There was some indecision about how low was low enough.  But, in the end, TPTB didn’t let us down.  From yesterday morning’s Stopping the Bleeding:

When ES, which has already reached its SMA200, starts popping strongly, we should have our indication.  At that point, CL and USDJPY should be strong candidates for long positions… I see this morning as another Feb 11 — where CL and USDJPY will be instrumental in forcing a turnaround once the SMA200 and/or yellow channel top are reached.

USDJPY started ramping first thing yesterday morning, and didn’t stop until after the “markets” closed, when it reset so it could do it all over again.  Net gains so far:  112 pips, about 1%.And, CL popped at precisely 2:25 PM, and has since settled into the kind of channel that algos love.  Unfortunately, it has led CL straight to a channel midline that could prove problematic.  Net gains so far: 4.3%.

continued for members...

Meanwhile, EURGBP reached our second target and is digesting its gains.ES is currently up about 24 points, which coincidentally is enough to get SPX back to its SMA200 at 2020.29.After that, we’ll have to see whether USDJPY and CL can break out.UPDATE:  9:39 AM

SPX just reached the SMA200.  I believe CL and USDJPY will probably kick it up over the threshhold, so would hold long until we see some weakness settle in.  Note that ES’ SMA200 is just ahead at 2015.15. UPDATE:  9:49 AM

Seems to be petering out here, as ES’ just tagged its SMA200, which technically is on a backtest.  Back to cash.  If this is like most other algo-fueled rallies, SPX will sit here until the SMA5 10 arrives, then start inching higher again. UPDATE:  10:06 AM

SPX should dip to tag the SMA5 10 as it pushes through the SMA200.  Nimble traders could try picking up a few points, but it hardly ever reaches the target as it’s so widely anticipated. 

In fact, it”s so widely anticipated that it’s morphed slightly over the past month or so.  We sometimes get a dip, indicating the backtest is imminent, but which doesn’t quite make it to the backtest target before being swept up by the SMA5 10.  It is carried to a slightly higher high to shake out those playing the dip. 

After they’re stopped out, then it dips to the backtest target to screw over those who played the breakout, arriving there at about the time as the SMA5 20.  If that all sounds kinda confusing, just know that it isn’t usually worth playing.

This one’s a little tricky, as it involves letting ES drop back below its SMA200 and then getting it back on top.UPDATE:  10:43 AM

This might be as good as we get.  I’d take the profits and revert to cash until we get a sense of whether it’ll rebound or not.  If it dips below the SMA5 20, I’d want to stay short. Here’s one potential problem TPTB are facing…

…and, here’s the other one.And, here’s the upshot for ES — a flatter rising channel that shows 10-12 points of downside to the bottom and the SMA5 200 at 2001.UPDATE:  11:00 AM

I could be crazy, but I think we might get some more downside here.  SPX is clinging to the SMA200 on USDJPY’s continuing spike, but CL is dropping like a rock.  I’d short here on any drop through 2020.29. UPDATE:  11:04 AM

Shorting here for that red channel midline at 1981.  Tight stops, of course.  I’d put the odds of it working out at 40:60.  It would have to get down through the short-term moving averages and the gap close at 2003.85.UPDATE:  12:36 PM

CL has pushed beyond the SMA50, seemingly willing to go wherever it takes to keep SPX propped up above its SMA200.  I’d revert to cash here, and only go short if it drops back below 2020.29 — which it probably will do after tagging the SMA5 200 at around 2026-2027. It seems to me that EURGBP is going higher after backtesting this little flag pattern.  And, USDJPY is running out of steam.

UPDATE:  3:15 PM

SPX pushed back up through the SMA200 and is closing in on the SMA100.  I’d love to short here, as the rebound is really overdone.  But, they’ve run USDJPY and CL up to current levels without reservation.  I can easily see them resetting overnight and doing the whole thing again tomorrow.   Short here only if you can watch or hedge the position carefully overnight. Note that CL has completed a backtest of the rising purple channel midline.If they’re ever going to flesh out this channel, it has to reverse here.UPDATE:  3:41 PM

Apparently, it’s really important to TPTB that they breech the SMA100 as well.  SPX just pushed back up through the SMA5 10 and is closing in on the MA on strength from USDJPY and CL and VIX monkey hammering.  Back to cash. They’re painting this as an amazingly positive close, but I just can’t bring myself to go long into the close.  Maybe if it weren’t such a sham…  But, honestly, consider the event risk.

UPDATE:  3:51 PM

I’d take one more stab at shorting here and see if SPX can get some profit taking going in the next 9 minutes.  Again, I’d not hold short unless you can handle the risk of another gap higher in the morning or otherwise hedge or watch your position carefully.  Likewise, I’d not hold long. There’s a lot of uncertainty out there still, and there’s no way of knowing whether this V-shaped bounce has run its course.  I see EURGBP heading up to .84111 very soon, possibly this evening.

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A quick heads up: I have an appointment out of the office this afternoon at 1:20pm.  It should only take about 1 1/2 hours but I’ll be out of touch during that time.  Also, I’ll be switching servers for the site this afternoon, sometime after the close.  The site will probably be down for 30-60 minutes at some point.