Still on Track

We left off yesterday with a rather bullish forecast through the end of the month based on CL and USDJPY continuing to push higher. They both have, and futures have responded in kind.

Note that CL exceeded the Feb 18 highs, invalidating a significant downside Fib Pattern, and will do the same to Jan 28’s when it reaches our 34.82 target. If you’ll forgive a small pun, it’s been crude but effective.

continued for members…

Note that USDJPY reached our red target overnight, and is moving higher on a backtest of the broken white rising wedge. Our next target is the white .786 at 114.04 either near today’s close or on Monday.

NKD is in a position to break out of the falling white channel dating back to November, which would provide additional bullish impetus. If the BoJ is amping up the USDJPY this morning (they are) then breaking NKD out of its malaise has to be at the top of the agenda.Our targets for SPX remain intact, with the initial push probably up to about 1960-1963. I’ve set the white dot at 1963.29, the purple .500.UPDATE: 9:47 AM

SPX’s initial push reached 1962.96, just .33 short of our initial target. ES just backtested the rising SMA5 200 and is threatening to drop lower, allowing SPX to backtest the rising purple channel midline. If it holds here, this is a net positive. UPDATE: 10:04 AM

USDJPY tagged the wedge bottom and is settling back, meaning SPX could close this morning’s gap (1951.83) before moving any higher. The SMA5 20 should be at that level momentarily. It depends largely on CL, which just backtested the Feb 22 highs. The safe play is to step aside and wait for it to go down. Note that ES’ corresponding decline has taken it to the neckline of the red IH&S targeting 2079.UPDATE: 10:20 AM

The SMA5 20 is at 1952.63, so above the gap close at 1951.83. We should expect to see a dip any second.CL is tagging its SMA5 200, which should provide good support.UPDATE: 10:26 AM

Just got the gap fill, and ES is rebounding over the neckline as USDJPY, CL and NKD all bounce. Back to long here with tight stops, as the rising SMA50 has now entered the picture at 1945.50. NKD trying to break out on surging USDJPY.UPDATE: 11:35 AM

Things getting a little dicey here with a dip below the red channel bottom on CL weakness. The SMA5 50 is just below at 1951.21. Watch your stops. UPDATE: 12:05 PM

Not crazy about the way this is going. I’d step aside here and go to cash. The next support is a backtest of the SMA50 at 1945.50. We’ll look for a re-entry there, or jump back on the long side if CL and USDJPY retract their declines. UPDATE: 12:09 PM

Back to long, as ES, CL and NKD are all bouncing. Just watch to make sure it’s not just a backtest of the broken red channel.UPDATE: 12:12 PM

Yep, failing already at the SMA5 10. Switching back to cash until it’s clearer: a push back above the SMA5 20 and the red channel bottom.CL is bouncing alright… …but, NKD and USDJPY aren’t.

UPDATE: 12:35 PM

Either breakout or breakdown time. I’ll take a short position here with tight stops. Target is the SMA5 100 when it reaches the daily SMA50 at 1945.50. But, watch CL closely. If it pops again, no downside for SPX — which already completed a C=A. And, there’s the important question of whether or not ES will risk another dip below the neckline at 1950.44. UPDATE: 12:53 PM

Back to long as ES is starting to bounce.Don’t completely trust the move, though, as ES SMA5 200 at 1956.25 could put a lid on the bounce. CL still not spiking AT ALL.NKD popped back above the channel top, but almost immediately backed off. Very, very uncertain outlook.

UPDATE: 1:15 PM

SPX breaking down below the white TL, no break out on CL and NKD is back below the channel top. Back to short here.It seems determined to decline, or at least go sideways all day. The SMA5 100 is up past 1947 now.

UPDATE: 2:42 PM

Will it bounce here? Probably. Will it settle lower to 1945.50 or 1943.06? Probably. But, CL has tagged its SMA50, and NKD and USDJPY have support at current prices. So, a further decline is by no means a certainty. I’ll go to cash here and call it a day. UPDATE: 3:20 PM

Looks like we could one more move here at the close. Back to short for 1943, with tight stops. Note that it could slip lower if it gets going. The SMA50 for ES is 8-9 points lower versus 6 points for SPX40

Will a sell-off to 1943 or 1938 (SMA5 200) derail the upside potential? Not really. It’s still the .236 line of a very steep bullish channel.UPDATE: 3:41 PM

CL is leaking higher, so we might get a pop at the close. I’d cover the short here and go to cash for the weekend.Hard to tell, but USDJPY might be planning a nose dive. Wouldn’t it be nice if all the algos and HFTs and CB trading desks could get together and agree on where the “markets” are going to close?UPDATE: 3:47 PM