Futures are up sharply following Friday’s 140-point reversal which finally saw SPX/ES reach the -20% mark. As we discussed last week, the market should surprise many this week.

continued for members…

There is a deluge of important economic data waiting in the wings, with Durable Goods, FOMC Minutes, GDP, New and Pending Home Sales, PCE and Michigan Sentiment capable of moving markets.

I’ve had a few questions regarding the analog and Friday’s price action. As long as SPX keeps inching higher this week and next, we’ll consider the analog still in play. If it should close below Friday’s low of 3810.32, then the analog would likely be broken.

It could reach 4210 with only 29 points per day from this morning’s open.

Note that we got the bearish (bullish for stocks) 10/20 cross in VIX as expected.  Currencies are playing along, with EURUSD pushing up past its former lows – maybe heading for a backtest of the SMA50 at this point – and DXY still plumbing lower. USDJPY remains quiet. CL and RB are both flat this morning… …which leaves TNX still hanging on to the red TL from last December.

UPDATE: 3:44 PM

The bulls are trying to hang on to the 3.618 (SPX) and the SMA10 (both ES and SPX.) It hasn’t taken much firepower from VIX. The magic number for ES tomorrow morning is its own 3.618 at 3997.93.