To everything (turn, turn, turn)
There is a season (turn, turn, turn)
And a time to every purpose, under heaven

The dollar’s dip has been a headwind for the markets, but it’s served a purpose: resetting various carry trades and putting things on firmer footing for the next stage.  I don’t know whether central bankers will be able to pull it off.  I don’t even know how they’ll attempt it (though I have some suspicions.)

I only know that EURUSD’s reversal at our 1.1470 target from Jun 13 [see: The Rally That VIX Built] is quite important.  And, if DXY should slip below its recent lows, equities are not going to take it well.

continued for members…

Note that CL reversed at the bottom of our rising white channel, probably representing support.VIX is settling back down to Earth, but is still hovering above the yellow channel bottom.DXY should be dipping quite a bit with the euro’s strength……but, the JPY is still keeping it afloat.With EURUSD having a little further to go, the stage is set for SPX to backtest the red TL.UPDATE: 10:01 AM

There’s the SMA5 100 and white channel top.  I’d look to short here at 2419 with tight stops for 2400-2403.UPDATE:  10:40 AM

The question came up below about CL’s rising white channel breaking down.  The reason I left some wiggle room in the assessment this morning is that our mid-range forecast of 49.82 is a finish line rather than a road map.  The June CPI print will be dismal.  If the Fed is looking for excuses not to raise rates, it’ll have one.

If so, they’ll want July to come in flat.  I’ve highlighted the monthly range to give you an idea what “flat” would mean in terms of oil prices – clearly not a runaway rally as we had the past week.  That’s why I continued to repeat the observation, last week, that oil was ahead of itself.

Bottom line, 42.05 was a solid bottom.  The white channel was a  decent stab at the initial trajectory.  It was broken out of, and has now broken back down.  Hopefully, CL will establish a more clearly defined rising channel in the next week or so that will provide better daily range info.

UPDATE:  11:15 AM

It appears they’re going to stretch this out — possibly until Monday. It looks like the falling white channel will be expanded to fit Wednesday’s highs, which would allow a tag of the SMA5 200 either later today or Monday.  The key, for bears, will be remaining below the red neckline at 2421.  While, bulls would like nothing more than to ditch the H&S all together.

Nothing wrong with holding short, as I believe it’ll pay off to 2400-2403.  But, the odds of it happening today are declining rapidly.  And, reaching it might end up involving holding short over a weekend with the attendant gap risk.

The cautious approach would be to dump the short and wait to see how it plays out after reaching the SMA5 200.  Same as it ever was…

UPDATE:  11:45 AM

Here’s the SMA5 200 and expanded white channel top.  Good entry for a short for those with the patience to let it play out.  Tight stops are a good idea. *  *  *

Apparently, pebblereaders are a curious bunch.  I’ve had several questions about yesterday’s “emergency.”  My wife, who is normally much smarter and wiser than I, walked into (not through) a sliding glass door.

While she emerged unscathed, the door shattered into several jagged, jugular-hunting pieces (old glass, not tempered or laminated) that threatened life and limb of every living thing within 5 miles.  The door had to be removed and transported to the local glass house for repair. My wife’s bruised ego also required a bit of work.

Fortunately, the world was saved and no lives were lost in the process.  The door is due back shortly, so I’ll need to sign off at that time in order to supervise (offer useless suggestions while experts do the actual work.)

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