ES managed to hold those higher lows yesterday, bouncing 46 points from its 4am daily low. Both SPX and ES managed to close well above their SMA10s again.
The usual factors were at play. At one point, VIX was off by 18.4%. But, the real action came when, as we discussed, VIX dropped through TL and SMA200 support. The algos are still very much in charge and haven’t yet been given the green light for a meaningful backtest.
Could it come today?
continued for members…
The bigger picture shows ES backtesting the red channel midline and having come close to the white midline — with the yellow channel line intersecting the white midline up at 3311ish.
SPX’s channel demarcations continue to favor a backtest of the purple channel top or even the bottom of the white channel. But, of course, this can only happen if SPX drops back through its SMA10, now at 3233.96.
Today’s as good a day as any, though I thought that yesterday, too. The 5-min chart is a mess. 
Ditto for VIX, which is still due a tag on its falling red TL at 17ish – if it can get back above its SMA200.
Stocks continue to get support from USDJPY, which is back above its SMA100 and seemingly headed for a SMA200 backtest at 108.61.
EURUSD looks likely to continue backtesting its SMA200.
And, DXY is still loitering at or slightly above a backtest of its red TL.
CL is off nearly 1%…
…while the more problematic RB is off closer to 2%. Remember, last week’s EIA inventory report showed a huge 11.5 million draw for oil while, gas built by 3.2 million and stand at 5% above normal. Combined gas and distillates increased by 12 million barrels.
API inventories are due after the close.
The bond market is still signaling lower stock prices — though the reaction to the Iran situation remains muted.
Stay tuned…
UPDATE: 12:00 PM
No joy for bulls or bears yet as ES is sitting right at its SMA10. In bears’ favor? A falling channel has materialized.
If the channel were to hold, the backtest of the purple channel top would come on Monday – meaning several more days of chop followed by a weekend of wondering. It would also mean that the rising red channel had broken down, at least on an interim basis. It would have been safer to allow the 3189.39 tag yesterday.
SPX doesn’t have one yet and, as the chart below shows, is also holding above what would be a higher SMA10 than we had based on yesterday’s close.
UPDATE: 6:45 PM
An Iran rocket attack on a US Al Asad air base in Iraq has sent ES down to the bottom of our falling white channel. 
RB and CL are testing overhead resistance… 
…and gold has pushed to new highs.
ZN is threatening to break out again.