Yesterday’s rally was overdone, leaving SPX at the top of a sharply rising channel. The culprit was VIX, which has collapsed (again) and fixed the algos on an unsustainably frenetic pace.

continued for members…

The picture for SPX is more clear – at least an interim top at around 4800. This yellow channel top is the same one…

…as has guided stocks higher since 2009.This means our other factors – currencies and oil/gas – are now probably finished rallying for the year. There’s simply no need for them to do any more at this time and, in the case of oil/gas, they’re doing more harm than good.

Note that NG has closed its gap and completed every backtest and is thus very vulnerable to a big drop with any decline through its SMA200.USDJPY can save its rally to the white channel top for another day. There’s absolutely no need for a breakout. Likewise, the EURUSD should be able to put in that next leg lower to the .786. And DXY should finish off the backtest.This also means more headwinds for SI and GC, which have been making noises about breaking out – much less likely now.Of the two, SI looks the more vulnerable at this time. And, BTC is at an important juncture: having bounced nicely on the channel midline and SMA200, followed by a bullish 10/20 cross. It was due a backtest of the SMA10/20, which we just got. At this point, it’s critical that it hold these and the SMA200. A failure, which I believe is more likely than not, could see it plunge to 37,245 or 33,205.