Though it is getting a little monotonous, I’ll never get tired of saying that we’re about to tag our next downside target.
The past two weeks of downside have been a great recruiting tool for chart patterns and this website in particular.
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continued for members…
ES’ SMA200 looks like a lock. The question is whether it’ll wait for the falling channel or the channel will break down. 
The SPX equivalent isn’t quite as well defined, but the SMA200 also looks like a lock at this point. The initial target is the .618/.236 at 2810.75 – a little lower than ES’ .618 at2816.17.
VIX hasn’t moved anywhere near as much as it should have — still under central control.
The dollar is under major pressure, particularly against the yen — but, the euro is playing along.
And, oil and gas have bounced nicely, but maybe just enough to facilitate a test of the midline where it intersects the SMA200 at 60.73. A drop at this logical turning point would be fuel to the fire of the equity meltdown.
The bond market is still in bear mode. The 10Y is responding to equity fear, slipping toward our targets. While the 2Y is falling faster than the 10Y – expanding the 2s10s which just backtested its breakout. All recent equity corrections have featured this same move.
UPDATE: 10:06 AM
ES just reached its .618, then slipped a little past it in order to allow SPX a shot at its .618. We should get a bounce here. If not, and the falling channel breaks down, it’s a big 40-pt drop to the SMA200. It’s not at all unusual for falling channels to break down and expand when things start getting crazy like this. So, it you play a bounce, be very careful to watch your stops.
Note that AAPL has broken down below its SMA200. This is a game changer for the stock.
UPDATE: 2:12 PM
Slight divergence between SPX and ES…SPX dipped slightly below its channel bottom and .618, while ES dipped well below both of its — and still is. If it can climb back on top, it could bounce for a couple of days and delay the SMa200 tag until Wednesday.
Otherwise, the falling white channel will have broken down and the SMA200s will be tagged. It would represent a drop of over 100 points – sure to generate plenty of alarm.
CL has reached the revised target posted earlier this morning. It still needs to tag the channel midline, which is why I pushed it out till Thursday. While it has reached the right price level, it hasn’t reached the right chart feature. So, don’t be surprised if it pushes below its SMA200 again — which would alarm equities.