDATE:  12:17 PM

Coming up on an important level as ES/SPX backtest broken TLs and CL is trying to break out of the white channel again.  Mind your stops.

If SPX should drop back through the rising SMA5 50 now at 2063.52, then a white channel top backtest is possible (2053ish.)  I suspect the goal is to get an actual SMA5 200 tag for ES at 2054.5.0, but we’ll see.

UPDATE:  12:39 PM

Here’s the test: ES, the white channel (from Feb 11) midline and SMA5 200, CL its SMA20, USDJPY its TL from this morning, and SPX kinda hanging in the wind.  If it doesn’t rebound from here, time to short. UPDATE:  1:06 PM

This could easily be a head fake, but ES and USDJPY are breaking down.  And, CL just dropped through the SMA20.  So, I’m obliged to follow their lead and short here for 2052.71 — the white channel backtest at the white .886.  It would also close this morning’s gap and set a nice trap for bears who are playing the earlier reversal from the yellow .786 at 2065.25. UPDATE:  2:51 PM

While this is probably a head fake to wash out weak shorts, I’m nervous about it getting away from us.

SPX is again paying more attention to a CL bounce than the USDJPY dip.  CL’s SMA5 50 will arrive at the red channel line backtest around 3:00 — probably the turning point if there’s going to be one.  Wouldn’t be surprised if they’re just trying to delay a backtest of 2052 until a gap down tomorrow morning, forcing a “short overnight” decision.

UPDATE:  3:02 PM

Okay, I give up.  Looks like ES is determined to close at its VWAP at 2058ish.  Back to cash, though I’d gladly go short if CL would reverse or USDJPY would plunge more forcefully. UPDATE:  3:42 PM

It’s almost certainly a head fake as far as the next 20 minutes, but I’d want to be short on any sustained drop through 2065.25.  If they hold these prices into the close, I expect a gap down to tag 2052 or 2056 in the morning. But, as always, shorting overnight only makes sense if you can hedge or keep a close eye on it. UPDATE:  3:55 PM

Looks like it’s not going to break down during trading hours.  But, again, I’d short here if you can handle the overnight risk.