Futures are up modestly this morning as we glide into the quarter end on a holiday-shortened, low-volume week.  VIX’s triangle perfectly illustrates the technical picture: attempts to break out have been beaten back, while threats to break down have routinely been rebuffed.

It’s exactly what one would expect when the goal is to maintain positive numbers for the quarter – in the midst of a horrid fundamental backdrop. It’s hard not to look ahead to July, when the calendar offers less support.

continued for members…ES and SPX are both still tracking lower, but ES has managed to hold a rising TL from yesterday’s lows. This will almost certainly break down, but the question is “when?” SPX closed about 12 points below its SMA200, which should be the primary focus for the next two days. As usual, futures are taking their cues from the algo factors. CL and RB are bouncing off channel and TL support… …while USDJPY is bouncing back after a headfake breakdown of the falling white channel midline and the yellow fan line, even topping the SMA50… …as EURUSD puts in its daily headfake in order to keep DXY under control……and VIX’s threats to break out, as mentioned above, have thus far been hollow.Perhaps the most telling chart continues to be the 10Y, which is still pressuring the 2s10s into a likely breakdown.I was unable to work over the weekend as planned, so will get to work on the bond update I started on Friday.

UPDATE:  4:30 PM

That was quite a close, with a 17-pt spurt between 3:50 and 3:54, apparently due to an order imbalance instead of the usual VIX meltdown.

Speaking of VIX, note that it has most definitely not broken down. In fact, it tested and bounced off a channel line of support which has served as overhead resistance in past reversals. I don’t want to read too much into it, but a bounce here would support the bearish equity case. We’ll no doubt have some adjustments to make to the falling channels for both ES and SPX, but so far we’re okay in terms of a breakout. Note that ES respected a trend line (purple, dotted) off recent highs.

Everything else is pretty much still on track, though the strong finish definitely pushed the limits, especially with USDJPY.