Yesterday got us most of the way to our next downside targets.  If our monkey bones are to be believed, though, we have a little further to fall before tagging the 200-day moving averages.

And, that’s when things could get really interesting.  The bulls would like nothing more than a clean and jerk at SPX 2608 and DJIA 23660 — a mere 1% below yesterday’s close.  But, COMP is still 2.7% away from its SMA200 at 6819.

So, either we’re in for another few days of floundering — while COMP’s SMA200 gradually works its way higher, to a level that doesn’t punish SPX.  Or, we could see investors panic when SPX drops through its important support.  And, we all know what that looks like.

Our targets haven’t changed one bit since last week.  So, grab some popcorn and enjoy the show.  The good part should come around 10:30, when EIA inventory data is released.

continued for members…

FWIW, RB and CL have both broken trend.  And, yesterday’s API data was disappointing.  Gotta wonder if Trump, who has deemed OPEC’s price raising unacceptable, might have sent a tweet to the EIA.COMP, ready to rumble?

SPX’s less dramatic scenario, with the SMA200 and the 2565 (equivalent of COMP’s SMA200) targets.In the more dramatic one, note that the C=A target of 2461.72 and the flag pattern target of 2469.39 are essentially right there, together with at the 1.272 extension at 2459.46.VIX should at least test the yellow channel top (20.24ish).  If SPX’s SMA200 lets loose, look for a breakout.USDJPY should also play an important role today.  It is pushing above its SMA100 with potential to its SMA200.  A reversal back below the SMA100 would help get stocks lower, as would a sharp reversal at the SMA200.

A backtest of the broken white channel would take it up past the SMA200 — certain to give stocks a boost.  I’d keep a close eye on it, particularly as SPX and COMP approach their pivots.UPDATE:  10:30 AM

EIA data is out – a 2.2MM barrel build vs 2.2 draw expected.  CL and Rb are selling off. COMP has bounced a bit, perhaps on AMZN’s arrival at initial support.  Yet, AMZN, FB, AAPL and GOOGL could all potentially fall further. UPDATE:  11:40 AM

So far, RB and CL have held their SMA10s, USDJPY hasn’t backed off its intraday rally, and VIX hasn’t pushed the limits of the yellow channel — in other words, no strong push from the algos. AMZN even bounced at our initial target.In other words, the algos have seen nothing to get nervous about just yet.  I suspect the trigger will be when CL and RB drop through their SMA10s and head for our downside targets (at the very least, I’ve been early on that call.)

Bottom line, I suspect things are about to break loose.  Gold has strong support here, meaning DXY could be ready to reverse, meaning TNX might be ready for a (fear-induced) plunge.  ZN, which is awfully close to our downside target, supports this view. And, note that 10s2s is flattening again after backtesting the recent lows.UPDATE:  3:50 PM

Whole lot of nothing after the initial plunge.  All indices are back to where they started, which might mean my forecast is just plain awful — or, maybe TPTB are positioning for a follow through tomorrow.  With AMZN and GOOGL closed half the day, CL and RB obviously being propped up, DB due to report tomorrow, and TNX due for a tumble, my gut tells me tomorrow will be a very tough day for stocks.