In speaking with CNBC in the wake of the Fed’s decision to cave on any further rate hikes, Richard Fisher said what many of us have felt for years.

“We created a one-way street…all of our markets are hooked on this opioid of cheap money.  How do you wean them from that after all those years of being dependent?”

Short answer: you don’t.  We saw in December what could happen if you even try.

Needless to say, the 10Y tagged our next downside target……and ZN tagged our next upside target… …which was first posted on May 18, 2018 [see: Bonds and Value.]

The fact that the tag took so very long to play out has certainly tested our patience.  More importantly, though, it offers vital clues about the next 18 months in the markets.

continued for members…

I don’t want to steal any thunder from the big picture forecast underway at Macro Factor Cycles and Regime Shifts.  But, I think it’s safe to say that the delay was very deliberate and lends credence to my overall view.

There’s also a case to be made for a drop to 2138 by the end of April — though I think this is less likely.

I have much more work to do on USDJPY and CL in particular as they relate to the big picture.  But, USDJPY’s channel broke down and just backtested.  It should decline sharply from here.  My target is 109.58 in the next few days and 108.36-108.41 by mid-May.

CL and RB will take a lot more work, but it appears as though CL will go ahead and try for its SMA200 (61.87) rather than waiting until April as I had originally thought. Even so, I’d keep tight trailing stops on it just in case.AAPL was upgraded by a few analysts.  Note that it was having trouble pushing through its SMA200 yesterday.  Today, not so much (ah, buybacks…)  Our next upside target is the channel top and .618 at 198.53.  It should make it there, but this move which has left gaps in its wake.  If you play along, use tight trailing stops. Not much upside left compared to the drop which should follow.

UPDATE: 3:00 PM

This bounce just made new highs. I’d fade it right here with loose stops.Note that VIX has bounced on TL support.  A drop through would obviously be bullish. I’d continue to be long VIX.USDJPY’s backtest is complete. I’d want to be short for 109.58 and potentially 108.41. I’m probably a little early, but I’d fade COMP too with stops around the .886.Ditto for AAPL:

GLTA.