Futures have ramped 9 points higher on USDJPY’s latest test of its SMA200 (16th out of the last 21 sessions) and VIX’s latest test of trend line support (11th out the past 19 sessions.)  In other words, nothing new.

But, if the charts are right, stocks are merely setting up for a surprise dump.

continued for members…

ES’ falling white channel has been leveled off by this latest pop, bringing the channel bottom in line with the 3076 target on the 27-29th when volume is low enough that the tag can be accomplished without worrying about losing control.

A close-up:

The backtest depends on VIX not dropping below the red TL, at least yet.Note that VIX’s best, most logical upside targets on the daily chart are almost out of time. Specifically, the white dot at the intersection of the falling red TL, the rising red channel line, the purple .618 and white .382 at 26ish is technically in the rear view mirror. VIX is notorious for fast pops which arrive after OPEX, Fed meetings, etc.  So, this doesn’t mean it won’t happen, simply that time is running short.Oil and gas are backing off last week’s pop, with CL backtesting its SMA10……and RB backtesting its purple TL and SMA200 at 1.6391.

USDJPY is again pushing the algos’ buttons. It has broken down. But, by continuing to tag the flat SMA200, TPTB can stimulate buying activity any time they like. If ES doesn’t pare its gains fairly quickly after the cash open, then the 3076.93 backtest later this week doesn’t look so good.  As it is, we’re talking about a 45-pt drop – hardly earth-shattering. But, it’s a decent potential trade for those who haven’t started their holidays yet.

RUT continues to look fairly likely to go for a backtest of its SMA200 — just 2.7% below Friday’s close.And, TNX continues to look susceptible to at least the red TL in the short run. It certainly wouldn’t be difficult for SPX to register a new high.  But, I’m not expecting it at this time. Should it occur, I’d be leery of chasing it without tight stops.UPDATE:  9:43 AM

Do or die time…this is SPX’s red channel midline as well as the .886.

VIX is certainly agitating for new highs by threatening new lows.UPDATE: 12:10 PM

The market appears to be taking a siesta, with SPX at new highs and ES still thinking about it.  I’m going to zip out for an hour or two, will check in later this afternoon.

BTW, my plan for the holidays is to post Wednesday morning and then take off until the morning of Monday Dec 2.

More later.

UPDATE: 3:43 PM

ES just joined SPX in making new highs with both adding .6%..and, all it took was a mere 4.94% plunge in VIX.  Should be able to take its foot off the gas now. ES’ purple channel top tag last Tuesday was a good reversal signal.  Now, of course, the purple channel top is 6-7 points higher and gaining about 6 points per week.