A new week, a new breakout in the after-hours for no particular reason.
And, just when the ramp job started to waver, a 5.6% smackdown on VIX – no news, just a reminder not to focus on the pandemic, the millions out of work, our dysfunctional Congress, the coming election battle, Trump’s tax troubles, etc.
Why? Because they can.
continued for members…Remember, VIX closed right at channel bottom support on Friday. So, any meaningful drop from here would be very positive for stocks.
The net effect of the weekend ramp job, though, is that ES has broken out of its falling channel without having first tagged its SMA100.
As we discussed last week, this allows it to remain in its rising white channel from the March lows, even as SPX’s rising white channel has broken down. 
This could mean a new channel for ES/SPX as suggested by the red channel sketched in below. It could also mean a breakout and backtest at a lower low – the net effect being a delay in tagging those lower targets.
Of course, it could also mean a whiff at the SMA100 and much more upside inspiring algo action to come over the next month. 
The algo factors are, in general, looking fairly bearish. While it’s not too hard to imagine the Saudis prop up oil prices (note CL’s bullish 10/20 cross) for the next month to help out Trump…
…we can’t necessarily expect the same from the BoJ and ECB. The USDJPY and DXY are reversing as expected after a nice backtest, but EURUSD is bouncing.
This bounce would be more convincing if currency pairs were participating.
Note that it is producing a decent bounce for GC and SI without either having quite tagged (though very close) their SMA100 support.
The other noticeable whiff, of course, was the Dow.
And, even though it’s quite small, TNX has clearly broken down. The charts indicate much lower rates in the weeks ahead with the days around the election being of particular interest.
Indications are this is a ramp job that should be faded, but which could involve plenty of head fakes. Keep an eye on whether VIX breaks down or USDJPY breaks out.
More later.
UPDATE: 3:50 PM
VIX just finally turned negative on the day, suggesting to SPX that it hold its SMA50. It shouldn’t. Neither should ES.
VIX is only slightly negative, could still bounce back by its close.
CL is at TL resistance – nice little triangle. 
RB also at resistance, but note that it’s now above its SMA200. 
USDJPY regained more than half its earlier losses. Still not looking good, but you never know with the BoJ. 
They’ve been trying to keep the NKD above the .886 Fib ever since June 5. 
Gold and silver have responded nicely to DXY’s reversal, with SI regaining its former lows – arguing for more upside for EW fans. It’s still early, but this is a good first step for the metals.
