TPTB have done a remarkable job keeping the earth from shattering.  But, of course, all those margin calls are being dealt with this morning.  So, we’ll see just how big a deal it was over the next 7 hours or so.

We suggested faded yesterday’s opening highs (2013ish), which proved to be the smart play.  From our initial post:

I’d fade this morning’s rally at the first opportunity, with an initial target of the SMA100 at 2007, and a secondary target that .886 at 1986.35 that we didn’t quite tag yesterday.

SPX tried to rally multiple times — with the usual nudges from USDJPY and VIX — but, managed to close at the lows yet again (1991.47.)  Futures are off about 5 points at this writing.  So, I suspect we’ll finally tag our downside target of 1986.35 that was narrowly missed on Wednesday.

If that doesn’t hold, our remaining targets remain in force from earlier in the week.

continued for members…

I still like the 200-day moving average — currently around 1965.82.  It looks right on the daily chart, as seen below.

And, it fits with the falling red channel as drawn.

USDJPY remains in the trading range we identified a couple of weeks ago.

It has yet to break below the white .886, so remains ready to help out with a boost from SPX’s .886 if that’s what they have planned.As an aside, today is the 16th.  FWIW, the two biggest plunges we’ve had in the past six months ended on Oct 15 and Dec 16.

GLTA.

UPDATE:  9:35 AM

USDJPY pushed higher in the last few minutes prior to the opening bell, carrying SPX along with.  It has broken through these channel lines on multiple occasions, without any follow through.  So, the head fake potential is high.

CL is also making a stand here with an expanding wedge.   Instead of being off a few points, SPX is suddenly rallying. Like yesterday, I wouldn’t chase this one — even if it’s the real deal.

UPDATE: 10:00 AM

USDJPY just tagged that purple channel midline discussed above.  If it reverses, SPX should run out of steam here.  If USDJPY pushes through toward 120.11, SPX should follow suit.

UPDATE:  11:10 AM

SPX got to within 2 points of the .886 this time before USDJPY and VIX took it higher.   Now it’s testing the white channel midline — another do or die moment for the charts.

Since USDJPY is now reversing at an .886 of yesterday’s high, I’ll assume SPX will react here.  The key to how much will be whether or not USDJPY reenters the falling white channel or bounces off.

I questioned above whether this bounce is the “real deal.” I hope regular readers recognize a central bank-manufactured bounce when they see one.  We’ve seen the MARKET (no quote marks) plunge day after day on big volume — a sign of well-placed investor fear.  These USDJPY and VIX-generated, ignition-momentum algo aided bounces on low volume are pure and simple manifestations of direct intervention — nothing more.

But, that doesn’t mean they don’t count — especially for anyone unpatriotic enough to short the “market.”  It just means a now-commonplace disconnect from what investors would do if bankers weren’t scripting the whole thing.

UPDATE:  3:50 PM

USDJPY obviously broke above the channel midline, as well as the white TL connecting recent tops.  But, it hasn’t broken out of the falling red channel.  If it does, the upside is back to 120.11.

SPX has played follow the leader all day, gleefully rallying 22 points at present.  I feel exactly as I did this morning: no way in the world I’d hold a long position overnight.

In fact, I’d be generally underinvested this coming week.  The short euro trade is probably one of the most crowded on the planet.  If they deliver the QE everyone seems to expect, will there be any upside surprise?  If they disappoint, watch out below.