We’ve seen countless overnight rallies over the past month. Some of them carried over into the regular sessions, but most of them were faded.

Yesterday’s plunge took SPX all the way to a key channel midline and Fib retracement and was followed by a 50-pt overnight ramp job, leaving ES at a key overhead resistance. With a Fed meeting coming up next week and a shutdown (potentially) averted, does this bounce have legs?continued for members…

ES has run up to the falling red TL yet again. But, will it continue to hold? Anyone’s guess.

This is the midline that could matter: the yellow channel that goes all the way back to the GFC.

If it breaks down, there’s much more pain to come. The bottom is currently at 4400. This bounce should easily reach 5600, where it will run into overhead resistance.VIX suggests this bounce could have legs- – but note that VX has yet to break below horizontal support at 22.70ish. An equity breakout would require that VX break down.
The currency picture is supportive of stocks…to a point. While EURUSD is remaining somewhat firm, USDJPY has declined to push above its SMA20 since Jan 16, let alone backtest its SMA200. DXY continues to languish below its SMA200.

CL and RB continue to go sideways.

But, TNX continues to firm up. Could the 10Y be under selling pressure from folks around the world who, disenchanted by Trumpian chaos, simply don’t want to be long US treasuries? We’ve seen how falling equity prices can result in lower yields. The TNX chart continues to show a clear path to 3.5%.

continuing…