pebblewriter

USDJPY’s Game of Chicken

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It seems hard to believe that S&P futures are up at all, given that CL has dropped like a rock.  But, USDJPY continues to hint at a breakout, which is enough to make the algos quiver with anticipation.2016-07-20 USDJPY 60 0609Is the BoJ ready to go all the way, or is this another head fake as in late May?

continued for members…

Yesterday’s miniscule sell-off was a good start, but doesn’t really count as a retracement.

2016-07-20 SPX 60 0615ES is up 5 pts just ahead of the open…

2016-07-20 ES 60 0615…entirely on DX’s breakout, which has reached a key .618 Fib…2016-07-20 DX daily 0615 …and, of course, USDJPY’s — which has more than offset CL’s weakness.2016-07-20 CL 60 0615I’d short here at the open, in anticipation of a fallback in DX.2016-07-20 SPX 5 0630UPDATE:  9:37 AM

ES has given up almost all its gains, but could find support at the white neckline at 2159ish.2016-07-20 ES 5 0637We’ll watch to see if USDJPY has more juice left, or was merely holding prices up overnight.2016-07-20 USDJPy 5 06372016-07-20 DX 5 0637UPDATE: 9:45 AM

Note that VIX gapped down this morning to new lows not seen since Aug 5, 2015.2016-07-20 VIX 5 0645  It’s effect is impressive, but also a warning sign for bulls.  Every previous low resulted in an equity sell off — not necessarily immediately, but within days.2016-07-20 VIX daily 0645UPDATE:  10:13AM

CL and USDJPY are working in concert to preserve this morning’s gains.  I’d dump the short here and move to the sidelines.2016-07-20 ES 5 0745 2016-07-20 USDJPY 5 0714 2016-07-20 CL 5 0713 2016-07-20 SPX 5 0712Note that EIA crude oil inventories data is due to be released at 10:30 ET.  If CL is rejected at the SMA200, I’d want to be short again.

UPDATE:  10:28 AM

CL is reversing lower after briefly topping the SMA200.  Time to get short again.  Though, tight stops are advised in case this is a head fake.2016-07-20 CL 5 0728 2016-07-20 SPX 5 0728UPDATE:  10:33 AM

It was a head fake.  CL declined sharply at first, but is regaining its momentum as I type this.  Going long here with tight trailing stops.  VIX is still problematic, and USDJPY is showing no interest in actually breaking out.2016-07-20 CL 5 07322016-07-20 USDJPY 5 0739 2016-07-20 SPX 5 0732UPDATE:  11:10 AM

It’s not much of a move, but it could be over right about here as USDJPY has reached the 106.80 target and CL has reached the white channel midline.  ES made a new high (by 0.25), which was probably the objective.  Back to short, with an objective of 2163 in order to close this morning’s gap.  I’d keep stops tight, as CL might be aiming for the red .618 at 45.97, which would drag SPX higher.2016-07-20 SPX 5 08092016-07-20 USDJPY 5 0811 2016-07-20 CL 5 0811UPDATE:  3:15 PM

Quick update…  CL rallied to the .618, but is falling back.  2016-07-20 CL 5 1215VIX is slowly regaining its earlier losses — maybe a gap close?2016-07-20 VIX 5 1215SPX has traced out a flag pattern, and is slowly giving up its gains.2016-07-20 SPX 5 1215DX has reversed at the .618, and has put in two lower highs since the overnight push.2016-07-20 DX 5 1215USDJPY is the only bullish looking indicator, with a breakout above Brexit highs and the falling red channel top.  However, this will likely pass as soon as the “market” closes.2016-07-20 USDJPY 5 1217 Bottom line, things are set up for a continuing sell-off into the close.  USDJPY and/or CL could still ruin things with a dramatic spike higher.  But, I don’t see that happening just yet.

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