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Two thousand posts and 2.8 million page views later, we’re coming up on our 5th birthday. Since we haven’t run any membership promotions in months, it’s time to do something special!

For the next 48 hours (through 3pm Sunday Mar 26), we’re offering a $50 rebate on monthly subscriptions and a $100 rebate on quarterly subscriptions.

And, we’re reopening the annual membership special for another five lucky folks.  The next five people to contact me will score an annual membership for the ridiculously low price of $500.

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If only the news cycle would cooperate, the technical picture is pretty clear: a breakout and a backtest.  But, Wall Street has sold investors on the narrative that the new administration’s policies are responsible for the huge run up in prices since Nov 9.  And, now, stocks are burdened by the fact that those policies seem stuck in the bog.

The only real solution, of course, is to change the narrative.  As Bush II liked to say, sometimes you have to catapult the propaganda in order for “the truth to sink in.”  In this case, I suspect that means going back to the Trumpflation argument.

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The last time we focused on the Nikkei [see: The Nikkei, Yen and Oil: Joined at the Hip] it had bounced sharply following the US election.  Given the fundamental headwinds Japan faced at the time, the bounce seemed fairly preposterous.

…the Nikkei 225…has soared 2,600 points in the face of: (1) the election of a protectionist US president, (2) higher oil prices, and (3) higher interest rates.

But, it had landed NKD at our upside target: the .618 Fibonacci level at 18631.

Ordinarily, we would expect a substantial pullback at a key Fib level like this — especially when the circumstances were a little sketchy.  Instead, NKD settled a measly 500 points (2.7%) and was swept up, like practically everything else, in the year-end stampede to all-time highs.  It spurted up to the .786 Fib at 19669 by mid-December.

If there had been more of a pullback at the .618 Fib, we might have expected the .786 Fib to matter (i.e. a Gartley Pattern.)  But, with such a brief stay at the .618, it wasn’t at all clear.  Coincident algo drivers such as oil had also topped out.  Would NKD be affected?

Unfortunately for the bulls, the race to year-end new highs was exhaustive.  NKD spent a full three months treading water and even breaking down — but, never by much.  Finally, on Tuesday, it did — shedding 2% in a single day.  But, it won’t surprise anyone to learn that this uber-manipulated index landed at strong support.

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Some of you are probably still holding SCO — the Proshares Ultrashort Crude Oil ETF I mentioned in January at 32 [see: Tick Tock.]  It tagged 42.51 yesterday, and is currently trading around 41.60  That’s a 9-pt (30%) gain in two months.

It’s been above its SMA200 for several days, but is having trouble breaking out of a falling channel dating back to April 2016 — begging the question whether to hold it or take profits.

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A month ago [see: Crossroads Ahead ] we targeted the 1.618 at 2335 as an attractive target for a pullback.  The only hitch was that SPX then broke out of the rising white channel it was in, making the backtest a little tricky.  

In this case, patience paid off, as SPX is positioned to backtest the (repositioned) channel and the 1.618 in one fell swoop this morning.

The decline has been forced on an otherwise exuberant (thanks to the algos) market by oil’s timely decline and a (coming) plunge in USDJPY.  Will the backtest hold, or is something nastier in store?

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If you’re looking for a reason for ES’ 12-pt rally off yesterday’s lows, look no further than the usual VIX dump and oil ramp.  Within a few minutes of each other, oil recovered above its SMA200 and VIX reversed off what was a promising (for bears) rally.Consequently, ES and SPX recovered back above their SMA10/20s just as the cross went negative.  Funny how that seems to happen over and over again.

The key question: can oil’s ramp continue, now that the UK’s inflation data (+2.3% YoY) has joined the US in exposing the problem with $50 oil?

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One glance at the eminis chart tells you all you need to know about the past month.  Head & Shoulders Patterns used to be pretty reliable.  This one indicated a 50-pt drop last week — a whopping 2 1/2% sell off.  But, it was not allowed to happen.  

Now, it’s the day after OPEX and quad-witching, which means there’s at least the possibility of things letting loose.

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If you liked yesterday, you’ll probably love today.  We’ve got it all: VIX being slammed down below the long-term channel bottom (for the 17th time in 10 weeks), WTI being ramped up past resistance, USDJPY that can’t hold a simple channel bottom.

The sheer determination to keep prices in the green is, no doubt, a nod to St. Paddy himself.

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As Fed chair, you can hope that your message will be well received — even if it seems a little nonsensical.  I imagine these thoughts were foremost in Janet Yellen’s mind yesterday as she took the microphone.

If, however, you’re peddling the snake oil that the timing is right for a rate hike (with 0.9% GDPNow) and that inflation isn’t yet a problem (even though it’s quadrupled in the last four months), then you’ll be very glad to have a friend in Chicago working the VIX button — your insurance policy.

Even as Yellen’s most non-sensical answer landed like a thud amongst the friendly crowd of “journalists” VIX was in the midst of a 15% plunge.  It was enough to keep stocks on the rise and from performing a basic backtest, the type of which has been commonplace before central bankers took control of the “markets.”

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