Futures are backtesting the 10-day SMA this morning in the wake of the first two day decline since March.

Look for more to come.

continued for members…

As we discussed last week, ES and SPX have both reached channel top resistance and are very much past due for a backtest of the 3.618 Fib – with potentially lower targets in mind. The little falling red channel for ES points to 3997 between now and the end of the month. Note this would also be the white channel midline.

As we’ve discussed many times, SPX’s 3.618 is further away – setting up a tricky situation where one must take precedence over the other. VIX certainly supports the notion of lower stocks prices – though traders should be aware of the falling white channel .786 line where it intersects with the .886 Fib at 19.86.

The chart to pay special attention to is USDJPY, which is testing important TL support.

Remember what happened the last time USDJPY’s breakout of the falling purple channel failed.

I’m still looking for NKD’s reversal to result in a backtest of the red 1.272 or the yellow 1.618 extension.

Elsewhere in currencies…

And, the wait continues to see whether we’ll get the rest of the drop in CL/RB we’ve been expecting. More later…