ES assiduously followed a well-defined falling channel ever since the top in March – with the exception of last week’s breakout. As we pointed out, that breakout was a head fake. ES not only reentered the channel in Friday’s meltdown, but came very close to breaking down below it in the after-hours.

If it can remain in the channel, our next downside target is looking very good.  If not, we’ll get there a lot faster than expected.

continued for members…

VIX has popped above the falling purple TL which has marked previous lows and the rising white channel midline. But, it still has a long way to go.

Currencies are letting loose this morning, with DXY finally tagging our 101.409 target as EURUSD breaks down. If 101.409 holds, the next stop should be 106.276 – meaning EURUSD has probably reached par.Gold and silver are also getting slammed and nearing our downside targets. And BTC is getting very close to the yellow channel bottom. We’ll call it 37,300.CL and RB are getting hammered on Beijing shutdown fears… …which is helping the 10Y back away from its .886 and pursue that red channel backtest we’ve expected.