Yesterday, CL and USDJPY ran into significant resistance.  But, of course, they weren’t permitted to decline until after the market had closed for the day.  So, we’re left with yet another gap down overnight.

CL is finally backtesting the rising channel it broke out of yesterday.

And, USDJPY very nearly nailed our downside target overnight.

Our downside target for SPX remains unchanged — but, again, we had to hold short overnight to enjoy it.

continued for members…

The current picture on SPX, from 5-min to daily…

The channel bottom at 2109 might be all we get.  But, yesterday’s target — the yellow TL at 2107ish — is more appealing.  If neither hold, we could even get a backtest of the white neckline at 2102 — also the SMA 10.

UPDATE:  9:36 AM

The purple channel bottom.  We should get a bounce here, but I”d watch USDJPY and CL for signs of further losses to come.  Back to long with very tight stops.

CL has rebounded to the top of the white channel into which it intruded earlier.  The key level is 50.55.  Dips below are meant to push SPX lower (or head fake you into shorting!) while rises above it will nudge SPX higher. And, USDJPY has bounced off a TL connecting the overnight lows.  Note that it came up a little short of the 106.21 target.  This prevents me from recommending a long position yet.  Today’s focus should be the white TL and the purple channel top.They form a triangle, so it could break either way depending on the script for the day.  If we get a gap fill for SPX as in previous sessions, watch for USDJPY to push above the purple channel line – if only temporarily.

Based on that unrealized target at 106.21, and DX’s having reached a falling channel midline, I believe we’ll see another leg down — but, perhaps not until after today’s close.UPDATE:  10:02 AM

CL is toying with the idea of dropping through the white TL, and USDJPY has tested and fallen back from the purple channel top.  So, we could see another leg down for SPX here.  Back to short for the yellow TL at 2107ish or SMA10 at 2102.Watch your stops, though, as CL loves to head fake in such situations……and, USDJPY hasn’t confirmed.FYI, I have a meeting at 11:30 ET this morning that will take me away from the commentary for an hour or more.

UPDATE:  10:52 AM

This should about do it for the bounce.  If it doesn’t reverse here, I’d cover the short and revert to cash. UPDATE:  11:06 AM

CL is breaking out, probably just to get SPX up to the red midline.  I’ll give it just a little more rope.  With the 10- and 20-period moving averages below it offering support, SPX will need a pretty dramatic drop by USDJPY or CL.  And, that’s asking a lot in the 30 minutes leading up to the euro close.This should give USDJPY a chance to push lower.UPDATE:  12:09 PM

CL’s dip hasn’t amounted to much.  But, the fact that it has dipped below the obvious rising trend line of support — even if it is on a backtest — has SPX slowly leaking lower. In addition, USDJPY is bumping into the SMA5 200, which should offer some resistance.

I believe we’ll get to 2107 easily enough.  I just don’t have time to sit and wait for it.  Stay short as long as SPX is below the red SMA5 10 and you should be fine.  I hope to be back in 1-2 hours. UPDATE:  2:54 PM

Just checking in, and I can’t say I like what SPX has done for the last couple of hours. It seems to be heading for the red channel top.  And, it’s obviously back inside the rising purple channel — barely.  What an anemic rise, though!

It would make sense to see a reversal at 2117 or so, but CL would need to break down through the solid white TL, or USDJPY back off the SMA5 200 in order for this to occur.  With 50 minutes to go, a gap to close at 2117.96, and lots of moving average support just below, I’m not holding my breath.  Perhaps worth a crack if it drops through 2115… UPDATE:  18:25 PM

For those who were wondering why I didn’t delete SPX’s 2104.78 target after such a strong bounce off today’s lows…

…timing is everything.  Gotta love unrigged “markets…”