Futures are off moderately following an algo-driven meltup in July that shook the bears and reset sentiment.

continued for members…

The first order of business will be dropping back below the SMA15 200 at 4095. After that, there is no shortage of support which must be broken before we can talk about lower lows.

But, that’s where the charts indicate the market should be headed, with the purple TL from 2018-2019 coming into play… …at the same level as our analog initially indicated.For SPX, that means getting back below 4070ish. The VIX “breakdown” was a real ball buster for bears as the algos lapped up the uber bullish signal. The yen is taking the lead this morning, dropping through support as expected.But, the relative dollar weakness is spilling over into the EURUSD. GC and SI have reached more potentially weighty resistance. And, BTC continues to inch lower, lending credence to the continuation flag pattern.

Oil and gas are both off sharply in keeping with our forecast.

Which continues to chip away at TNX.

Bottom line, this morning’s action could be nothing more than a little backfilling. But, keep an eye on VIX. If the constant pounding it’s received over the past several weeks lets up, then the downside targets start to look a little less farfetched.

GLTA.