ES sold through our next downside target in reaction to the new B.1.1.529 COVID-19 variant.

A number of factors have also hit downside targets, making this plunge on a normally quiet day a selloff of interest. Our targets in equities, currencies and commodities remain unchanged.

continued for members…

The equity picture… We’ve had this 31.50 target on VIX for months. I see no reason to change it now. CL’s near backtest of the channel top has turned into a hard test, with the .618/SMA200 looking fairly likely. I had expected it to wait for the two to converge nearer the channel top, but at  -7% already, it might not wait at all. Certainly central banks will be egging on this correction – now at 15% from the recent highs. RB just reached our next downside target at the bottom of the flag pattern, 16.4% from the top.  This is important support, as it is also trading below its SMA200. Daring traders might try playing a bounce here. But, given the interest in knocking inflation back, there’s a real risk of it breaking down.On the currency front, USDJPY has rolled over again and shows renewed momentum for one or both of our backtest targets at 112.41 and 111.60. EURUSD is seeing a bounce, an effort to slow the dollars roll.It’s almost reached our primary backtest target. Gold got an initial bounce above its SMA200, but is still at risk of a breakdown of the red TL from Aug 9. I would be wary of playing this bounce. SI has no such support and is therefore more vulnerable at this point.And, BTC just tagged our SMA100 and cloud bottom target, reaching 53,524 – a 22% drop from its 69,000 highs on Nov 10.  If it doesn’t bounce here, the next significant support is the SMA200 currently at 45,998. Bonds haven’t reacted much yet, but TNX is almost back down to the bottom of the flag pattern – key support going back to early July. UPDATE: EOD

Almost made it to the next downside target…

CL reached 67.41 before closing slightly higher at 68.17 – a drop of 20.2% from its Oct 25 highs. More on this in an upcoming post. USDJPY found support at its SMA50 – not quite the backtest we were looking for but a potential bounce spot anyway.VIX reached the same level as on May 12 and Sep 20., so it could reverse here (triple top.) The more likely scenario is a backtest up at 32.50 as indicated on the chart. And the 10Y is threatening a breakdown. Bottom line, things are looking good for the bears, though not without risk.