…a follow-up to yesterday’s The Eve of Destruction

Everything hinges on the outcome of the Brexit referendum, today.  The results won’t be known for at least another 12 hours, but that hasn’t stopped TPTB from jamming prices higher in the low-volume vacuum of uncertainty.

Their rationale is pretty straightforward.  Suppose you show up to work this morning, intent on reducing your exposure in light of the uncertainty reflected in the polls.  But, the futures are up 25 points.  Someone must know something!

Do you sell into that?  You’d look pretty stupid if greeted with a 3-4% spike tomorrow morning.

For those who are tempted, the overnight ramp job is a pacifier — a way to calm your nerves while hanging in there, long and strong, like Soros and Buffet and all the other billionaires who surely have better information.

And, while we’re talking about it, suppose they do have better information?  Suppose they’ have a man on the inside?  Suppose the vote is rigged?  Given the huge money at stake, it’s not so outlandish a thought.

Trade today if you must, but you might as well find the nearest roulette wheel and give it a spin.  Maybe today’s ramp job is a huge head fake, and you’ll be sorry tomorrow if you go long.  Or, maybe it’s the start of a 100-200 point relief rally to new all-time highs.

We’ll find out soon enough.  In the meantime, to the charts.

Last night, we had stunning ramp jobs in USDJPY……CL……and, NKD. But, unless they know something that no one else does, the chart that really matters is the EURGBP.  And, as of right now, it’s saying “who knows?” continued for members…

It has neither broken down nor broken out. The ES ran wild overnight, though it’s settling lower as I type this.  Note that its new highs were accomplished via a backtest — not the most sustainable type of rally. Though, NKD has turned it into an art form, gleefully rejoining its ridiculously steep rising white channel on a race to the moon.

What can I say about USDJPY other than it’s not surprise.  The BoJ has more at stake than any other central bank, given its huge equity portfolio.For it’s part, CL is supporting the rally, but hasn’t broken out.  I suspect it’ll be held in reserve for when it’s really needed.A quick look at SPX…Monday, it was rejected at the white/purple channel backtest.  It has spent the last few days going sideways.  Last night’s ramp job has it contemplating the .786 at 2105.53, while the .886 awaits at 2112.53 tomorrow morning — which would also constitute a backtest. UPDATE:  9:53 AM

ES is coming up on a TL of support at the SMA20.  If it can drop through 2088.88, it has a nice shot at dropping to the SMA50 at 2075.81.  If it doesn’t drop through, we should get a nice bounce there.UPDATE:  11:25 AM

SPX has reached the .786 target, climbing up the underside of a broken TL.  It clearly has room to go on up to the .886 at 2112.55, so the sidelines remains a comfortable spot — even though EURGBP is hinting at higher and CL has broken down a bit. UPDATE:  1:44 PM

Will the folks buying on the way up this morning hold overnight, or might we get some profit taking over the next few hours?   If SPX drops through the SMA50 at 2104, there’s a decent shot at reaching the .618 at 2093.74 — also the SMA5 200.  I’d short here with very tight stops on any sustained drop through 2104.  Given that USDJPY and CL are in a position to break out, however, I don’t place high odds on this triggering. UPDATE:  2:32 PM

Looking at CL, it appears TPTB are determined not to let it slip from these prices.  USDJPY and EURGBP are cooperating, which should outweigh a modest CL increase.  But, ultimately, CL would need to gain a lot more to offset the impact of the currency flows.  That idea to short below 2104 is looking iffy… UPDATE:  3:38 PM

We’re down to the final half hour, and nothing much has changed.  SPX is still slipping slightly higher……mostly on CL’s levitation.  USDJPY has gone sideways for the past several hours.  VIX, too. About the only notable development is EURGBP, which has slipped lower to backtest the falling white TL.  Whether or not this is significant should be clearer well after the “market” closes.For those staying up late to trade tonight, I’ll stick with my assessment from yesterday…

Given how binary the situation is, charting is of little help in predicting which direction EURGBP will break.   I believe there is plenty of selling pressure in the markets right now, so would want to be short over the next 36 hours if ES dips below its SMA50 at 2075.52.  It’s clearly been propped up there for the past several days.

GLTA.