SPX slightly overshot (1.38 pts) our initial downside target yesterday before VIX was reigned back in, prompting an halting recovery for the remainder of the session.

With futures currently off 12 points, yesterday’s lows are going to be tested again — with an excellent chance of tagging our next downside target unless USDJPY bounces strongly off our target at 109.457.continued for members…

ES: a long way to go until it reaches support.VIX remains in position to spoil things for the bears, with the rising white channel still intact. CL has given up on nuance and has blasted through its SMA200 in an effort to stem the tide.

UPDATE:  9:47 AM

So far, so good.  Remember, the 2440.81 target is even more appealing than the 2451.51 one. VIX has broken out and USDJPY is still trying to find its bottom.  CL has broken off its threat to make new highs. UPDATE:  10:09 AM

USDJPY just capitulated and tested the .886, allowing SPX to reach 2451.51.  I’d take profits here and play a probable bounce (2460?) — but, be ready to reshort with any weakness.  The SMA50 and 1.618 are both better targets IMO. UPDATE:  10:45 AM

The bounce has exceeded the SMA5 10, so the SMA5 20 is the next most likely upside target.  Again, 2460ish looks good.  With USDJPY at support, and CL getting a bounce, I suspect CL will ultimately reverse its bounce and drop to 24.04-48.16 to lead SPX lower — if it’s going to take a stab a 2451.51.  There’s certainly no requirement — just makes sense to me.  Note that VIX has pushed above its Jun 29 highs — when ES was 55 points lower than it is currently.

I believe you could short any place in between here and 2460 and be okay, but definitely re-short on any drop through this morning’s lows with a speed bump (at least) at 2446.26 and the ultimate goal of 2440.81.  If it drops through 2440, the next support levels are way down at 2421.56, 2409.39 and 2335.34. As I mentioned yesterday evening, I am on the road today coping with a relative who unexpectedly required hospitalization.  I’m going to take off for a few hours, and will be back asap.

GLTA.

UPDATE:  16:50

That turned out reasonably well.  SPX overshot by a couple of points, leaving us with the question of whether or not it’s done.Note that SPX’s rising red channel is mostly intact (it would look better if it had stopped at 2440.81.)  Clearly, this is critically important support for bulls.  It might just require actual fighting in NK for it to break down.  You could say that about VIX, too.  It’s very close to critically important overhead resistance.

USDJPY overshot a little, which explains the SPX overshoot.While, CL undershot. If I had to guess, I’d say SPX will recover from here.  But, we’re dealing with a dangerous crackpot who, in addition to blurting out whatever incendiary thought pops into his head, could very well act on a whim and start a major war.  Then, there’s Kim Jong-un…

I’ll post more later tonight if I get the chance.