Futures have given back about 20 points of Friday’s meltup, chiefly on the failure of VIX to break down and oil/gas to continue bouncing.

continued for members…The bigger picture offers more clarity in downside targets if the falling red channel holds.SPX’s version – with the biggest difference being the 3.618 Fib extension.

The DJIA has backtested its 3.618, while NKD is still headed for its SMA200.

Bears will need VIX’s rising white channel to hold.If we expand this channel, we can see that it intersects with our target at the .786 Fib at 32.27.With the pipeline back online, attention in the oil markets has turned to the raging conflict in the Gaza Strip.

In currencies, USDJPY remains on the sidelines – still in position to break out again and put the brakes on any equity weakness. SI and GC are still pushing against overhead resistance. Note that GC has finally backtested its SMA200 as well as a TL off its highs. I would revert to short here with very tight stops. The bond market continues its nap – with no telling movement one way or the other.

I have to be out of the office this morning until about noon. I’ll post more after I return.

GLTA.

UPDATE:  5:40 PM

Despite the last minute meltup, ES closed inside the falling red channel – an accomplishment these days.Everything else is in a holding pattern……with USDJPY still on the bubble……DJI having completed a nice little 3.618 backtest……and BTC nearing its SMA200 target.