ES’ latest rising channel broke down rather decisively on Friday.  ES closed well below its SMA10 and almost tagged its SMA20 — a feat it hasn’t accomplished since Nov 20.This morning, the futures have pushed back above the SMA10, hinting at a full recovery.  Yet, as we’ve discussed, there are several factors that might prove problematic for the bulls.

First and foremost, it’s a New Year.  With a 20% gain in the bag for 2017, might we see stocks at least pause to catch their breath?  If nothing else, it might alleviate some of the incredulity surrounding 2017’s record-breaking ascent.

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RB remains elevated beyond the level at which it can turn in acceptable CPI numbers.And, DXY continues to slump toward our .886 target.  What if it can’t hold, and continues on toward our next lower target at 88.453?The first target lines up nicely with USDJPY’s SMA200 at 111.638, while the latter could easily get USDJPY to 109.99 or lower. For now, SPX is clinging to its SMA10. VIX, which is dropping like a rock after failing to retake its SMA200, is propping it up nicely.   If (as I suspect it will) SPX’s SMA10 falls, the next support isn’t until 2664 — a whopping 1% drop from its recent highs.Now, let’s talk about the important moves.

EURUSD has broken out of the falling white channel.  At the very least, this delays (and possibly busts) the SMA200 tag that might have occurred in the next few days at 1.1495.Recall that we have an upside target at 1.2404 that comes into play if EURUSD can push through the red channel’s .786 line.The other potentially important move is in CL – which made new highs on the unrest in Iran.  It appears to be a breakout of the rising purple channel.  But, I have my doubts — particularly since it has yet to break the red TL.Taking a step back, we can see that CL’s current pricing is less problematic than it was in December or (especially) November.