Will we finally get a backtest of the neckline?  With futures currently off 18 points, it’s certainly looking that way.

continued for members…

A quick look around the horn.  I’ll be back with commentary after the open.The biggest developments…VIX is bouncing despite not yet reaching its SMA200.And, the dollar is seemingly breaking out.

This is courtesy of the EURUSD……and despite the weakness of the USDJPY.  Too early to say whether it will hold.

It’s significant that SPX and DJIA both pushed slightly back above their 2017 closing values.  Note that a backtest of the neckline would now mean a breakdown of SPX’s rising white channel and would likely establish the purple channel with a test of its midline.

Keep an eye on SPX at 2645.06 – the level at which it closes a gap from Jan 17.Oil and gas are taking a bit of a pause.  If RB  can hold its white channel bottom, it stands to tag 1.4796, followed by 1.58ish. But, any tip below the yellow channel bottom puts the onus on bulls.  A drop through the white channel bottom would confirm that our 1.32 target is still in play.AAPL continues to melt up, likely the result of the buyback program being back in action.

Gold has completed the backtest of the white channel it broke out of. And, TNX is showing weakness after an apparent breakout. UPDATE:  11:20 AM

CL has reached support at its SMA10, with RB down about the same percentage but below its SMA10. It seems likely to test 1.32 as discussed above. Along with VIX’s bounce……and USDJPY’s lack of a bounce… …this has enabled ES/SPX to complete about half the neckline backtest moves. There’s the possibility that SPX will complete its backtest today and rebound back into the rising channel — the most bullish possible move.  This would probably require that VIX backtest the rising white channel up around 21 or that CL/Rb break down.

I don’t think TPTB necessarily want CL/RB to break down. A drop through CL’s SMA10 might unleash a sizeable drop.  USDJPY would be the more likely candidate.

The less bullish move would obviously be for SPX’s rising white channel to break down and for the move to 2620 to complete tomorrow.  This would require less accommodation by VIX. RB/CL and USDJPY. A simple failure to bounce would probably do the trick.

I’m going to run out for a quick lunch, should be back around 1pm.

UPDATE:  2:50 PM

That’s a tag for SPX and a channel tag for ES – not to mention the VIX backtest (ideally 21, but pretty close.)  Should see a reversal here.  But, if not, then the SMA10 is just below at 2601.76.  Note also that tomorrow’s SMA10 for SPX should be around 2609 and 2608 for ES.

So, while this would be a good candidate for a bounce, the support is a little iffy.  Traders might wish to play the bounce, but be ready to reshort if it drops below. I have to run out for an appointment.  But, I’ll post my thoughts on the close later this evening.  GLTA.

UPDATE:  8:50 PM

Nice bounce off the neckline into the close, recouping about 15 points off the lows.  Tomorrow morning’s SMA10 will be 2610.09, so there’s still a chance of a lower low.  For now, the purple channel looks like the better fit.  But, of course, we’ve seen many instances of broken channels being rejoined.  Bottom line, this remains a less than stellar setup. Note that VIX retreated only slightly from the 21.15 highs, closing at 20.80.

ES has piled a few more points on since the close…

…mostly thanks to CL and USDJPY.