Futures are off sharply again this morning as VIX spiked to our 27.67 target a day ahead of schedule.

Remember Run, Don’t Walk to the Nearest Exit?  That post was headlined by RSP, the equal-weighted S&P 500 ETF. It never did break out, but will instead gap lower on the open with a slew of gaps to fill to the downside.

continued for members…This is a TL and its SMA200 that VIX is backtesting. If it should break above it, it could easily reach the top of the falling white channel at about 31.62.

This would allow ES to drop through the white channel backtest… …to backtest the dashed red TL ahead of schedule or even lower. I’m fond of the 3730 level as it’s also the .618 of the latest rally and the major 1.272 Fib extension.Remember, SPX’s support is way down at 3720 and, if that fails, the former high and SMA200 at 3393.A potential party pooper – USDJPY is testing the top of the falling purple channel as we’ve expected it to in a situation such as this. A pop above it to the SMA200 or above could put the brakes on further equity downside. Likewise, the bottom of the TNX channel could provide support as it has many times before.Elsewhere in currencies, EURUSD is sliding again. Though I have little doubt it will reach its SMA200 before long, it could get a bounce at its SMA100 which intersects with a red TL from the March lows.This might act to constrain DXY before it can push above the red TL up at 91.17ish. Gold and silver are again threatening to break down – GC from its SMA200 and SI to its. I think they’ll finally let loose this time. Other charts to watch: will CL and RB finally roll over? We’ll get EIA inventory this morning. UPDATE:  9:45 AM

ES just reached the dashed red TL and doesn’t yet appear to be slowing down.SPX might get some help from its SMA20, but otherwise has another 57 points to go. VIX has little resistance here.

UPDATE:  10:30 AM

EIA reports a sharp drop in inventories – no doubt prompted by the equity sell off that needs no additional momentum at this point.

UPDATE:  11:25 AM

ES’s dashed TL is holding for now. Note that this is actually a bogus TL as it was clearly violated between 10/26-11/3. An intraday dip would be one thing; but, it closed well below the TL and spent 5 sessions below it.  It pales in comparison to the bogus rise to new highs after the rising white channel broke down at that time.  TPTB really prefer to backtest support only after it has risen to an acceptable level. In the case of ES, there are so many options.

As well as the red TL has held up, the yellow channel midline is a more meaningful backtest – but only if they succeed in dragging this out.

Otherwise, we could test the Feb 2020 3397 highs again in a week or so when the SMA200 reaches it. I’m posting these charts just as a reminder of the sheer number of options. These are some of my favorites, but by no means the only options.UPDATE:  2:20 PM

Twice more for luck…  VIX still has room to the upside.

Note that BTC has completed one H&S Pattern and is flirting with completing another.And the purple RSI TL has apparently given up.UPDATE: 3:00 PM

Listening to Powell – not much new here other than he gets that deer in headlights look every time someone asks about Gamestop.

ES is getting closer to our 3730.29  target. Only problem with this, of course, is that it wouldn’t get SPX all the way to its 1.272 backtest.  Something’s gotta give. One will overshoot or the other will undershoot: either ES 3730.29/SPX 3735.84 or SPX 3720.37/ES 3714.50.

UPDATE:  3:35 PMP

ES just reached 3730.50. As discussed above, SPX is still well above support.  Can it get to 3720.37 without taking a shot at the SMA50? Probably not. ES’ is at 3704.45, so wouldn’t be surprised to see SPX’s tagged, then ES’ tagged after hours.And, if ES is getting that close, wouldn’t it just go ahead and tag its red .618 at 3697.75? I think so.