Backtest Successful…For Now

ES and SPX safely tagged their backtest targets yesterday, scampering back to safety by the close.  Around 2:40AM, however, ES’ channel looked to be in trouble again.  ES even dropped through its SMA5 200 – a no-no in any meltup scenario.

As luck (not!) would have it, someone in the administration (not Trump, we know he never watches the markets) was watching the markets at 4AM and slipped a note to Bloomberg that trade talks were going well.  The yellow arrow marks the spot. All the stops have been pulled out: VIX is back below its SMA200, CL is back above its SMA200, and USDJPY got a bounce off its SMA50.  And, just like that, all is well again.  For now.

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