While direction and price targets are going well, timing continues to be a bit of a challenge — primarily due to equities’ hypersensitivity to VIX. VIX reached our initial 25.65 target on Friday, at least a day early.
SPX’s meltdown and recovery also came early, meaning today’s sell off could extend beyond what the futures currently indicate unless VIX backs off last week’s highs.
continued for members…ES’ channel is very well formed – with excellent tags on the top, bottom and midline.
SPX’s is a little harder to gauge. It slightly exceeded our price target on Thursday and Friday. It wouldn’t surprise me to see another intraday dip either today or tomorrow. But, in the end, it’s more important that it holds the white channel bottom – currently at 2678ish. That’s why I put the Day 16 target at that level.
If we match up the ES highs with SPX, the gray channel looks like a better fit — especially on the 60-min chart. But, that would mean a potential drop to the .236 at 2612.97 — well below the white channel bottom. I haven’t felt like it was that likely, as giving up the white channel would be risky.
VIX’s daily chart makes a little more sense than the 60-min IMO.
CL has made some progress toward price levels that would change the CPI narrative. But, it continues to bounce along on the purple channel top — thus maintaining the “breakout.” If another leg down is still in play, then I’d expect CL to play along with a drop through 60.39. If not, then look for it to potentially break out.
UPDATE: 2:40 PM
SPX is testing its SMA10. If it doesn’t pop through, then we should get a sharp drop later today or tomorrow. Otherwise, next resistance is around 2740 on the way to our upside targets.
Traders should keep a very close eye on VIX. Since SPX first reached its SMA10 over 90 minutes ago, it has done nothing to facilitate a break out.
Interest rates continue to work against the analog — with a failure to break down or break out allowing DXY to remain in a sweet spot.
