We’ve seen another overnight meltup – the 7th in a row… …as VIX continues to be hammered in the after-hours……more than offsetting the losses in oil, which was kind enough to wait until after the close to break trend……and the ongoing leakage in USDJPY.

This means another busted H&S Pattern – the 4th in the past week – and higher highs in SPX and ES. The bigger themes continue to be a yield curve completely under Fed control and ceaseless pronouncements of “reopening” the country, which boil down to how many deaths are acceptable.

None of that will be reflected in the daily market data, which will simply reflect a continuing rally in the face of the worst economic outlook since the Great Depression.

continued for members…

ES and SPX’s rising channels remain intact. The odds of a neckline backtest have dwindled to close to zero as a drop that low would breach the channel.  To put it another way, a drop to 2600 would suggest additional downside, potentially a test of the Mar 23 lows.

The currency picture continues to be weak, though it doesn’t really matter when VIX plunges 15% from yesterday’s highs.

The EURUSD continues to meander and is essentially meaningless…

…other than the effect it has on the DXY index which is slumping……in the midst of continuing yen strengthening.

While DXY’s decline has been modest, gold’s rally continues to impress. Earlier, it came within 2.1% of our next upside target – obviously well ahead of what the rising white channel would indicate.I’m adjusting the downside target for CL from 20 to 20.39 – the .886 retracement and channel bottom.RB continues its pattern of ramping in the hours before the open and is pushing .74 again. Although it got its bullish SMA10/SMA20 cross, I don’t anticipate a breakout and remain bearish below .75. If it climbs that high again, I’d be happy to short with reasonable stops.As mentioned above, the yield curve remains under total Fed control with the 2s10s limited to 50-53 bps.

If the job of USDJPY and CL is to rally intraday and the job of VIX is to crater every night, the job of the 2s10s is to remain in this range in order to plunge back below the white TL in the event of equity weakness.

So, what might bring that on?  The remainder of the week should be interesting, as we kick off some critical economic data for March.I just heard Jim Cramer talking about the March crash say that “we lost control of the market.” I can’t think of a better expression for describing the crash, with the obvious implication that the subsequent rally has relied on resuming control.

more later…

UPDATE:  11:49 AM

CL is coming up on its .886 as ES reacts at its channel midline and VIX gets a bounce.

UPDATE:  2:30 PM

CL just reached the 20.39 Fib and continued lower to 19.95. By all means, ride it out. But, be prepared to take profits on any bounce that returns it to or above 20.39.

Odds are that CL will bounce, as it has a chance here to complete a less aggressive channel – an example of channel tilting that we often talk about.

ES is testing the white channel midine again.

UPDATE:  3:52 PM

Going into the close:

CL has bounced nicely……as ES claws its way higher along the midline… …prodded by VIX’s ongoing beatdown.We rarely look at COMP any more, as it’s so warped.  Note that today’s gap open allowed it to jump right over the white midline, the white .382 and, drumroll please, its SMA200.  Not many coincidences in markets these days folks. Next theoretical resistance is the purple .618 at 8613.32.The Dow’s midline is still overhead, as is its .618.  Today, however, it leapfrogged its 2.24 extension at 23781.  This used to be an important Fib level.  SPX is coming up on its own .618 — assuming it closes above its .500.  GLTA.