Another night of propping up the dollar and bashing VIX has yielded a .50-pt increase in the S&P futures.Apparently, it’s going to take a shooting war or worse to shake the “market.”

continued for members...

SPX and ES are marching higher, and show no signs of weakness — as long as you don’t count negative divergence and narrowing leadership.  The only reason I’ve left that dot down there at 2533  (2536 for SPX) is because it’s the last logical opportunity for the red midline to be backtested.  I don’t expect it, and certainly wouldn’t advise shorting in anticipation of it unless we get a breakdown (below the SMA10, for starters, and the rising purple channel as verification.) It should be easy enough to avoid:  drop VIX through the latest arbitrary TL of support.UPDATE:  11:50 AM

So far, ES is hanging out at a 1.50 loss (SPX -0.60.)  Part of the problem is that RB and CL are both registering losses (-1% and -0.35% respectively.)  The other problem is VIX, which has gained 3.3% on the day after bouncing off the 1993 lows and back above the red TL shown above.  With such clear cut support, it’s worth holding long here.

If we do get a selloff in SPX/ES as shown later this week, it’ll most likely result in a nice pop for VIX, perhaps up to the yellow channel bottom at 11.5 or the purple channel bottom around 12.5.  If it exceeds both of those, the next resistance isn’t until 14.72ish.

I’d give it at least a 50:50 chance of playing out, and would hold long in VIX and a short position in SPX on any drop through the SMA5 200 at SPX 2587.55.  This would put ES around the purple channel bottom at around 2583.

UPDATE:  12:00 PM

Moment of truth.  SMA5 200 for SPX……channel bottom for ES. I have to run out for a lunch meeting and then carpool duty.  GLTA.