by Pebblewriter, Pebblewriter.com
SPX hit our purple target yesterday, bounced to the first level of resistance at the SMA50, and continued toward the red target. The purple target was first suggested on Mar 4:
If the H&S should play out, it would target around 2060 – which is coincidentally (or not!) the SMA50 and might allow a backtest of the broken falling gray channel.
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We added the red target on Mar 6 [see:Â Is Good News Good?]
The white dot (2062-2066) would suffice, but an actual tag would be down around the purple dot at 2057. If that should fail, then the red dot at the white .618/SMA100 intersection (2033ish) makes a great deal of sense.
BTW, the white channel below is new, having been placed there to illustrate the proportion of the latest decline relative to the previous. It’s a lame placement, but one that bulls might just latch on to (we know, never end a sentence with a preposition; but, doesn’t “a placement onto which bulls might just latch” sound silly?)
The futures are up about 5 points overnight due to the usual USDJPY antics. Here, too, I’ve inserted a new channel. The white one we’ve been using offered a well-defined top and midline and a messy bottom.
The purple one we’ve inserted is a bad fit, but one that the bulls will pray is legitimate. The way the BOJ sees it, any chart pattern is fine as long as it targets the moon.
The euromess continues to have everyone on edge. The genius of Mario Draghi is that he trashed the euro and took interest rates below zero without having to do much besides flapping his gums.
The idiocy of Mario Draghi is that the euro and eurozone interest rates have sunk so low, no one knows whether or how they’re going to stabilize now that QE has finally begun.
The global markets have risen to stratospheric heights on the back of dollar strength and yen/euro weakness, plain and simple. We’ll take a fresh look at the current state of the carry trade in the next few days. But, even the White House admits that dollar strength is becoming a fundamental problem.
