It’s those changes in latitudes,
changes in attitudes nothing remains quite the same.
With all of our running and all of our cunning,
If we couldn’t laugh, we would all go insane.
~Jimmy Buffett

As expected, yesterday’s Fed minutes disappointed and the market was none too pleased. Turns out the Fed isn’t quite as optimistic as the market; or, maybe they just feel like they’ve done enough in driving stocks back to their February highs.

ES came within a few points of our initial downside target before beginning its obligatory bounce.

With initial and continuing jobless claims coming in higher than expected and Philadelphia Fed coming in below expectations, the futures are under additional pressure and should test important support.

Should that support fail, our six-month forecast becomes more ominous.

continued for members…The bigger picture…

…and the SPX version: Note that SPX’s rising white channel doesn’t afford the same downside as ES’.  It won’t matter unless we test the bottom in the next week or so, but it makes a big difference.

VIX had no trouble reaching our initial upside target, and went on to test the next higher TL. Next up, if it can break 25: the SMA50/200 intersection at 27.66.

Oil and gas are also giving up quite a bit of ground this morning, breaking down their latest trendlines. Look for both to at least test their SMA20s. And, on the currency front, we’re seeing EURUSD drop back through its breakout level at 1.19.  If it drops through 1.18, there’s plenty more downside with the rising white channel bottom currently at 1.1595.

USDJPY is going sideways this morning… …meaning DXY’s bounce is extending modestly after the red TL bounce. Gold is reacting to DXY’s strength, dropping back to its 1923 former high which it already tested once.10Y yields are under additional pressure in keeping with our outlook… …putting the 2s10s back at the support of the white TL. Remember, a breakdown is negative for equities. A breakout is VERY negative. Day 3 of ThinkorSwim’s charting issues…

UPDATE:  1:55 PM

Not exactly a surprise…

UPDATE:  4:00 PM

FWIW, ES and SPX closed exactly where they’d need to in order to consider today’s bounce to be backtests. Keep in mind that tomorrow is OPEX, so it’s not terribly unusual to see a backtest rally at this point. You could say the same about VIX, which backtested its SMA10……and CL, which backtested its broken TL.In other words – nothing to convince me that yesterday’s decline won’t see some follow through – if not tomorrow, then next week.